trend following delusion shattered

gnome · Dec 11, 2007

To make the big money, you have to be able to play BOTH the "trend" and the "range".

1. You have to figure out when to shift gears... easier said than done.

2. Most successful traders seem to be relatively successful at one and not very good at the other.... I believe this is because they have their mindset "geared" for one so that the other hurts them.

marketsurfer · Dec 11, 2007

Quote from gnome:

To make the big money, you have to be able to play BOTH the "trend" and the "range".

1. You have to figure out when to shift gears... easier said than done.

2. Most successful traders seem to be relatively successful at one and not very good at the other.

this sounds good..... however, don't you think 99% of traders would be wiped out trying to do it?

and then there is the VIG......you pay win or lose. making losses so much bigger and wins so much smaller.

surf

Thunderdog · Dec 11, 2007

Quote from marketsurfer:

this is where the confusions lays---- the trendfollowers say they exit promptly, but reality is they hold thru massive drawdowns sticking with their analysis.

surf

And you know for a fact that this is how they all uniformly conduct themselves? That must have been quite an empirical study on your part.

gnome · Dec 11, 2007

Quote from marketsurfer:

this sounds good..... however, don't you think 99% of traders would be wiped out trying to do it?

and then there is the VIG......you pay win or lose. making losses so much bigger and wins so much smaller.

surf

I wouldn't think "99% wiped out" necessarily, but it's difficult no doubt.

Years ago I was much better at playing the range, but now I appear to be equally lousy at both.

Thunderdog · Dec 11, 2007

Quote from marketsurfer:

...and then there is the VIG......you pay win or lose. making losses so much bigger and wins so much smaller.

The vigorish of commission plus spread is absolutely inconsequential to your present YM trade which is approximately 600 points against you. Had you exercised a little more discretion, your vig might have been a bit higher, but your drawdown would be substantially lower. It needs not be one extreme or the other, either all vig or nearly none at all. However, you continue to blather in absolutes. Why is that? Why do you incessantly blather in absolutes, from one post to the next and from one thread to the next? Please tell me.

marketsurfer · Dec 11, 2007

Quote from Thunderdog:

And you know for a fact that this is how they all uniformly conduct themselves? That must have been quite an empirical study on your part.

based on publically available information, this can be deduced.

ofcourse, there are some who try to "time the market" but they generally get chopped to bits moving that much size. the predatory funds simply lay in wait chopping these guys to shreds on their every move. they can't hide and get crushed.

trend following is buy hold by the big boys, can't be any other way today, in my opinion.

surf

makloda · Dec 11, 2007

Quote from MGJ:
The Big Kahuna of trendfollowing CTA's at the moment is David Harding of Winton Capital Management. In second place is the Dutch team running TransTrend BV.

Let's not forget MAN's heavyweight AHL, up 24.8% YTD net of fees through Dec 3, 2007.

marketsurfer · Dec 11, 2007

Quote from Thunderdog:

The vigorish of commission plus spread is absolutely inconsequential to your present YM trade which is approximately 600 points against you. Had you exercised a little more discretion, your vig might have been a bit higher, but your drawdown would be substantially lower. It needs not be one extreme or the other. However, you continue to blather in absolutes. Why is that? Why do you incessantly blather in absolutes? Please tell me.

yes, except the blather part.

HOWEVER,

at what point does the vig become inconsequential? perhaps, i may have entered 50 times trying to catch the top in this move.... is this what you suggest? then my drawdown would have been larger. it's all so easy in hindsight....

surf

marketsurfer · Dec 11, 2007

Quote from gnome:

I wouldn't think "99% wiped out" necessarily, but it's difficult no doubt.

Years ago I was much better at playing the range, but now I appear to be equally lousy at both.

yeah. what changed, you or the markets?

thanks,

surf

Thunderdog · Dec 11, 2007

Quote from marketsurfer:

...at what point does the vig become inconsequential? perhaps, i may have entered 50 times trying to catch the top in this move.... is this what you suggest? then my drawdown would have been larger. it's all so easy in hindsight...

So is that it? Either once or 50 times? Did you catch my earlier reference about your speaking in absolutes? (While 50 times is not an absolute, it comes close enough to validate my claim about your black and white comparisons.)