is trend following really profitable?

Discussion in 'Technical Analysis' started by traderzhangSan, Jun 21, 2010.

  1. Daal

    Daal

    No they are not, look at the studies, S&P500 futures are negatively correlated on a daily basis. Stocks are mean reverting and thats not an opinion, its what the numbers says
     
    #11     Jun 22, 2010
  2. To answer another part of the OPs question, the most profitable systems are those that are always in the market AKA "Reversal systems". The theory is that it is then impossible to miss a large trend move because you are always either Long or Short. (You don't see the word impossible too often when it comes to trading) Lots of whipsaws and drawdowns are applicable here but testing does support this.
     
    #12     Jun 22, 2010
  3. i've never understood the term 'trend trading'
    but it seem to suggest such traders have no understanding of market dynamics which
    for me and many others is a comparitively simply matter
    for me a price movement in the same direction whether for a period of seconds or
    months is a trend
    choosing to remain in a seconds trend for many minute depends on the interpretation
    from a higher timeframe, unless one wants to scalp the waves within the trend
    so what's important istm is being able to guesstimate if you will a given timeframe's
    price and time targets
    while there are many theories and methods of how to guesstimate, 'trend trading's'
    doable for me with the fibo tool and a basic understanding of EW
    which in my bias makes it seem that anyone Not using these methods IS guessing
     
    #13     Jun 22, 2010
  4. Thanks for the link, this is what I was looking for. A very good strategy.
     
    #14     Jul 5, 2010