Trend Following: Profitable Reality or an Illusion doomed to Failure?
- Thread starter AFJ Garner
- Start date
To use coin flips as a means to illustrate the behavior of financial market returns is the dumbest comparison I've ever seen coming from a trader.
Trend king Dunn smoking higher with 6.8 plus% gains for April so far and 28.4% overall for year.
I am sure this statement is true. Let's say you both believe in trends. But you will NOT pick the same market, same entry, and same exit........therein lies the problem. the BIG problem.
trend means nothing.....trend is always up right before the top.
so....now tell me how to duplicate Dunn and what they are buying now, when, where, and where they will exit
I don't believe in trend for making trading decisions.
just stating facts.
surf
I looked at the article.
It's foundation is flawed.
I have looked at trend following and I believe it does not work. reacting is not a solid foundational concept.
Position trading stocks is a good concept. I used a sample of 400,000 elements to prove in a system of making money in trend segments. (See the PVT one pager.)
An alternative not yet considered by the sorces presented here might be to change their concept of how trading works when using the operating system of markets, instead.
as stated here is it not possible for mostly anyone to clear their minds and reconsider the operation of a market.
A simple example follows.
A person begins to trade having never considered trading before. He is about 63 years old.
He does 62 tades following an approach. this takes 1/4 of a year.
His results are that he loses on two trades and profits on the rest. His annualized ROI on 27K, compounded, is 150K per annum.
His approach was to use a filtered lists of stocks. He "anticipated" instead of "reacting". He did not use market indicators as the OP mentioned.
Adding one month to the above data changed his annualized ROI from 150k to 250k.
He no longer position trades stocks.
It's foundation is flawed.
I have looked at trend following and I believe it does not work. reacting is not a solid foundational concept.
Position trading stocks is a good concept. I used a sample of 400,000 elements to prove in a system of making money in trend segments. (See the PVT one pager.)
An alternative not yet considered by the sorces presented here might be to change their concept of how trading works when using the operating system of markets, instead.
as stated here is it not possible for mostly anyone to clear their minds and reconsider the operation of a market.
A simple example follows.
A person begins to trade having never considered trading before. He is about 63 years old.
He does 62 tades following an approach. this takes 1/4 of a year.
His results are that he loses on two trades and profits on the rest. His annualized ROI on 27K, compounded, is 150K per annum.
His approach was to use a filtered lists of stocks. He "anticipated" instead of "reacting". He did not use market indicators as the OP mentioned.
Adding one month to the above data changed his annualized ROI from 150k to 250k.
He no longer position trades stocks.
Trend-like chart patterns emerge in all kinds of data. If you trade on technicals I truly believe that you can tailor your strategy to exploit trending data points. Your risk management approach should also address 'shutting off' your trend following strategy when market data isn't following a trend. Some people argue that trading on technicals like this is zero sum or even negative sum, but I think it just cuts out a lot of indecision. You should use technicals to abbreviate and express your market perspective. You should already know the 'why' so all you need to worry about is the 'how'. It's undeniable that trends emerge in a large number of instruments, but each instrument has different characteristics that can make one trend strategy unprofitable in a different instrument. A good understanding of trader psychology and how various trading activities impact price make it clear why trend-like behavior forms in prices.
classical trendfollowing days are over...but its true the markets still trends but differently from before.Nowadays you have to find a strategy to sell rallies and buy dips and scale out of positions as volatility increases in your favor.The markets have evolved to reduce the edge of robust methods otherwise trendfollowing funds would have become infallible ...now they are taken advantage of by the new apex predators.
