Why Can't I Trade with the Trend

Quote from OldTrader:

What makes you think that a series of coin flips has anything to do with stock price movement? Perhaps the fact that you believe this simply illustrates your lack of ability with stocks, and perhaps indicates that you should stick to flipping coins.

In terms of "when a trend will end", I think you missed my point. I believe that I can identify certain conditions that indicate the beginnings and ends of trends, not with 100% certainty, but with "enough" certainty, and at a time when my risk to make a trade is relatively speaking small relative to the reward. But from YOUR standpoint, with your belief system where you believe nothing is more certain than a coin flip, the point I was making is that the end of a trend is no more certain than the beginning of a trend. What we know is that a trade can be wrong once...and that is at the end of the trend. Any other time your trade will be right as long as you have acted in the direction of the trend.

Here's an example: The market turned up in March 2003. In "hindsight" that is clear. Now, I don't know when you might have been able to say "yes, there is a trend, and it is up"....but certainly it should have been let's say within a few months or so from the bottom. And the point is that had you made a long trade then, it clearly would have been successful, a new high having been achieved just last week, 2 years later.

Again, in a trend the most unlikely thing that can happen at any point along the trend is that it will end. That isn't to say that it won't end, just that it's less likely than to continue.

And in your case, you don't believe you have any ability to determine the end of a trend, so there is no point to arguing anything other than it's continuance.

OldTrader
More...


interesting , old trader. thank you for the reply.

i heard once that every trade is a winner if you scale into to, and hold it long enough, and of course dont run out of capital.

if something isn't quantifiable, testable, and scaleable---i have no use for it. mathematically, there is no edge to "trend trading" in the traditional sense.
 
Quote from hank rollins:

"physics of price movement" ? please... give me a break.

i don't care if you respect me or not, dr.

it's the leading of newbies down the primrose path of delusions that i challenge. nothing personal.


several months, or more, can't remember--i invited you to discuss your methods before a group in NYC--you declined.... remember ?


if you system works for you, that is cool.... i don't have an argument with that...... it's obviously not scaleable, or repeatable--just like a really good poker player--somethings just cant be taught.
More...

You invited me to discuss my theorys to a group of closed minded greedy corporate talking heads, to which I declined. If it would have been to open minded academics, I would have been there in a heart-beat. You still promote the tired methods of a Market locked in tight ranges of the pre-90's and are unable to view any new technology or ideas from a standpoint of rational thought.
Your response speaks volumes. Be sure not to bump your toes at night on your way to bed by candlelight.
 
Quote from nzbryant:

Jane - there doesnt have to be a structure for a positive expectation. I have developed two systems on completely random numbers that have significant profits (with 99.9% t-test significance over thousands of simulations. Rules on where and when you enter and exit on a random number system can make you money (entries random or based on price movement, exits based on price movement and/or where you enter).
More...
A system that could make a profit with random increments would do extremely well in the real world.

Are you a billionaire yet?
 
Quote from hank rollins:

interesting , old trader. thank you for the reply.

i heard once that every trade is a winner if you scale into to, and hold it long enough, and of course dont run out of capital.

if something isn't quantifiable, testable, and scaleable---i have no use for it. mathematically, there is no edge to "trend trading" in the traditional sense.
More...

Let's go a step further. I submit that no one can trade the market without "trend trading".

Here's what I mean by that: Let's say that you go long. Makes no difference to me how you made the decision to go long....in your case, let's say you flipped a coin. Now the price begins to move in your direction. It's clear that you must hold the position long enough to make a profit....in other words, you must "hope" that it "trends" to your profit point.

Now, you may not have made your decision based on some of the more traditional methods of "trend trading"ie moving averages, moving above a prior high (or low), etc but nonetheless you are still dependent upon the markets ability to trend to make your profit.

All of us when it comes right down to it are nothing more than trend trades. Perhaps I get into a position in some manner determined in my mind by deciding that a market has "stopped" going down, has begun to "turn" and is now "heading" up. You say this has no more chance than a coin flip, which is how you decide. But in the end it makes no difference how we decided (especially if your contention is really true that the market is never any more than a coin flip).....we must still sit with our position long enough to realize a profit, which depends on the markets ability to trend.

I note by the way that you did not answer my question: How do you know that stock price movement is comparable to a coin flip?

OldTrader
 
Quote from OldTrader:

Here's what I mean by that: Let's say that you go long. Makes no difference to me how you made the decision to go long....in your case, let's say you flipped a coin. Now the price begins to move in your direction. It's clear that you must hold the position long enough to make a profit....in other words, you must "hope" that it "trends" to your profit point.
More...
What you're getting at is valid in general but does not apply to what price trend traders think they see on the chart.

Just because price has drawn itself with a certain slope over a previous timeframe doesn't mean it has done so due to a tendency that will continue into the tradable future.
 
Quote from OldTrader:


I note by the way that you did not answer my question: How do you know that stock price movement is comparable to a coin flip?

OldTrader
More...

That's the problem with most people who went to university. The think that they know everything and think in an academical way. They talk about the most complicated mathematical calculations and break their head thinking about random figures etc etc.....

But they don't even realize that flipping a coin is not at all the same as the price evolution of a stock. The market is driven by human mass behavior, while flipping a coin cannot be influenced at all.

If you flip a coin till eternity each side of the coin will come up approx 50% of the time. But in trading it is different.
What would you say if someone said:
i never had a loosing week for the last 5 years and i have more than 85% of profitable trades.
You will probably say that the statement was a lie.

So my question to the academical experts in trading: what return do you need to proof that stocks don't move at random? How many trades have to be profitable?

I have probably less than 20% of the intelligence of most people here. How is it then possible that i make good profits?
 
Quote from OldTrader:

Let's go a step further. I submit that no one can trade the market without "trend trading".

Here's what I mean by that: Let's say that you go long. Makes no difference to me how you made the decision to go long....in your case, let's say you flipped a coin. Now the price begins to move in your direction. It's clear that you must hold the position long enough to make a profit....in other words, you must "hope" that it "trends" to your profit point.

Now, you may not have made your decision based on some of the more traditional methods of "trend trading"ie moving averages, moving above a prior high (or low), etc but nonetheless you are still dependent upon the markets ability to trend to make your profit.

All of us when it comes right down to it are nothing more than trend trades. Perhaps I get into a position in some manner determined in my mind by deciding that a market has "stopped" going down, has begun to "turn" and is now "heading" up. You say this has no more chance than a coin flip, which is how you decide. But in the end it makes no difference how we decided (especially if your contention is really true that the market is never any more than a coin flip).....we must still sit with our position long enough to realize a profit, which depends on the markets ability to trend.

I note by the way that you did not answer my question: How do you know that stock price movement is comparable to a coin flip?

OldTrader
More...

Well stated!
 
Quote from NickelScalper:

What you're getting at is valid in general but does not apply to the specifics of the price trend traders think they see on the chart.

Just because price has drawn itself with a certain slope over a previous timeframe doesn't mean that it has done so due to a tendency that will continue into the tradable future.
More...

Trends have nothing to do with slope. Slope is a by-product of the trend and has nothing to do with the continuation of the trend.
 
You must log in or register to reply here.
Back
Top