trend following delusion shattered

[kiwi_trader]

Quote from ProfLogic:

I am a Trend Reader not a Trend Follower! I do not believe in buying new highs, buying new lows, selling new highs or selling new lows. I believe a Trend Reader can simply read when a Trend is migrating from one direction, to it's counter direction and finally into a completely new trend.

Your question was answered in the link I posted. You do not understand the process involved with the answer. Not my problem.

Personally the camp I do not want to be in is the one that continuously tries to short new highs in the Dow when it is clear to us "Trend Readers" that price is still going up. The shear futility in that is blatantly and financially painful & obvious.

Yes PL,

This is like the stupid arguments we get into here about predicting vs reacting and whether systems/strategies are predictive or not. If one defines trendfollowing in as stupid a manner as Surfer does then you will get the results of stupidity.

If one applies intelligence and discipline to trading with the trend ones experience will be very pleasant.

If one can read the trend and the flow and then go with the flow for a logical reward then one will be happy and well rewarded.

 

[bighog]

A trend and a reversal of said trend are two distinct different TA concepts. A trend is simply the time frame that one is looking at prices to make an attempt to see if a long or a short would be a wise decision in said time frame.

Reversals, retraces, consolidations, continuation patterns are NOT part of a trend. Patterns, such as flags, triangles etc are again NOT a part of the trend, patterns etc are CLUES to alert a trader of a coming possible change in the trend.

A trend is nothing more than a tell tale sign which way prices are headed. A child can see that, the real deal is not FOLLOWING a trend.......it's being in sync with what the trends other clues are saying.

If a trader sees an up trend that is not a problem, the problem is deciding what the trend will do next. Will it reverse? Will it make another leg up? (continuation ). Will the trend go sideways and consolidate from indecision? Will the trend retrace some from profit taking?

So in finishing, the trend is the easy part, the harder part is what will you do with the CLUES every trader receives as trends do what trends will do.

The hard part for many TA people is not understanding how LITTLE price has options in doing what it will do. Price is confined to keep going up or down, price has option to change direction, price has option to go nowhere.

The rest is up to the trader, keep it simple and do not reinvent the wheel. good luck next year to all. ...

 

[marketsurfer]

Quote from psytrade:

Marketsurfer,

Intuitively you may think buying bottoms works because you tried it in 2002, but its a losing method.

no, extensive testing show this to be the case. look at 5 day and 10 day highs in the SP 500 as an example. see if buying these highs ( trend following ) is superior to buying new 5 day/10 lows. larry connors in his book "how markets really work" provides numerous examples.

regards,

surfer

 

[bighog]

Trend following is the gist of trading. Without trend following what would we as traders hang our hats on?

I am always amazed how some deal in semantics so much that it is no wonder most lose. but HEY, i am not complaining, i like the money. THKS.....

 

[ProfLogic]

Quote from bighog:

A trend and a reversal of said trend are two distinct different TA concepts. A trend is simply the time frame that one is looking at prices to make an attempt to see if a long or a short would be a wise decision in said time frame.

Reversals, retraces, consolidations, continuation patterns are NOT part of a trend. Patterns, such as flags, triangles etc are again NOT a part of the trend, patterns etc are CLUES to alert a trader of a coming possible change in the trend.

A trend is nothing more than a tell tale sign which way prices are headed. A child can see that, the real deal is not FOLLOWING a trend.......it's being in sync with what the trends other clues are saying.

If a trader sees an up trend that is not a problem, the problem is deciding what the trend will do next. Will it reverse? Will it make another leg up? (continuation ). Will the trend go sideways and consolidate from indecision? Will the trend retrace some from profit taking?

So in finishing, the trend is the easy part, the harder part is what will you do with the CLUES every trader receives as trends do what trends will do.

The hard part for many TA people is not understanding how LITTLE price has options in doing what it will do. Price is confined to keep going up or down, price has option to change direction, price has option to go nowhere.

The rest is up to the trader, keep it simple and do not reinvent the wheel. good luck next year to all. ...

Big, I agree with what you say with one addition; Reversals, retraces, consolidations & continuations are part of my trend environment because they are part of the make up of the entirety of MY Trend. It is specific to MY environment though. Patterns, such as flags, triangles etc are NOT a part of the trend in my environment either because patterns are inconsistent. I lay out objective rules to define reversals, retraces, consolidations & continuations. I'm not looking at reinventing the wheel either but I did find a way to make it roll better.

 

[ProfLogic]

Quote from marketsurfer:

no, extensive testing show this to be the case. look at 5 day and 10 day highs in the SP 500 as an example. see if buying these highs ( trend following ) is superior to buying new 5 day/10 lows. larry connors in his book "how markets really work" provides numerous examples.

regards,

surfer

Buying highs is not necessarily trend following just like your repeated selling of new highs can be pigeon holed into some named methodology.

Why is it you repeatedly quote from the work of others? Are you totally unable to form any original thoughts of your own? Are you physically unable to do any research on your own for some reason? Why must you constantly hang your hat on the dysfunctional arbitrary ideas of others?

 

[ProfLogic]

One final note before I bid you all a good evening.

Marketsurfer advocated a very eye opening book a few years back called "Envy, a theory of social behavior". Read it, then come back and read surfer's posts on trend following. It is almost laughable.

Happy Thanksgiving. May all of your family's find peace, health and happiness in the Holiday Season . . . even you surf.

 

[traderob]

What is strange about this thread is that some members have redefined 'trend following' to mean any trade that goes in any direction, even of it lasts only a few hours.
Trend following in the literature (outside of ET ) is a method hoping to find large and persistant directional trades that usually last weeks and months .

The best trend following traders will keep adding to a positive trade.
For example, say they entered with 10 contracts this eur/yen trade. As the trade went positive they would have added more, and then more the following month. A genuine trend following trader would have made over a million on this trade alone.

I wonder how many of the ET true believers in trend following took this or any of the many, many other long trends of 2006?

 

[smilingsynic]

Quote from roberk:



The best trend following traders will keep adding to a positive trade.
For example, say they entered with 10 contracts this eur/yen trade. As the trade went positive they would have added more, and then more the following month. A genuine trend following trader would have made over a million on this trade alone.

I wonder how many of the ET true believers in trend following took this or any of the many, many other long trends of 2006?

What you're describing here is pyramiding--simply increasing one's exposure. Trend faders call it averaging down.

It is not a necessary element in trend trading. But it can lead to big, big winners, for the few who are lucky enough to cash in.

Pyramiding can make what at the time seems like a winning trade a loser, for both trend traders and trend faders. It can also turn a losing trade into a winner, again, for both.

 

[psytrade]

Market its another losing system.

Buying a ten day low resulted in the attached losing system for buying 10 day lows

L < Ref(LLV(L,10),-1);

Buying 10 day highs was a loser too.