Rich and Taleb agree.....

[oddiduro]

Quote from infolode:

I've never quite understood the "no trend" crowd but then again, I'm just one of the little people that follows trends or what I believe to be the meaning of the word trend.
What is your definition of a trend (in twenty words or less) and what trading style do you employ that eschews the belief in trends(a link would be fine)?

infolode

btw:Happy turkey day!

Infolode: A "trend" is what traders call directional price movement AFTER it has already appeared on the chart.

Surf: Yes, the turtles apparently knew the truth, and traded accordingly. It is interesting that one of the most legendary trend traders would say that trading is largely hit and miss.

Very, very instructive indeed.

Best Regards
Oddi

 

[oddiduro]

Quote from ProfitTakgFool:

Absolutely the markets are random. There is a technical element to the market but the majority of the movement is explained by randomness. Struggling traders just can't accept this fact and they don't even realize that this is what is preventing them from enjoying some sort of success.

A while back I posted a thread about a strategy to deal with randomness and I was stepped on, laughed at, ridiculed, and thrown out the door. Since then, my account has gone up about 3-fold.

How will the market reverse after a wicked sell-off? V-bottom, double bottom (higher low), double bottom (lower low), W-bottom, wedge bottom, falling channel bottom, slop bottom? Anyone got the answer? I don't but I have a strategy that will allow me to profit from all of these bottoms. A wanna be trader will look back at the chart and see a double bottom with a lower low and a positive divergence and say, "Ah Ha! The market is technical. Look, see that?" Bull! The next time the market sells off it will reverse in the shape of a V and the trader will miss the trade or it will reverse in a triple bottom and he'll get stopped out on the 3rd low and lose money.

You don't know and I don't know how the market will reverse. You can only profit from it if you open your mind to ALL possibilities. Very few traders can do this so most will fail.

Agreed, both Curtis Faith, an original turtle, and the other turtles interviewed by Covel agreed that most people will be unable to withstand the psychology of randomness.

Most people cannot handle being wrong most of the time. They will revenge trade, change their rules, freeze, blame the market, blame the platform, blame the fed, blame the NWO, and quit.

This the reason that most traders will fail. They have to be right, and in the world of trading, the need to be right and need to make money don't go well together.

Best Regards
Oddi

 

[infolode]

Quote from ProfitTakgFool:

Absolutely the markets are random. There is a technical element to the market but the majority of the movement is explained by randomness. Struggling traders just can't accept this fact and they don't even realize that this is what is preventing them from enjoying some sort of success.

A while back I posted a thread about a strategy to deal with randomness and I was stepped on, laughed at, ridiculed, and thrown out the door. Since then, my account has gone up about 3-fold.

How will the market reverse after a wicked sell-off? V-bottom, double bottom (higher low), double bottom (lower low), W-bottom, wedge bottom, falling channel bottom, slop bottom? Anyone got the answer? I don't but I have a strategy that will allow me to profit from all of these bottoms. A wanna be trader will look back at the chart and see a double bottom with a lower low and a positive divergence and say, "Ah Ha! The market is technical. Look, see that?" Bull! The next time the market sells off it will reverse in the shape of a V and the trader will miss the trade or it will reverse in a triple bottom and he'll get stopped out on the 3rd low and lose money.

You don't know and I don't know how the market will reverse. You can only profit from it if you open your mind to ALL possibilities. Very few traders can do this so most will fail.

Success is the best revenge. If you were given the bums rush they were afraid because your ideas instilled doubt in their already fearful minds.

Perhaps my definition of a trend is different that the popular notion...I don't know, I'm 90% discretionary.

As you say no one knows what the market will do and I'm no exception.

If a trader gets stopped out on the third low he deserves to lose money.

Stick with your beliefs if they make you money, that's part of the reason we do this day after day.

 

[oddiduro]

Quote from psytrade:

I think you mean Rich Dennis, not Dennis Rich... must be thinking of that cartoon with Dennis the Menace or Richy Rich

Yeah, typing on the fly

Please forgive me.

Now back to the statement. Richard Dennis, the Turtle Jedi, says that trading is largely an accidental thing.

Do you agree?

Best Regards,
Oddi

 

[infolode]

Quote from oddiduro:

Agreed, both Curtis Faith, an original turtle, and the other turtles interviewed by Covel agreed that most people will be unable to withstand the psychology of randomness.

Most people cannot handle being wrong most of the time. They will revenge trade, change their rules, freeze, blame the market, blame the platform, blame the fed, blame the NWO, and quit.

This the reason that most traders will fail. They have to be right, and in the world of trading, the need to be right and need to make money don't go well together.

Best Regards
Oddi

Ok, I agree with everything you have stated yet I still trade mostly with the trend until I'm given conformation of a change. Then....I trade with that trend.
Maybe this is a matter of semantics. I shouldn't get hung-up on the T word.

 

[Thunderdog]

Quote from oddiduro:

...In short, this is a pretty good admission that trends only become trends after the fact.

Who in their right mind would suggest otherwise? I have yet to see a trend before the fact.

Notwithstanding the significant random component, I suppose the Element XTM part is latching onto it in its "lower risk" areas, wherever they may be, and hoping for the best while preparing for the worst.

 

[ProfitTakgFool]

I wouldn't say it's largely accidental because it requires skill and one trader will always have an edge over another trader if you isolated just 2 people but you have to have a strategy that includes the element of randomness. Any credible Financial Markets degreed program studies Stochastic Calculus rigorously. Why? The sharpest minds in the business realize the markets absolutely are random!

If you want to succeed in this business you have to have a firm grasp of the following concepts: statistics, probability, and randomness. And, you have to be willing to study the markets to the extent that a doctor studies medicine. A 2-week seminar just won't cut it. You need to study for years and years, and then be willing to learn more every single day. This isn't a job for the lazy, casual, or inept. It needs to be a passion that only leaves you when you drift off at night, if it even leaves you then.

Quote from oddiduro:

Yeah, typing on the fly

Please forgive me.

Now back to the statement. Richard Dennis, the Turtle Jedi, says that trading is largely an accidental thing.

Do you agree?

Best Regards,
Oddi

 

[rwk]

Quote from oddiduro:
... It is interesting that one of the most legendary trend traders would say that trading is largely hit and miss.

I don't think randomness is what Dennis meant by trial and error. He had done enough testing to know that he had an edge and that he would make money through the systematic application of that edge. He meant that making money on any particular trade was not magic. The outcome is determined by probabilities.

I don't think Taleb believes markets are random either. He says that markets are unpredictable, and that using a Gaussian distribution as a model for price behavior is a seriously flawed strategy.

I don't think either Dennis nor Taleb would expect a strategy of following price and hoping to have much success.

[rwk]

 

[infolode]

Quote from rwk:

I don't think randomness is what Dennis meant by trial and error. He had done enough testing to know that he had an edge and that he would make money through the systematic application of that edge. He meant that making money on any particular trade was not magic. The outcome is determined by probabilities.

I don't think Taleb believes markets are random either. He says that markets are unpredictable, and that using a Gaussian distribution as a model for price behavior is a seriously flawed strategy.

I don't think either Dennis nor Taleb would expect a strategy of following price and hoping to have much success.

[rwk]

"...using a Gaussian distribution as a model for price behavior is a seriously flawed strategy."

agreed

 

[ProfitTakgFool]

Great insights here. The markets are not normal but there are periods of normalcy throughout the day. If you can isolate the data when it is in the tails the probability that you'll win sky rockets. You have to be very quick to realize when your analysis is flawed, however.

"I don't think either Dennis nor Taleb would expect a strategy of following price and hoping to have much success."--------->>> A price following strategy is flawed. Buy what others are selling and sell what others are buying, but only do this when prices have traveled to extreme values (statistics). This happens every single day.

Quote from rwk:

I don't think randomness is what Dennis meant by trial and error. He had done enough testing to know that he had an edge and that he would make money through the systematic application of that edge. He meant that making money on any particular trade was not magic. The outcome is determined by probabilities.

I don't think Taleb believes markets are random either. He says that markets are unpredictable, and that using a Gaussian distribution as a model for price behavior is a seriously flawed strategy.

I don't think either Dennis nor Taleb would expect a strategy of following price and hoping to have much success.

[rwk]