Why trend trading does not work?
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I'd do Maria any day (if I could get her to shut up for five minutes)
Well, if you want to fade a market for size and wear them... do it on your own nickel.
Unless you have an arbitrage or spread going any firm or desk will have security escort your ass right out the front door. Those guys do not last. You are expected to create alpha returns - using your smarts and creativity to consistently make money for the firm. Everybody wants that bonus check. Just because you have a 'top 5' MBA and can tie a Windsor knot does not mean they will let you sell 20K ES into a monster rally and sit with them for hours or days while they leave a big mark. No way - that is complete fiction. If you are up big already for the year; fine.
The problem with timing a market for a fade is that you will always be wearing them.
Unless you have an arbitrage or spread going any firm or desk will have security escort your ass right out the front door. Those guys do not last. You are expected to create alpha returns - using your smarts and creativity to consistently make money for the firm. Everybody wants that bonus check. Just because you have a 'top 5' MBA and can tie a Windsor knot does not mean they will let you sell 20K ES into a monster rally and sit with them for hours or days while they leave a big mark. No way - that is complete fiction. If you are up big already for the year; fine.
The problem with timing a market for a fade is that you will always be wearing them.
Maria has fked more retail guys w/ CNBC garbage. Stand in line if you want some.
In terms of trend trading, it works. How does it not work? What I comprehend is that you want to be macho and counter trade a trend?
I have not heard someone counter trade a trend before. It goes beyond common sense. Sure you can, but in the context of things, why make it so hard?
The problem I see constantly is a falsified ego. 99.9% of these people are unable to force a bottom, nor call a top, because they do not have the power to do so.
Real and smart traders read the trend and trade w/ it. Your ego, top calling, and pivot points should be the least of your concerns. Trading to make money is what you should be doing.
And NO< trends are not hindsights, they are obvious when they swing.
Huh? Isn't the same ego involved in betting that the trend will continue as is that the trend will end?
I don't understand the difference. How many moves or series of moves in one direction increase the odds that the next move or series will be in the same direction? If you flip a coin 10 times and get heads 10 times, are you in a heads trend?
something doesn't make sense that it takes more ego to go against than with when no one knows when it will change.
surf
Oh, you know when you're in the midst of a trending market. Stupidly obvious in terms of technicals and which side the initiating order flow is on. You have to understand and then accept the nature of the corrections and retracements. In that sense, trend following requires 'fading' of a different sort.
The difference is that timing a correction in order to enter on the same bias side as a longer term trend is inherently better risk/reward skew and ultimately less painful than strictly timing a trending market to reverse.
interesting, thanks!
surf
Ego is irrelevant and has nothing to do with how I chose a live system to trade.
I've been successfully trading an automated intraday RTM system for 2 years now, which backtests 100% out of sample over 8years with a much smoother equity curve than any trend trading system I've yet tested.
But I have no religious convictions about trend vs RTM; I trade what is most profitable on a risk adjusted basis.
My view is that there is no inherent advantage of trend over counter trend systems. I'd dump my RTM system in a second if I found a trend system with better risk adjusted returns.
Surf, honestly, I have been trading since 1991 and making a living at it. Not FU money (to me at least), but a very good living. A hell of a lot more than an Engineer.
You are going to wear them. Any way you look at it. And every trade I put on I can always find some imperfection with it in hindsight.
If you are fading a market to time a broad trend reversal, you are going to get your fucking head handed to you. You have to have a ridiculous pain threshold.
If you are buying into a correction in order to be on the same entry bias as what you perceive to be the longer term trend, the pain threshold is much more tolerable and the risk/reward skew is demonstrably greater. Demonstrably. As you can see by the numerous market timing calls made here on ET, the percentages in it are crap. Besides, you don't have to time major market reversals in order to make money trading - because many successful traders will tell you that they don't themselves.
You are going to wear them. Any way you look at it. And every trade I put on I can always find some imperfection with it in hindsight.
If you are fading a market to time a broad trend reversal, you are going to get your fucking head handed to you. You have to have a ridiculous pain threshold.
If you are buying into a correction in order to be on the same entry bias as what you perceive to be the longer term trend, the pain threshold is much more tolerable and the risk/reward skew is demonstrably greater. Demonstrably. As you can see by the numerous market timing calls made here on ET, the percentages in it are crap. Besides, you don't have to time major market reversals in order to make money trading - because many successful traders will tell you that they don't themselves.
Either/or fallacy. When I trade I don't care whether there is a trend or if I am fading anything. It is all about probabilities. Good traders sometimes go along the trend and sometimes against it. Anything else is too dogmatic for me even if it works for others.
I went against the trend last week and I made easy money. Those who were afraid to go against it actually were handed their heads:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=223225
Just do what experience tell you. Forget about trends. Those are illusions.