Why trend trading does not work?

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Please explain why trend trading does not work?

Here is a visual explanation of a trend trader. He is like a driver who looks in the rear view mirror while driving. If the rear view mirror says the road is fine, he keeps driving, and changes course only when he says damages/red stuff in his rear view mirror.:D .... At which point he reverses the gears to complete the job...
 
Quote from tradingjournals:

Please explain why trend trading does not work?

Here is a visual explanation of a trend trader. He is like a driver who looks in the rear view mirror while driving. If the rear view mirror says the road is fine, he keeps driving, and changes course only when he says damages/red stuff in his rear view mirror.:D .... At which point he reverses the gears to complete the job...
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Most traders that have problems with "trend trading" do not know how to identify a trend as it is occurring in real-time except for via hindsight analysis. In addition, most traders develop "more fear" while trying to trend trade in comparison to other types of price action trading. Thus, that increased fear usually results in poor performance even if they did get the trend direction correct.

Mark
 
Quote from tit_head:

Stupid thread. There are trends within trends within trends... You just don't know how to trade.
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Stupid answer. :D

What makes you think I do not know what you think you know?

Trends are a consequence of the negative sum game. That is why there is and there will always be trends. Those who are skilled and/or luck may think it is because of the trend, while it could be that it is just a reflection that they are among the skilled/lucky pool.


Mark: You made a good post!
 
Quote from tradingjournals:

Please explain why trend trading does not work?

Here is a visual explanation of a trend trader. He is like a driver who looks in the rear view mirror while driving. If the rear view mirror says the road is fine, he keeps driving, and changes course only when he says damages/red stuff in his rear view mirror.:D .... At which point he reverses the gears to complete the job...
More...

I never understood why people on this site are so out to prove why different strategies don't work. Some guys do great trend following.....some guys do great with mean reversion.

You can say what you want about trend traders. But in the long run the funds/traders I have encountered over the years that have blown out are the ones who fade moves. In the summer of 2008 a lot of the mean reverting funds got decimated...some shut down, some are still on life support barely alive.

If you want to use driving as an analogy:

Trend Fading/Mean Reverting is when you have a person stand in the road with a 18 wheeler approaching at 100 mph....


Do you want to be the guy in your first analogy who gets banged up once in a while or the guy in the second who gets run over and never gets back up on his feet?
 
Quote from EPrado:

I never understood why people on this site are so out to prove why different strategies don't work. Some guys do great trend following.....some guys do great with mean reversion.

You can say what you want about trend traders. But in the long run the funds/traders I have encountered over the years that have blown out are the ones who fade moves. In the summer of 2008 a lot of the mean reverting funds got decimated...some shut down, some are still on life support barely alive.
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Complete brilliance. Well said, sir.
 
Quote from tradingjournals:

Please explain why trend trading does not work?
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It isn't fair to say that "trend trading does not work". There are several trend-followers who have been making consistent profits for the past 20 or even 30 years and have only missed 1 or 2 years barely.

I agree that trend trading is hard. There are mathematical explanations for it, this is one that I liked.
 
Quote from bone:

Complete brilliance. Well said, sir.
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It was well stated. Unfortunately I know from experience and observation that the thread starter is too stupid to comprehend it.
 
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