trend following delusion shattered

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Quote from whitster:

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Quote from whitster:

"what you say is "true"--- however--you can't predict peoples emotions into the future based on past price movement"

yes, i can.

and do.

it;s how i make a living

so don';t tell me it can't be done
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"ok. i can't argue with seers and such.

best,

surfer"

surfer. i trade futures for a living. it has to do with following order flow (IE PRICE) and making trades

so, don't tell me it can't be done.

i do it

if it was random, like a coin, i couldn't
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i am certainly not saying that you don't have an edge. obviously, if you can make a living at this game, you edge is working.

did not van tharp show that one can make money by using random entries and good risk management?

, i am saying, that trend following as talked about in the books about such things is not an edge--regardless of how the past makes it look.

best,
surfer
 
Im not sure about longer term trading but on an intaday basis I often make substantial wagers that the trend will continue in situations like this:

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1013113">

Therefore I have not the slightest doubt that the odds are better than 50/50 the trend will continue after certain chart formations.(The link below is the same chart posted above)
 

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fwiw, i do make a living trading futures.

i do NOT use trend following techniques (on an intraday basis) GENERALLY speaking.

however, this is not to say that trend following does not work - in certain markets.

even neiderhoffer (and others) have conceded that trend following works in some markets.

on an intraday futures scalping method, i am much more likely ot be fading moves (countertrend) vs. FOLLOWING a trend, but given proper market internals, signals, etc. sometimes i am "trend following" given the proper signals, market internals, etc.

as an example of a trend following market, look @ the nikkei right now.

the thing is making such hyooge intraday moves day after day that it is clearly tradeable on a trend following method. a simple SMA cross is enuf. Add some confluency with support/resistance levels, order flow monitoring, and some key price levels and it gets even better

a counterexample would be the indexes yesterday (triple witching). those things were choppier than lizzie borden. but that's to be expected.

markets are ALWAYS trending, but in MP parlance - they are usually trending horizontally. :) not vertically.
 
Would highlight some of those flaws? It seemed ok to me ...
Quote from marketsurfer:

i am familiar with that sales pitch disquised as a scientific paper.

unfortunately, upon careful reading, one can easily see the motivation of the authors to skew the results to support their tactics.

sorry, the paper contains several flaws and is lacking in true unbiased research.

best,

surfer
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Quote from marketsurfer:

i am familiar with that sales pitch disquised as a scientific paper.

unfortunately, upon careful reading, one can easily see the motivation of the authors to skew the results to support their tactics.

sorry, the paper contains several flaws and is lacking in true unbiased research.

best,

surfer
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Have to agree, not much science there.

Google is a great tool (tip - use "filetype;pdf" after criteria, and colon instead of semicolon...makes smiley here in the post so had to replace)

Dynamical Modeling with Kernels for Nonlinear Time Series Prediction
http://eprints.pascal-network.org/archive/00000484/01/NIPS2003_AA17.pdf

Intraday Patterns and Local Predictability of High Frequency Financial Time Series
http://molgedey.de/publications/MolgedeyEbeling_IntradayPaterns.pdf

ps. these aren't anything to live-by, but good data and legitimate research none the less.
 
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