Trend Trading to the MAX

[marketsurfer]

Quote from RunTrade:

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

1.If you enter an existing trend, the chances are random whether or not it will continue? 2. Therefore, the only way statistically to be profitable from a trend is to enter before it begins? 3. 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?

1. yes.

2. yes. but begining and ending of an illusionary, existing in the past construct is nebulus at best.

3. no. actually, one's returns are increased following buying after consecutive days of market declines and decrease buying following multiple days of market gains. this is based on 15 years of data on SP 500 by larry connors and is outlined in detail in his book "how markets really work"

4. i utilize mathematical models and fade extremes in sentiment. please see my public pre-katrina oil short, and my january GOOG short as examples of combining statistical modeling with fading extreme sentiment. i also tend to believe in mean reversion with stock indexes--- meaning declines are followed by rises and the opposite.

best wishes,

surfer

 

[psytrade]

Do you actually surf? Ive never seen a surfer come into a wave from the front, i imagine it'd be hard to do, sorta like shorting a "mean reverting" trend going from 90 bucks to 400.

 

[marketsurfer]

Quote from psytrade:

1.Do you actually surf? 2. Ive never seen a surfer come into a wave from the front, i imagine it'd be hard to do, sorta like shorting a "mean reverting" trend going from 90 bucks to 400.

1. yes, i have surfed.

2. please note i am talking about stock indices--- not commodities, currencies, or individual stocks with my comments.,in most cases. on ocasion i do trade commodites or stocks with these ideas.

best,

surfer

 

[Thunderdog]

Quote from marketsurfer:

4. i utilize mathematical models and fade extremes in sentiment. please see my public pre-katrina oil short, and my january GOOG short as examples of combining statistical modeling with fading extreme sentiment. i also tend to believe in mean reversion with stock indexes--- meaning declines are followed by rises and the opposite.

Interesting. You base your entries on a relationship with past prices (since that is how extremes are identified). And since your "mathematical models" implement past data in one form or another, then your independent coin toss earlier in this thread is an analogy that is completely without merit in the context of this discussion. You are talking from both sides of your mouth.

And I'm going to say this slowly because you always seemed to miss the point in past exchanges: whoever tested the "validity" of trends did so on the basis of his own specific interpretation of a trend and his own working definition of what a profitable trend is. Therefore, his only legitimate negative conclusion can be that HIS interpretation of a workable trend did not successfully extract a meaningful edge from the market. He cannot legitimately claim that everyone else's definition cannot work. That is a generalization that is beyond the scope of what he tested. And please make no mistake, my definition of an exploitable trend is almost certainly different than yours.

So remember, GIGO.

 

[Thunderdog]

Quote from marketsurfer:

...i also tend to believe in mean reversion with stock indexes--- meaning declines are followed by rises and the opposite.

A "mean reversion" can be characterized as a tendency, not unlike a trend. In fact, a "mean reversion" may be the "trend" that some people look for. Either way, it implies something other than the complete independence of past data, as suggested by your unfortunate coin toss analogy. Further, it illustrates the inanity of a singular definition of a workable trend for the purposes of drawing meaningless conclusions. It appears that your friend, VN, has a penchant for publishing "stuff" and raising ire. Not unlike you.

 

[kiwi_trader]

Surfer seems to have clarified his approach as mainly applying to indexes.

Not so much to commodities, currencies or individual stocks.

To some extent I agree with him but I have found that if you look at a range of timeframes for different entities (indexes are almost the least trendy things around on the interday timescale) you can find opportunities to profit from detected trends. Similarly opportunities exist to profit from reversion to varying degrees.

But, I'll be interested to see the thread owners effectiveness.

 

[Thunderdog]

Quote from kiwi_trader:

Surfer seems to have clarified his approach as mainly applying to indexes.

His approach is his own, and I certainly have no issue with that. What I have an issue with is his regular and ongoing reference to bogus "studies" based on one-dimensional definitions that seek to reach generalized conclusions beyond the scope of the limited studies themselves. This is the basis for misinformation, and I think he should stop it. I don't know whether he is in over his head or if he just likes to draw attention for its own sake like his friend, VN. Either way, it is getting old.

 

[marketsurfer]

Quote from Thunderdog:

Interesting. You base your entries on a relationship with past prices (since that is how extremes are identified). And since your "mathematical models" implement past data in one form or another, then your independent coin toss earlier in this thread is an analogy that is completely without merit in the context of this discussion. You are talking from both sides of your mouth.

you assessment is seriously week.

the sentiment extremes are not price related.

what else don't you understand?

surfer

 

[Thunderdog]

Quote from marketsurfer:

you assessment is seriously week.

the sentiment extremes are not price related.

what else don't you understand?

surfer

Really? No price relation whatsoever? Not even localized? When was the last time prices were at an all time historical low for a given market and the sentiment was "overbought?" Conversely, when was the last time prices were at an all time high for a given market and the sentiment was "oversold?"

No, I don't think that sentiment exists in a vacuum.

On the plus side, I find it amusing that you are talking down to me.

 

[RunTrade]

Journal Update:

Closed 195 ESCL @ $26.37 = +$150 Gross


NRPH is still open @ $33.74 (+0.57%)

I have decided to add a time stop of 4 days. After 4 full days, if the target is not hit, it is my opinion that the strength of the trend has declinded and should be sold since it is possible that the trend is ending (or reversing). Even with this, I can seperate the trades that hit either stop (+/- 3%) with trades that got stopped out because of the fading trend.

TOTALS:

Wins 2
Losses 0

Gross: +$360