trend following - quo vadis?

Quote from jsp326:

I didn't bother reading VN's interview and I'm not a fan of Woodie, but did like your interview with Nelson Freeburg. He's a great mechanical trading system tester and designer. Of course, he's also partial to price behavior and trend-following systems...
:D
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Where can I find the Freeburg interview?
 
Quote from man:

okay. first of all i thank everyone for the discipline here. actually i think i was the only one with nasty talking ...

second thing. i am truly on the quant side of things. i guess it would be called "edge"-world here. my thing is to put things in coded form. then they have to show how good they truly are. before that they are just ... ideas. and most are crap.

having said that i truly respect discretionary traders, simply because their brain is the most powerful cpu out there when it comes to creative and complex pattern recognition on a very limited set of time series. i think this is what takes place here: yes the graphs shown make clear where the decision points are, but they depend on the trend lines and these are (correct e if i am wrong) not automatically produced by coded formulas. so, though i do not doubt by any means the quality of the talk, i have to make a step aside, since i am playing another game.

nevertheless i will take the chart as advised and look at it once in a while. maybe it inspires my other work ...


usually i am reluctant to do this kind of thing, since the graphs are often biased. take bollinger bands. by pure definition almost all prices are within the bands, yet that does not mean a thing when it comes to trading. price will remain within the band, yet not necessarily mean revert.
similar here. look at the chart posted before:

http://www.elitetrader.com/vb/attachment.php?s=&postid=741703

see the upward trend line that started somewhere at 22:59 (horizontal axis). look at the end of trend line at the beginning of 20:01. it is clear that this trend line could only be drawn after you know the end at the beginning of 20:01. but all the horizontal green and red lines seem to "know" the trendline before it manifested. if you tried to computerise this and let us say we start the beginning of 22:59 and i wait for the first new low (let us assume this could be easily done) i would detect it at the end of section 22:59. if i make the trend line now by connecting it with my initial low=start at the beginning of section 22:59, i come up with a very different trend line for section 27.59, with red and green horizontals on significant higher level.
what i am trying to say is that charts of this kind might look convincing, yet they are (at times) flawed by our mind's willingness to disregard details.
and note that we are tallking about frequent trading here, thus it matters a lot where the exact locations of the decision lines are.

i truly think that some individuals trained their mind in a way that they can trade based on graphs of the presented form. most can't. grats to those of you who do well with it.

resuming: it is not as easy as the graph tries to tell ... nevertheless: good discussing this. open for comments.


peace
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^^^^^^^^^^^^^^

RE; Chart headline keep it so simple[KISS]

Hey man;
I have some nephews also;
and @ very first glance i first thought that was a 1or 2 year chart. Probably cause i study 1 year charts much.

After study i now see why your warning about ''frequent trading''

Very seldom use straight trendlines drawn like that because even though discretion is important;
MUCH prefer trendlines like moving averages-mechanicaly drawn.
:cool:

And as far as KISS headline @ top of your chart, agree,with that,
sure/simple;
but other kinds of moving averages besides ''simple ''are helpful also


:cool:



Interesting your trendlineschart channels look amazingly like the ant trend channels on May sfomag.com.:D

Peace
thru strength
 
Quote from hank rollins:

i agree, nelson is a great guy and the world's number one systems designer. here's the link:

http://biz.yahoo.com/tm/050419/12534.html?.v=6


:D
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the number one system designer sounds very main stream if you ask me. trend following, indicators, that's it. if this interview was his business card ... hmmm.

hank, frankly speaking, would you have called him no 1 if you hadn't done that interview?
 
Quote from man:

the number one system designer sounds very main stream if you ask me. trend following, indicators, that's it. if this interview was his business card ... hmmm.

hank, frankly speaking, would you have called him no 1 if you hadn't done that interview?
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being that paul tudor jones among many other top managers utilize his services, yes, i would say he is well known as the top systems guy in the world.

:cool:
 
Quote from hank rollins:

being that paul tudor jones among many other top managers utilize his services, yes i would say he is well known as the top systems guy in the world.

:cool:
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only little offense intended - :) - i think that mister jones uses probably a bunch of tools ... for whatever, maybe as a sideTool ... a reference of that kind does not tell anything. and i think ... some additional offense ... you know that. it does not mean that mister jones actually uses it for trading. it is like saying: a trader from mr jones (hi to you!) is a member of ET, that is why ET is the reason for their success, that is why ET is superb (which it is ...).

btw, i think jones' trackrecord lost ground against his peer - at least in terms of sharpe. you are too bright to believe your own argument, aren't you?
 
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