trend following delusion shattered

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>>>just because this is a trading website, not an investment website, don't be fooled into thinking the methodologies employed by active traders is used by the public - IN GENERAL<<<

Those in 401K's usually live by the buy and hold strategy which is flawed in more ways. The last correction this past week bears this out. While, me and a few close friends at the office bailed out of the mutual funds in our 401K----other people in the office including bosses (sorry, can't help smiling) are stuck and just saw their 401K's shrink. Unfortunately, the worst is yet to come in my opinion.
Yes, sometimes it is so sweet when, those who make other people miserable get their just desserts. We will be picking the scraps off these pompous individuals when the time comes and hopefully, with a fatter retirement account to boot.
The trend is still your friend contrary to what a few nay sayers would want you to believe.
 
Quote from whitster:

marketsurfer, the public "in general" (to use your parlance) are not trend followers. the public IN GENERAL, are mostly invested in stocks/mutual funds via defined contribution plans, retirement plans, etc. and GENERALLY invest on a dollar cost averaging methodology, iow money is taken from their paycheck each month, regardless of the state of the market.

that is definitely NOT trend following.

just because this is a trading website, not an investment website, don't be fooled into thinking the methodologies employed by active traders is used by the public - IN GENERAL

hth
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thanks. i was speaking of the segment of the public that jumps on hot markets, buying new highs by default, as they have the weakest informational edge. sorry for not being more specific.

would you consider the majority of mutual funds-- equity funds to be trend followers?

regards,

surfer
 
After 1600 posts or so on the thread, of which I've read maybe the last 20 or so, I'm no expert on what has been said so far, but doesn't it all come down to the fact, that for any equity or index trader to make some money, the market has to move in some direction or the other? And if it moves in some direction for even a second or two, isn't that a trend? Even if classifed as a very short one? A scalper looks for these really, really short trends, while a day trader will look for something running minutes or more, and a swing trader, something that runs a day or more.

And like person #1 who measures the shoreline with a kilometer long tape measure, vs person #2 who measures it with a one meter ruler, the second person will see a bunch of trends inside person #1's perspective of a trend, and possibly that many more profit opportunities. And since you can refine that measuring stick down until you are measuring grains of sand, trading can refine the idea of trends down until one sees the opposite sides of a quote.

Anyway, my philosophical holiday interjection.

Happy Holidays.
 
Quote from marketsurfer:

thanks. i was speaking of the segment of the public that jumps on hot markets, buying new highs by default, as they have the weakest informational edge.
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I don't think anyone here would dispute the fact that blindly buying new highs is not enough of an "edge" on its own.

But the same goes for indiscriminately buying new lows, fading the prior range, using chart pattern X or indicator Y, etc. Why pick on trendfollowers as opposed to anything else?
 
The fact is, nothing is perfect whether you are using indicators, oscillators, support and resistance, etc. However, I have looked at a huge number of stock charts and come up with just one conclusion.
The biggest moves in a stock, mutual fund, etf, options come when there is a definite trend.
Trading ranges will give you much smaller moves so, the big money to be made is when there is a trend.
Now if you are not following the trend, what are you using to base your trading decisions on?
 
Quote from Bitstream:

sorry surfeur, we definetly agree trends are fewer and fewer but that's only intraday. there are great trends in the making anywhere u look. ...
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wrong question you are implicitly asking and answering. it is not
about how many trends there are but how much it costs to exploit
them. thus: how many false breakouts, if you will, do you suffer
for one major trend.
BTW i am afraid this is THE ONLY relevant question for a trend
follower.
 
Quote from smallfil:

... The biggest moves in a stock, mutual fund, etf, options come when there is a definite trend. ...
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now that is a profound statement, isn't it.
 
Quote from man:

wrong question you are implicitly asking and answering. it is not
about how many trends there are but how much it costs to exploit
them. thus: how many false breakouts, if you will, do you suffer
for one major trend.
BTW i am afraid this is THE ONLY relevant question for a trend
follower.
More...

If trading breakouts is part of your trend strategy, I agree but that is a fringe strategy that is no longer being viewed by the majority of Trend Traders. That strategy is quickly being replaced by more defined and consistent strategies. Trading breakouts in either direction is akin to Russian Roulette.
 
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