Why so many amateur traders trade only against the main trend?

[kut2k2]

Quote from Sky123987:

I always see people say this. Go with the trend. So I took about a thousand instruments and applied the following strategies.

Daily & intra day
1)
Buy if 50 day moving average is > the 100 day moverage average
Sell if 50 day moving average is < sell 100 day moverage average

2)
Buy if we are at a highest high in the past 50 days.
Sell if we are at a lowest low in the past 50 days.

3)
I've also, applied several strategies if the long term trend is up, intra day it is down, or long term trend is up and intra day it is up.

I've never found any edge w/ these strategies.

Without knowing your testing period or your money management method, there's no way for someone else to evaluate your results. But most significantly, why did you settle on the parameters 50 and 100?

This I do know: the market is constantly changing, so both you and your trading tools need to be adaptive to keep up.

 

[Sky123987]

I've actually tested many parameter, not just 50 / 100. Still no edge

Test it yourself you'll see

 

[Lucrum]

Sometimes it's a need to be smarter than the market/everyone else.

 

[Voodoo-king]

Quote from Lucrum:

Sometimes it's a need to be smarter than the market/everyone else.

well, of course, but sometimes the market moves in insane enough ways to eat people far from the bottom on the IQ ladder.

 

[ljmlmvlhk]

Quote from crgarcia:

And lose big as a result.

I knew traders calling a top in crude oil since $80, and trying to find a bottom in the S&P since the 1400s.

Because they approach trading / investing from the wrong perspective.

These guys always seem to have an opinion on what is happening, why it’s happening and what will happen next.

Some of these opinions may arise due to the media’s influence which has a fetish for publishing why and what next. However they are in the business of selling and they sell that what people wish to hear.

There are far too may unseen and unknown variables which exert an influence on price movement for one to be able to predict.

Our friend Rennick attempts to predict, but this is slightly different.
Why? Very short term, ie a couple hours and it is done with a sense of humor, more a short term probability sort of thing, but beyond that, predicting is futile, unless one has major concrete inside info.

 

[ammo]

the majority of the floor traders didn't have an edge,just a feel for the changes in momentum,et er's are all looking for a system,i've seen a few here that are successful with them,and a lot more looking for them,you have to have market sense,whether u use a system or not,it's a game like football or any other sport,u have to react quickly and u need experience to know how to do that,that just takes time to aquire

 

[trackstar]

I trade 2 systems, one that identifies a chop setup and one that identifies a trending setup. Lately the chop has been making me most of my money....it may just the the instruments I'm trading though.

 

[trackstar]

Quote from Sky123987:

I've actually tested many parameter, not just 50 / 100. Still no edge

Test it yourself you'll see

I use moving averages as a filter. They are a part of a profitable system for me. Maybe I could trade without them but they sure make it very easy for me to flip through a lot of charts in a short amount of time.

 

[OldTrader]

Quote from Sky123987:

I always see people say this. Go with the trend. So I took about a thousand instruments and applied the following strategies.

Daily & intra day
1)
Buy if 50 day moving average is > the 100 day moverage average
Sell if 50 day moving average is < sell 100 day moverage average

2)
Buy if we are at a highest high in the past 50 days.
Sell if we are at a lowest low in the past 50 days.

3)
I've also, applied several strategies if the long term trend is up, intra day it is down, or long term trend is up and intra day it is up.

I've never found any edge w/ these strategies.

Just thought I'd let you know: there is no edge, because the market changes.

The big winners in the market use their head to figure the existing market out. That's what pays the big money.

Testing the market for moving average crossovers, stochastics, MACD, etc etc etc will never have any "edge" at all.

OldTrader

 

[Johno]

Because they haven't learnt to think clearly, the markets, as in business and life punish wishful/wishy washy thinking! Sadly there is no substitute for experience! On a more practical note, moving averages are a very minor part of the trading equasion, entrepeural creativity being the majority component, lateral thinking. Trading by the numbers is very unlikely to work for most people hence the extremely high observed failure rates of new entrants.

Best Regards

Johno