Trend Following Research

[bwolinsky]

Quote from Fishmonster123:

I'm new here. I'm looking for a message board where people talk about the specifics of what they do and when they do it. Thought this would be a logical place, but in scanning the last couple of years' worth of posts, it seems like it's really more of a place for people to engage in flame wars. The discussion seems to be whether trend following is/is not a good idea.

I'm already sold on the idea. That's why I'm here. But I'm far more interested in hearing about how small retail investors, with limited funds (50K in my case), get off the ground. What markets are you trading? How many markets are you trading? How did you come to those decisions? Where are you entering, and how did you come to those decisions? What kind of research are you doing? Where are you finding that research? Where are you setting your initial stops? Where are you exiting?

If no one wants talk about this, or if everyone feels protective of their proprietary secrets, or if someone wants to sell me their services, then I'll move on. But I thought I would throw it out there.

Hi, Fish, the flame war is founded basically because Mr. Covel, the OP, does not believe in rigorous mathematics or statistical analysis as a basis for trading decisions.

Jack Hershey rants, but to date only has one profitable trading system from Wealth Lab Pro due to special SPX Volume data at Fidelity.

I think talking about Trend Following is good for me, at least, as I used Mr. Schamp's indicators as the basis of my CTA in addition to my pairs trading arbitrage methods.

I think it's stupid that there is no substantial <i>original</i> discussion by the OP about Trend Following Research. Mostly it is a rehashing of already known public information, but as it has been awhile, I'm still working on trades that more beneficially relate to when the trend changes, not what the trend is.

I'm sure there is more benefit to making that analysis than by wondering what the trend is.

Open trades in Corn from 630 in an uptrend, Short NQ this week from 2319.25 covered 2289.25, down trend, nearly exact highs and lows, Oil long from 80.475, in an uptrend.

I've got to optimize on many of the other contracts I have, but these were some of the highlights, and I believe demonstrating knowledgable trend following involves when the trend changes, and just as we have spreadsheets that show how at the beginning of this thread, we'll have more spreadsheets on a futures portfolio.

I used a Quadruple Entry from Different Entries to pyramidd into the positions.

Aside from mere joking, these strategies clearly show how to identify trend and when the trend changes. I liked oil especially.

I've not found any other indicator as valuable as Price Physics. Even to debate its logic you'd have to read the book, and I have. Sophmoric observations about his video's are absurd. I like to work with hard mathematics and quantitative analysis over idle banter about people other than yourself when it comes to discussions about trading methods.

 

[marketsurfer]

Quote from Neenisti:

Was the comment necessary?

Yes, folks need to understand the fact of trend following being a marketing term for buy and hope-- the huge drawdowns prove this fact. Some will make money, others will not. There is no edge in trend following-- it takes vast resources, is extremely risky and simply not appropriate for retail or small funds at any time.

Surf

 

[kut2k2]

Quote from marketsurfer:

Yes, folks need to understand the fact of trend following being a marketing term for buy and hope-- the huge drawdowns prove this fact. Some will make money, others will not. There is no edge in trend following-- it takes vast resources, is extremely risky and simply not appropriate for retail or small funds at any time.

Surf

So how do you trade?

 

[marketsurfer]

Quote from kut2k2:

So how do you trade?

Prediction and anticipation of sequential moves. Please see the surf report for evidence of how it's done. No "trend following" here. I guess "trend riding" could be appropriate term for my style, but trends only exist in the past so it's really the wrong word.

 

[eudaemon]

Quote from EPrado:

...and what you call trading is some of the worst I have ever seen. Seriously man..you do almost everything wrong. The best part is you have some gigantic ego and act like you are some accomplished trader. Newsflash Surf..you are far from that...stick to writing cute little articles for Yahoo finance.

Basically the truth.

 

[eudaemon]

Quote from marketsurfer:

There is no edge in trend following-- it takes vast resources, is extremely risky and simply not appropriate for retail or small funds at any time.

Surf

Basically myths and beliefs of the ignorant.

 

[Butterball]

Quote from marketsurfer:

Yes, folks need to understand the fact of trend following being a marketing term for buy and hope-- the huge drawdowns prove this fact. Some will make money, others will not. There is no edge in trend following-- it takes vast resources, is extremely risky and simply not appropriate for retail or small funds at any time.

The above statements just reveal that you are 100% clueless.

 

[marketsurfer]

Quote from Butterball:

The above statements just reveal that you are 100% clueless.

Ok , just keep buying higher highs and selling lower lows. The public are trend followers by default and we all know what happens to the public.

The big names are spread across dozens if not hundreds of instruments -- if you can do this , more power to you. I know I dint have the capacity.

 

[marketsurfer]

Quote from eudaemon:

Basically myths and beliefs of the ignorant.

How many moves ( tics, minutes, hours, days etal) in one direction increase the odds that the next move or series will be in the same direction? This should be easily indicated by common statistical methods. if not, "trend following" makes no sense as a trading tactic and it's simply luck that the higher high goes higher ( or lower low goes lower). Just like buy and hold but paying more vig as you keep guessing OR suffer huge drawdowns like the big funds do consistently.
See surf report

 

[1prometheus]

Quote from marketsurfer:

Yes, folks need to understand the fact of trend following being a marketing term for buy and hope-- the huge drawdowns prove this fact. Some will make money, others will not. There is no edge in trend following-- it takes vast resources, is extremely risky and simply not appropriate for retail or small funds at any time.

Surf

Surf have you conducted any first hand research?

One thing I do agree is true, and that would make an interesting indicator if it could be computed, is that trend following is quite sensitive to the total amount of capital being deployed on the strategies. There is a huge yoyo effect where drawdowns happen with a large asset base, and runups occur when assets have been depleted.