Trend Following: How Great Traders Make Millions in Up or Down Markets

[marketsurfer]

Quote from alesanti:

Why do you think that the trend following is a flawed theory? I think that to qualify a theory as flawed (as well as to sustain it) you have to have quantitative reasons. I was interested in the book because I think that trends are ubiquitous in trading and I hope that this author can bring an explanation (I mean a quantitaive one, or a one sustained by statistics). I don't know if he provides something like this.
Not being a trader, for me, does not diqualifies him to do some research on trend following theory.

i'll be happy to answer you. trend following , as defined by the book's author, when tested shows results a random fashion. there is no edge to buying higher highs, or selling lower lows. how many movements in one direction ( any time frame ) increase the probability that the next movement will be in the same direction? if a flipped coin comes up heads 10 times in a row, are you in a heads trend?

the author does not shed light on your question, however, the book is entertaining.

this has been discussed ad nauseum on elite. do a search, if you want to learn more.

surf

 

[marketsurfer]

Quote from kiwi_trader:

MC is a gifted "author" who has taken learning traders for a ride with his overpriced courses and pathetic support for years. To ........edit

Also, the amazon reviews on the book are stacked with negative reviews removed at his request. Its a funny old world ... at least the markets are honest.

i just returned from a hedge fund symposium in NYC. what i found quite interesting is christian baha's billion dollar fund--SUPERFUND's booth was giving out "trend following"--they had 100's of copies of the book. the book does not directly endorse or even mention superfund. this is incredible marketing power on MC's part. no idea how this was accomplished, but i am impressed.

surf

 

[marketsurfer]

Quote from Thunderdog:

The book reads like a sermon. Imagine being hungry and then filling up on pop corn. Having said that, I do not believe that the premise of trend following is "fatally flawed" as repeatedly proclaimed and pronounced by marketsurfer.

MC claims to be the "evangelist" of trend following. perhaps the sermon comment is not off the mark.

surf

 

[Thunderdog]

Quote from marketsurfer:

i'll be happy to answer you. trend following , as defined by the book's author, when tested shows results a random fashion. there is no edge to buying higher highs, or selling lower lows. how many movements in one direction ( any time frame ) increase the probability that the next movement will be in the same direction? if a flipped coin comes up heads 10 times in a row, are you in a heads trend?

the author does not shed light on your question, however, the book is entertaining.

this has been discussed ad nauseum on elite. do a search, if you want to learn more.

surf

You seem to be laboring under the faulty premise that there is only one way to define a trend and then trade it. Such a conclusion is either naive or self-serving. Particularly amusing is that you accept at face value such a definition from a non-trader whom you clearly do not hold in high regard. In playing card parlance, you are stacking the deck. Perhaps Covell is not the only "creative" marketer in this discussion, eh?

 

[StoragePro]

Good book - unless you want to learn something about trends and making money from them.

He goes on and on - with interest, but you never learn anything.

Trends (IMHO) are the most profitable things to invest in, but don't look for any answers on how. there is none.

Would I buy it? Sure - lots of pithy quotes and anecdotes.

 

[marketsurfer]

Quote from Thunderdog:

You seem to be laboring under the faulty premise that there is only one way to define a trend and then trade it. Such a conclusion is either naive or self-serving. Particularly amusing is that you accept at face value such a definition from a non-trader

pray tell, mr. dog.



a series of higher highs or lower lows is the only way i know to define this term.

how do you define a price trend?

i am always open to new ideas.


surf

 

[illiquid]

I'm curious -- for those who don't believe in trend following, what happens if you get into a trade for whatever reason, and it just keeps going in your favor? Do you simply exit the trade because "trend following is faulty"? I mean, if it's stupid for someone else to sell while something is trending lower, doesn't that also imply that you have to cover your short?

Also: does calling a reversal and suffering an initial drawdown before it finally turns and starts "trending" your way, somehow make that trade more valid, vs a trend follower who enters at the exact same price, only instead has waited for the market to start confirming that direction before entering?

 

[Thunderdog]

Quote from marketsurfer:

pray tell, mr. dog.



a series of higher highs or lower lows is the only way i know to define this term.

how do you define a price trend?

i am always open to new ideas.


surf

If I were to tell you my own definition of a trend, I would essentially be disclosing the method by which I trade it. The setup is integral to the definition. It is easy to beat up boilerplate definitions as you seem to enjoy doing, however, few people will disclose proprietary definitions for your testing pleasure. I am certainly not among them.

 

[Thunderdog]

Quote from illiquid:

I'm curious -- for those who don't believe in trend following, what happens if you get into a trade for whatever reason, and it just keeps going in your favor? Do you simply exit the trade because "trend following is faulty"? I mean, if it's stupid for someone else to sell while something is trending lower, doesn't that also imply that you have to cover your short?

Also: does calling a reversal and suffering an initial drawdown before it finally turns and starts "trending" your way, somehow make that trade more valid, vs a trend follower who enters at the exact same price, only instead has waited for the market to start confirming that direction before entering?

Exactly!

 

[HoustonMark]

Quote from marketsurfer:

there is no edge to buying higher highs, or selling lower lows. how many movements in one direction ( any time frame )

surf

Agree...you may want to try buying higher lows and selling lower highs....that could prove more interesting....not to mention more profitable....