Why trend trading does not work?

[marketsurfer]

Quote from tradingjournals:

You caught it! I waiting to see if someone here on ET would catch it.

There is at least one other guy who repeats it a large number of times. It seems that the incoherence in the incoherence have not been realized yet.

There are things that cannot be hidden.:

Excellent points!

My opinion is there is zero difference between fading and going with a trend. Without information both are simply guesses as to direction.

Asymmetrical information flows allows the market to exist. Everything else is noise.

 

[marketsurfer]

Quote from b.hull:

While trend following may have its merits, I have always suspected the critical thinking is left to those who initiate the trends, the fundamenatal analysts. Trend followers are left to surmise the direction of the trends and are typically "late to the party".

Exactly. MosT technical t trend traders are turned into turtle soup.

 

[tradingjournals]

To those who are friends with trends: time is now around 2:16PM. EUR/USD has been rising after the Fed news. It is now at 1.4053.

Would shorting it at current time and price be with-the-trend or against-the-trend?

Could you answer before Mr. Hind Sight?

 

[plyka]

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. .... At which point he reverses the gears to complete the job...

I can tell you don't make much money trading. I'm not a trend trader myself, i actually pick bottoms and tops, whether short term inside a longer term trend, or downright BOTTOMS and TOPS. The point is, that a winning trader would know one reality in trading: you can make money with ANY strategy, whether that's trend trading, range trading, buying major bottoms/tops or whatever. The reality is that money can be made in many different ways. It is all about taking entries which have a higher probable outcome than your risk. This is possible to do in trend trading. It takes experience and understanding, but it can be done.

For someone who doesn't understand this very simple reality, you have a lot to learn if you're going to start making major money.

 

[Lucrum]

Quote from plyka:

I can tell you (tradingjournals) don't make much money trading.

You noticed that too huh?

 

[justrading]

Quote from b.hull:

While trend following may have its merits, I have always suspected the critical thinking is left to those who initiate the trends, the fundamenatal analysts. Trend followers are left to surmise the direction of the trends and are typically "late to the party".

I think by its basic approach, trend following would mean being late to join the party and also being late to leave the party - the objective being to take a decent chunk between high and low.

The best explanation I have encountered about how to identify a trend and a change of trend is in Chapter 7 of "Trader Vic - Methods of a Wall Street Master" by Victor Sperandeo.

 

[jazzguysoca]

You can make money trading or fading trends (although I make most of my money doing the later).

Trend traders get paid to jump on the train; RTM traders, for jumping in front of it. Both in a timely manner.

Neither is inherently superior to the other, IMHO.

 

[tradingjournals]

Quote from plyka:

It is all about taking entries which have a higher probable outcome than your risk.

How many of you find the above statement complete/correct/accurate or inaccurate/incorrect/incomplete?

 

[bone]

Ummm, I still have not seen a post yet in this thread from a trend advocate who did not also admit that fading markets is also a profitable strategy.

Same cannot be said for the faders. Almost like class warfare.

And how is it that market fundamentals are somehow extremely late getting priced into a market ? Does a big commercial or producer neglect to price fundamentals into the marketplace ? I was a commercial energy trader for several years, and I did not find that to be the case at all - we ALWAYS priced our viewpoint as an energy producer into the marketplace.

 

[tradingjournals]

Quote from justrading:

I think by its basic approach, trend following would mean being late to join the party and also being late to leave the party - the objective being to take a decent chunk between high and low.

Very good!