Trend Trading to the MAX

marketsurfer · Jan 23, 2006

Quote from TheFinn:

I interpreted your coin-flip theory to mean that the markets are totally random- meaning each tick is completely random- its result (whether it is an uptick or a downtick) is not at all influenced by previous ticks. If that is what your metaphor was- then I think you're are wrong. If you meant something else, I apologize.

no need to apology, finn. differing interpretations of the data is what makes the market work. may i suggest "practical speculation" by niederhoffer and kenner for further insight of the ideas i am talking about.

best,
surf

TheFinn · Jan 23, 2006

Quote from marketsurfer:

no need to apology, finn. differing interpretations of the data is what makes the market work. may i suggest "practical speculation" by niederhoffer and kenner for further insight of the ideas i am talking about.

best,
surf

You could try to explain it here.

marketsurfer · Jan 23, 2006

Quote from TheFinn:

You could try to explain it here.

not without permission from thread starter. sorry.

surfer

psytrade · Jan 23, 2006

Neiderhoffer should write another book, how to write options and blow up twice.

marketsurfer · Jan 23, 2006

Quote from psytrade:

Neiderhoffer should write another book, how to write options and blow up twice.

perhaps the next one will be "how to be ranked number one in the world after blowing up". don't think anyone else can lay claim to this success in the annuals of the market.

slapshot · Jan 23, 2006

Quote from Thunderdog:

All those tests would have to assume a uniform working definition of a trend. In the real world, I doubt that we all assume that a trend starts at the exact same moment, even if we happen to be looking at the same data in the same time frame. Further, we would not all agree on what constitutes a sufficiently profitable trend, because we use different sizes of protective stops (reward-to-risk criteria). And that is even assuming that you are using price as the only variable, which is hardly always the case. You are trying to draw glib conclusions based on glib definitions.

I have to agree strongly with this - it is pretty tough to look at say a weekly or monthly chart of pretty much any market and not be able to define a trend as "generally moving up (or down) over time - making higher highs and higher lows".

But since there are so many 'trends within a trend' depending on your timeframe traded, it is pretty hard to objectively test.

RunTrade · Jan 23, 2006

Quote from marketsurfer:

not without permission from thread starter. sorry.

surfer

This goes for everyone contributing here:

Feel free to speak/debate about trends and their attributes. That is part of the reason I started this thread. At the same time, please do not argue and get off topic.

As for the journal update:

Two positions are still open, ESCL (+1.95%) NRPH (-0.12%)

*percentages indicate change from my entering price. I am still using stops at -3% and taking profit at +3%

marketsurfer · Jan 23, 2006

Quote from slapshot:

I have to agree strongly with this - it is pretty tough to look at say a weekly or monthly chart of pretty much any market and not be able to define a trend as "generally moving up (or down) over time - making higher highs and higher lows".

But since there are so many 'trends within a trend' depending on your timeframe traded, it is pretty hard to objectively test.

thank you, runtrade.

sure, one can see trends on a price chart. however, stating that higher highs and higher lows can be bought thereby increasing your odds of a succesful trade is not accurate. the odds of a percieved trend continuing after entering are consistent with randomness when tested.

best,

surfer

slapshot · Jan 23, 2006

Quote from marketsurfer:

thank you, runtrade.

sure, one can see trends on a price chart. however, stating that higher highs and higher lows can be bought thereby increasing your odds of a succesful trade is not accurate. the odds of a percieved trend continuing after entering are consistent with randomness when tested.

best,

surfer

How do you test someone's "perceived trend"? I believe the variables for all the different interpretations of trend are too numerous to test - this probably accounts for the randomness.

RunTrade · Jan 23, 2006

Quote from marketsurfer:

thank you, runtrade.

sure, one can see trends on a price chart. however, stating that higher highs and higher lows can be bought thereby increasing your odds of a succesful trade is not accurate. the odds of a percieved trend continuing after entering are consistent with randomness when tested.

best,

surfer

let me know if I am understanding you correctly...

If you enter an existing trend, the chances are random whether or not it will continue? Therefore, the only way statistically to be profitable from a trend is to enter before it begins?...which would mean that you would be trying to catch the knife and all data I have seen from that is that it is negative LT expectancy. How do you approach trading then?