Here is a link for you. It has to be fact because they say it is. right? Sort of like Mike. http://www.creationmuseum.org Stop listening to others and do some research for yourself. Trust me when I say it is more satifying then spending time with the group you typically hang with. Be a leader not a follower for a change.
The 2 minute expression by Covel is a very poor statement about a topic. There are many many things that he does not know about trends. These things I mention are facts....facts about trends. If you have heard Pring speak, he is in the same boat as Covel. When you sit in a session on trends with Oliver Velez, you will come to see a similar vagueness about trends, particularly in the area he avoids addressing: their beginnings. Prentice Hall representatives, Covel's publisher for his trend compilation, both in the financial department and the editing department, feel that there is still a lot left to be desired as well. Do not expect anyone to make sense of the snippet. Covel is not in a position to admit anything. Do get that straight. Covel is never going to be able to assign utility to trends. Covel cannot do that in any way. You are missing a lot. That is just the way it is in your realm or space. Read the Abstract of Magic Numbers in the DOW, Batchelor and Ramyar, Septembr 2006. The research examines the length and duration of successive trends in the Dow Jones Industrial average. This is research on a subject. The subject to be researched has to exist. It is possible that the subject of their research doesn't exist as you think Covel suggests. For people who make money using trends, they usually, over time become more knowledgeable, skilled and experienced. The mathematical representation of trends is a broad and exacting science. There is almost no more effective, efficient or optimal utilization of any financial representaion of markets than the mathematical representaion of trends. If Covel, Pring, Velez, Batchelor, Ramyar, Steenbarger or you ever got to see the mathematics related to trends it would make absolutely no difference at all. That is just the way it is. John Netto wrote a book that deals with trading to make money. 55 bucks when new. Now a used copy goes for up to 200 bucks. The book has trading information in it from a trader who knows how to trade. There is bullshit out there all over the place. And there are facts and science and coded software that defines things very accurately and correctly and in such a way that money can be extracted to the extent that the market offers. Some people can figure things out. Some people write about things that they have heard of. Some people cannot understand what others have figured out and there is little chance that any understanding can be found by anyone who is trying to understand a person explaining or reading something that the author has just heard about. Covel is missing just about everything on trends. You are worse off; you are missing what Covel is telling you he is missing.
Of course, the concept of trend or trend following has nothing to do with consecutive up or down days. Certainly after consecutive up or down days, markets have a tendency to pullback or bounce depending on which direction we are speaking about. The concept of trend is that prices are more likely (perhaps even just slightly so) to continue in the same general direction, but not necessarily on the next bar or even the next 20 bars. What a good trend follower does is identify good entries on pullbacks or bounces or even just renewed strength and always takes those entries in the direction of the predominant trend. That trend of course, could be different depending on your time frame. It is very important that new traders first learn to identify trends well prior to their first actual trade. Any trader who does not have this ability or denies the existence of trend, should go back to square one and learn how to trade properly. It is unbelievable that there are actually people who would otherwise define themselves as experienced traders who do not have a grasp on this concept.
Jack, I read the paper "Magic Numbers in the Dow" and passed it along to several colleagues for comment. Thank you for pointing it out to me.... What is your opinion of the paper? I deduce that you are supportive of the conclusions? regards, surf ps. john netto the poker player of netto numbers?? i believe he was/is a -contributor to a site i worked with---- happy to hear he is doing well!
i forgot to add that you can't summon trend as you can't conjure rain. most 'trendfollowers' are simply doing rain dances. doesn't mean rain or trend doesn't exist.
Trading Tribe Process. Through the process I've seen traders go from suicidal tendencies to trading transcendence. scary like... a personal exorcism.
ok, happy you explained....i had a completely different concept of what you meant at first. thanks, surf