went long SPY

Quote from 1a2b3cppp:

When people take a position "with the trend" or because whatever indicator told them to, they are predicting that price will go in that direction.





I have never met a profitable trend follower who can QUANTIFY how to define a trend.

Sure it's easy to look at price now and say "oh yeah we're in a downtrend" but nothing says that as soon as you enter price won't turn against you.
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So if you KNOW "we're in a downtrend" then WHY BUY? Yes I know nothing says prices can't reverse just after you get in....but nothing says it can't continue either. Most things want to keep moving in the same direction. Trends usually slow down before reversing course. Having a stop loss helps protect you in these instances.

Would you jump into a moving river and try to swim upsteam? Nothing says a team of beavers couldn't build a dam and stop the river flowing...right? At the moment you jump in to the moving river it was moving against you,...why not wait until it at least slows down a bit before you even take that chance?

As for "quantifying a trend" it is not really something to quantify as it is to QUALIFY as a trend. There are many different ways...one of which is MA crossovers, or ADX & DI lines. You can say they do not work but i will tell you they do...especially when combined in multiple timeframes. A single solitary timeframe and MA crossover pair will lead to alot of whipsaws as you say. The key is in trying to figure out when to use trend following techniques and when to use other techniques when the market is consolidating. No one system works in every instance. However, suffice it to say we are NOW in a downtrend....if that is obvious (and it should be) then why would you place a buy on the long side???...I still dont get that. Could you QUALIFY your reasoning behind that? If not..the this "technique" will not work for you either.
 
Quote from noob_trad3r:

popping up to 111.57
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112.40 now, Dow +153, amazing...

I hope you held on to your position. Good call (on hindsight).

I missed this one. I read in Twitter the Harris' blog talking about early signs of a rebound this morning and of a high prob. for a positive close but I discounted the analysis.
 
Quote from N54_Fan:

So if you KNOW "we're in a downtrend" then WHY BUY?
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Because I cannot predict price, and even if we are in a downtrend, I do not know how much longer it will last.

When I tried to be a trend trader I noticed that price had a habit of reversing every time I took a position.

If trend trading works for someone then I suggest they continue to do it. Heck, if I could predict direction I would enter with much larger positions right away and make a lot more money!

Yes I know nothing says prices can't reverse just after you get in....but nothing says it can't continue either. Most things want to keep moving in the same direction. Trends usually slow down before reversing course. Having a stop loss helps protect you in these instances.
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I've never seen those variables you mention be quantified in a way that was profitable, and after years of studying the markets, I am unable to quantify them myself.

I have seen people try to quantify them (for example, the "trend" exists when two MAs of differing lengths are going in the same direction, or based on the slope of a single MA, etc.), but I've never seen a system like that that made money over time, nor have I been able to personally quantify the markets in such a way and have it end up being profitable.

Usually the people who talk about trend trading forget to tell you that their stuff doesn't work in chop, yet neither they nor anyone else has a way to identify chop ahead of time (because price cannot be predicted) which is why their trend following systems lose money over time; the chop gives it all back plus more. Heck, even something like MACD is profitable in the right environment, but you never know beforehand if you're going to have nice sweeping trends and make money, or chop and lose it all.

But hey, if it works for you, then by all means, do it.

I'm not one to tell people how to trade if what they are doing is working.

If it ain't broke, don't fix it.

Would you jump into a moving river and try to swim upsteam? Nothing says a team of beavers couldn't build a dam and stop the river flowing...right?
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That analogy really didn't help prove your point.

It would have been applicable if water currents randomly changed direction.

As for "quantifying a trend" it is not really something to quantify as it is to QUALIFY as a trend. There are many different ways...one of which is MA crossovers, or ADX & DI lines. You can say they do not work but i will tell you they do...especially when combined in multiple timeframes. A single solitary timeframe and MA crossover pair will lead to alot of whipsaws as you say. The key is in trying to figure out when to use trend following techniques and when to use other techniques when the market is consolidating. No one system works in every instance. However, suffice it to say we are NOW in a downtrend....if that is obvious (and it should be) then why would you place a buy on the long side???...I still dont get that. Could you QUALIFY your reasoning behind that? If not..the this "technique" will not work for you either.
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Hey man, if those indicators work for you, use them!

I would use them if they worked for me.
 
Quote from iceman1:


10-03-11 02:49 PM

I don't see that as a bad idea; scale in and no doubt you will be UP significantly by Thanksgiving.

NO WAY this vola keeps escalating without a large counter-trend reversal and/or rally occurring soon.

Q4 is "typically" a good time from the long side. Plus its the 3rd year of a presidential cycle and SPY is off big - - - which historically is a precursor to a large counter trend move.

I thought it would happen today. But things are pretty uncertain so no one wants to be the 'sucker at the table'.
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as I was saying...
 
Quote from iceman1:

as I was saying...
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You're honestly looking for a pat on the back? Please. I saw this same sort of thing back in 2008-09 where guys would make vague calls, the market would drop 5%, rally 8% and they were doing this same load of bull.

The extreme volatility gives both sides of the trade some momentary bragging rights, but usually kills both of them given enough time and exposure.
 
Quote from denner:

You're honestly looking for a pat on the back? Please. I saw this same sort of thing back in 2008-09 where guys would make vague calls, the market would drop 5%, rally 8% and they were doing this same load of bull.

The extreme volatility gives both sides of the trade some momentary bragging rights, but usually kills both of them given enough time and exposure.
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You have brains right? And, I assume you can read?? . So... let's wait until THANKSGIVING before you start saying anything. ONE day does not necessarily create a reversal; and today in my view was not a KEY reversal,... so I would not be surprised to see lower prices.

However, what I said about significantly higher by Thanksgiving... will be true in 8-9 weeks.

Let's wait and see.
 
Quote from iceman1:

You have brains right? And, I assume you can read?? . So... let's wait until THANKSGIVING before you start saying anything. ONE day does not necessarily create a reversal; and today in my view was not a KEY reversal,... so I would not be surprised to see lower prices.

However, what I said about significantly higher by Thanksgiving... will be true in 8-9 weeks.

Let's wait and see.
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So, your "as I was saying" was not to be interpreted as some sort of self-aggrandizing statement?

I don't have a dog in this race, so it's not really a big deal to me either way, but I find the whole argument about "we'll be higher by Thanksgiving" as sort of a non-starter if we trade 8-10% lower between now and then.

Then again, I heard the same exact things back in 2008 and 2009 as everyone was convinced that the one day bullet rallies higher indiciated a definitive bottom.

I've got a feeling you got hurt real bad in 2008 and 2009 and that's why you disappeared for a few years.
 
Quote from iceman1:

as I was saying...
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LOL,...Better to be lucky than good huh?

You guys think a 30 min rally (albeit a big one) erases 65 days of a downturn? Highly unlikely that the trend changes like that,...but if you can make money fighting the trend then more power to ya.

I am NOT saying there is no way this is a reversal,...even a short term one. Just saying that reversals usually do not occur like this. If it continues higher and starts a new trend I will join in the celebration with you....for now I am highly suspect of this rally.

I suppose one of the greatest things about trading is that 2 completely opposite points of view can BOTH be right and make money.

Good Luck
 
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