Why Do Currencies Have Such Long Trends ???

Fundlord

Fundlord

They tend to trend for such long periods giving long term traders a great chance to make $ but why is that ?

Stanley druckenmiller said he never saw a currency trend last less than 2 years.

Even @marketsurfer who disputes trend following in general admits that currencies tend to trend.

But why, as opposed to stocks, commodities etc ?
 
Fundlord said:
They tend to trend for such long periods giving long term traders a great chance to make $ but why is that ?

Stanley druckenmiller said he never saw a currency trend last less than 2 years.

Even @marketsurfer who disputes trend following in general admits that currencies tend to trend.

But why, as opposed to stocks, commodities etc ?
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??? I've been long S&P since 2006. True, there were a few bad years, but since 2009 it's been pretty much straight up. Smooth as a baby's bottom. That short eur was also a good long trade. For that matter cl has been a phenomenal trend. EVERYTHING IS TRENDING! (except for whatever shithole position I put on. Then it starts chopping like Paul Bunyan.)
 
Visaria said:
Lol, i know the feeling.
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I shouldn't complain, I got in on that long EUR/AUD at the bottom and sold on 8/24 at the top, not because I'm good, but because I was so slow by the time I hit enter it was the very top (like 6500 something), my stop was still sitting down there at 3750. I was also long a full load of eur.usd, but that was over a week ago, now it is back to chop, chop chop, another losing day.

I've traded the chop and I've traded the trend. The chop is nice because you make money every day. Until that one day that wipes out the whole months profits. Now I trade the trend and lose money almost everyday, until I catch that one rare trend and hopefully it wipes out all those small losses.
 
Have you ever done an analysis of your trades? Ken Grant, risk manager to some of the biggest and profitable hedge fund traders, says their ranking of profits and losses in every case fall in an approx 90/10 distribution. That is the top 10% of their trades (if you rank all trades made in a year by biggest profit to the biggest loss) account for all the net profits made. The other 90% just wash i.e. aggregate to zero. Or in other words, 1 in 10 trades makes all the profit, the other 9 break even overall.

I did this analysis on my trades too, and yeah, about 9% of trades made all the profit. Quite amazing. Would be interested to know if yours is similar.
 
Visaria said:
Have you ever done an analysis of your trades? Ken Grant, risk manager to some of the biggest and profitable hedge fund traders, says their ranking of profits and losses in every case fall in an approx 90/10 distribution. That is the top 10% of their trades (if you rank all trades made in a year by biggest profit to the biggest loss) account for all the net profits made. The other 90% just wash i.e. aggregate to zero. Or in other words, 1 in 10 trades makes all the profit, the other 9 break even overall.

I did this analysis on my trades too, and yeah, about 9% of trades made all the profit. Quite amazing. Would be interested to know if yours is similar.
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oh yes, I'm not a numbers guy, but that sounds about right. Anybody could trade my strategy. But very few beginners could trade it successfully because most would quit before the 9 or 10% kicks in. And the thing they always say when they are starting out is, "I'm not trying to hit home runs". Well neither am I. I trade multiple pairs and sometimes a good profit is just some small timely profits in all of them combined. But often the game is won in the last inning on a big home run.
 
Fundlord said:
They tend to trend for such long periods giving long term traders a great chance to make $ but why is that ?

Stanley druckenmiller said he never saw a currency trend last less than 2 years.

Even @marketsurfer who disputes trend following in general admits that currencies tend to trend.

But why, as opposed to stocks, commodities etc ?
More...

Because they follow credit cycles very closely.
 
Maverick74 said:
Because they follow credit cycles very closely.
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credit cycles trend? Reliably? I was long bonds for like ten years. It didn't matter what the hell else was going on in the world, war, drought, recession, all those bonds did was make money, year after year, like 6% every year. I sold them too early, but I certainly haven't seen any trend going back down. Meanwhile, over on the farm, those currencies have been very good, but then again my currency time frame is a lot shorter than my bond time frame was.
 
loyek590 said:
And the thing they always say when they are starting out is, "I'm not trying to hit home runs".
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Don't you think they should be trying to hit home runs though? How do you get that one in ten trades that accounts for all the net profit if you don't?
 
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