trend following delusion shattered

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Quote from hank rollins:

i see the paper was written in 2001.

wonder if he has a "different" view now ?


:D
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There are some different but logical issues:
- Do trends exist?
- Can a trend be quantified?
- Can we make profits from trading trends (both trend-following and anti-trend included)?
- Have trends changed recently? But there were trends before.
- Is trend trading a type of directional trading?
- Is there a third category of trading approach, other than directional and market-neutral?
- Should we include swing or cycle or range trading into the directional category? If not, they are the third category?
- Does swing, cycle and range have an uptrend and downtrend of smaller scale?
- Why so many hedge funds claimed to be trend following?
- What are the differences when the price moving from one point at open to another point at closing along a streight line (almost), one trader call it a trend but another call it from support to resistence ?
- If a trend can not be predictable for making profits, what method can predict ?
- If a future price cannot be predicted by using any trend concepts, does it mean trends do not exist?
- etc.
- etc.
- etc.

:confused:
 
Quote from hank rollins:

yes. i concur with your line of questioning. it is proper and sound.

enjoy the rest of the weekend.

short oil / short ebay / short djia
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Hank,

Just out of curiosity, can you name one trader who has made at least 500 million or more just scalping? Outside of floor traders and institutional traders who take the other side of paper.

It seems to me, all the great fortunes that have ever been made trading, has been riding a long term trend of some sort. And by the way, this does not just apply to trading, but to Hollywood in regards to film making, music, trends in fashion, real estate, even drugs.
 
Quote from ProfLogic:

If you tell me the timeframe you are comfortable with trading; i.e. intraday or position. I will tell you where price will go. Please bear with me because I can't respond until Sunday evening. I'm going out of town shopping for my son's birthday for a couple day. Damn I wish I was 5 again.
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ProfLogic,

Sorry for being anxious, here. Just hope you haven't forgotten about me (from page 26). As I stated earlier, you can PM me if that is more appropriate.

continued success
 
Quote from hanseng1:

Ok here's a little proof that current trends can be projected into the future.

...
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The issue of whether or not "current trends can be projected into the future" is beside the point. The answer is obvious. That's not what is under contention.

Here is the genuine article again, since no one has answered the challenge:

Any false method, including "trend" following, will yield success to some degree, otherwise it would be negatively correlated to the market, which is an edge. Trends exist only in the past, so traders on trend have made money in the past, but only as luck has provided for them.

The theory of market efficiency implies, "If there's a method in the public domain, it doesn't work."

One can prove both of these wrong by specifying a reliable method, composed exclusively of publicly available techniques, that can be applied to past price to determine a usefully large number d such that |p1-p0| is greater than or equal to d, where p1 is a near-future price and p0 is the current market price.

What is that method?
 
Hard to imagine people so naive. I take some comfort in believing that God takes special care of you. :D

Good luck in the markets tomorrow,
Lefty
 
Quote from NickelScalper:

The issue of whether or not "current trends can be projected into the future" is beside the point. The answer is obvious. That's not what is under contention.

Here is the genuine article again, since no one has answered the challenge:

Any false method, including "trend" following, will yield success to some degree, otherwise it would be negatively correlated to the market, which is an edge. Trends exist only in the past, so traders on trend have made money in the past, but only as luck has provided for them.

The theory of market efficiency implies, "If there's a method in the public domain, it doesn't work."

One can prove both of these wrong by specifying a method, composed exclusively of publicly available tools, that can be applied to past price to determine a usefully large number d such that |p1-p0| is greater than or equal to d, where p1 is a near-future price and p0 is the current market price.

What is that method?
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I just gave you a small display of a trend following tool that every one has that shows |p1-p0| > 0. That satisfies both of your criteria, except you never told me what "d" needs to be. So now what is the question? Does "d" need to be a large threshold number?

Again, I have given a very basic, quick display that satisfies both criteria and you're still not happy. I don't think anyone could provide a study that would convince you no matter how detailed it was.

Another problem is we are only talking about entries here, and we all know there is much more to trading than that. There are plenty of trend following systems that perform well for long periods of time once position management techniques are taken into account. Is that what you're looking for? An entry alone only needs to provide a > 50% chance (i.e. better than random) of producing profitable movement to be an effective entry; the most important part is exit.

Again, here is an entry using a common tool that proves you wrong according to your repeated postings. Its no holy grail, and that's what I think you're seeking. You're not going to find that regardless of the trading technique.
 
Quote from Lefty62151:

Hard to imagine people so naive. I take some comfort in believing that God takes special care of you. :D

Good luck in the markets tomorrow,
Lefty
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Thanks for the kind sentiment (which I suppose was directed toward me).

Here's wishing you luck in finding enough courage to respond to my challenge.
 
Quote from NickelScalper:

Any false method, including "trend" following, will yield success to some degree . . .The theory of market efficiency implies, "If there's a method in the public domain, it doesn't work." . . .
One can prove both of these wrong by specifying a reliable method . . . What is that method?
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And how will you test the validity of any method in question?

If it works Monday, will you be convinced, given your admission that any false method will yield "success to some degree"? What if it works Tuesday, Wednesday and Thursday? Do you still need Friday? When does "success to some degree" yield to "reliable" by your standards? How many failed instances of this method will you need to make the theory in question "false" and unreliable? Do you see the impossibility of ever passing this test?

More importantly, do you understand that one can still make a shitload of money trading a supposedly "public" and outmoded manner of trading? :D
 
Quote from hanseng1:

I just gave you a small display of a trend following tool that every one has that shows |p1-p0| > 0. That satisfies both of your criteria, except you never told me what "d" needs to be. So now what is the question? Does "d" need to be a large threshold number?

Again, I have given a very basic, quick display that satisfies both criteria and you're still not happy. I don't think anyone could provide a study that would convince you no matter how detailed it was.

Another problem is we are only talking about entries here, and we all know there is much more to trading than that. There are plenty of trend following systems that perform well for long periods of time once position management techniques are taken into account. Is that what you're looking for? An entry alone only needs to provide a > 50% chance (i.e. better than random) of producing profitable movement to be an effective entry; the most important part is exit.

Again, here is an entry using a common tool that proves you wrong according to your repeated postings. Its no holy grail, and that's what I think you're seeking. You're not going to find that regardless of the trading technique.
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For a few reasons I won't go into here, this computer is restricted as to what it can download.

Consequently, I'm asking you to refrain from using a "display" in making your points and to limit yourself to words on the page when describing your method.

As for the value of d, it needs to be large enough to be useful in trading. Make up your own reasonable number.

If you need further clarification, I'm ready to answer specific questions.
 
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