Trend Following for Idiots (Order Restored)

Quote from steve46:

Since I cannot count on people to ask intelligent questions, I will do it myself..

Well Steve, if "trend" really exists, how do you define it and how do you profit from it?

Okay then, first, trend is any sustained directional movement. The magnitude of a trend is defined by the trader. For instance. For a scalper a trend could be as small a directional movement as two (2) ticks. For an intraday trader, a trend might be from two (2) ticks to whatever the average intraday range is for the tradeable instrument. For a longer term trader (or investor), who might use a monthly chart, trend might be defined as longer than the intraday range and up to several years or even decades. These are operational definitions that that I will use for the purpose of this thread.

Okay then, but how does one profit from trend...?

I'm glad you asked, however our time is up for the evening and so we will have to resume our discussion tomorrow..

Good night

Steve
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This idiot agrees that two ticks in the same direction constitutes a trend. :cool:
 
Quote from kinggyppo:

This idiot agrees that two ticks in the same direction constitutes a trend. :cool:
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Yes, if you are a scalper.

Be advised however that a retail trader scalping a tick or two isn't going to make it in this business. You would have to have a different pricing structure to make a go of it that way..in my opinion.
 
Quote from steve46:

Yes, if you are a scalper.

Be advised however that a retail trader scalping a tick or two isn't going to make it in this business. You would have to have a different pricing structure to make a go of it that way..in my opinion.
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I am just talking trend, how many pages was the "trend following delusion shattered" with no agreement on anything. Ok then, how do you suggest capturing a longer trend?
 
Quote from kinggyppo:

I am just talking trend, how many pages was the "trend following delusion shattered" with no agreement on anything. Ok then, how do you suggest capturing a longer trend?
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Yes, the right question.

If you are trading futures (indexes) you have to know that they are noisy. So...you need a couple of things in order to make it work..First you have to have a way to cut the noise a bit..One suggestion (proflogic's) is to use constant volume charts...If that doesn't suit you, the other is to look at the market from a longer term perspective. In addition, I think one has to have several well researched setups that offer a statistically valid edge. If you do that, you have a chance..

I like to look at the daily and 60 min chart for general direction. I take a top down approach looking first at the daily, then at the 60 min candles. Here is a chart showing today's action. Look at the test of the longer term MA. It will either test and take it out or test and fail. A close above, and I look to get long using the 5 min chart. A close below, same.
 

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Another pointless thread that ignores money management and psychology.. the only two things that will ever make you money

When will the unprofitable learn that the methodology has very little to do with it

Yet it gets 95% of their attention and resources.. any wonder 95% lose
 
Quote from steve46:

I like to help and ET is inhabited by people who could benefit from a simple approach to this subject..

Since some here are so obviously handicapped when it comes to complex subject matter I have decided to take a more direct approach..

First an example of trend so simple, so direct that an idiot could comprehend it..

On this monthly chart using candles, you can see how a market trends on a long term basis..

Notice a couple of things about this chart as follows

First, The time frame...The chart shows price action from late 2000-early 2001 to the present.

Second, you can see a short term MA, and a longer term MA are in place.

Third, you can see how price acts during a trending move as it tests specific price points, pulls back and resumes its trending process. This is part of what professionals call "drift"

Now, even though some of you are "idiots", I believe you are still capable of learning (if you choose) and profiting from what you learn (if you choose).

Good luck,
Steve
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Trends only "manifest" themselves in hindsight. In point of fact, there is no such thing as trend at all. They are mental mirages. Illusions of the mind created by sheer desire to seek order
from chaos.

There is nothing in physics, the natural world, or human psychology/behavior that would even suggest trends
exist!

And since the market is a reflection of the participants that create it, we can all be assured the idea of trend is nothing more than a marketing invention by the shysters and shucksters to sell false hope to a gullible mass.

Thats the chink in your chain!
 
One of the interesting things about human beings is the ability to synthesize and anticipate from prior experience.....

The fact that some of use can do so, differentiates us from lower animals....and that is why we can make use of trend...

Thanks for the comment. I like stream of conciousness as much as anyone but I do suggest you think for a moment before posting..:D That way you avoid getting slapped around verbally...

Was that polite enough for everyone...:D

Steve
 
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