Markets aren't traded on time they are traded in shares or contracts. The bars per minute or hour are irrelevant. The fable is the accuracy associated with the inconsistent way individuals view the markets using variable environments.
That was a response? Mr. Covel, though calling himself a Trend Follower isn't one, why? Because he can not, admittedly, define the Trend of any market on any chart. In order for one to follow a Trend one first MUST have the ability to specifically define it.
I wasn't responding to the details of the 2 minute snippet, particularly. Primarily, I was addressing your commentary and inquiry about the Covel snippet. His editing deleted your statement, unfortunately. So it goes. Covel referred to 5 Q's. they are Q's relative to a undefined (in the book) trend following system. The TFS Determines: 1. what market 2. how much 3. when in 4. when out of a loser. 5. when out of a winner. For me the answers for a TFS are: 1. All markets, any fractal. 2. 10% of the daily volume for each instrument in the market 3. All the time during RTH's. 4. N/A 5. At the end of each trending leg on that fractal starting with level 3 channels, going to level 3 and 2 channels and finally, at expert levels 3, 2 and 1. The answer to 1 is the test of whether a TFS works. The difference between random performance and the TFS is determined by monte Carlo. For PVT we used 400,000 runs. lol. For 2, the limit is determined by the % that has no statisitically significant effect on the market traded. The answer to 3 is prima facia. To make money you have to be in the market, on the right side and in all the time price is changing. 4. is an unecesary question since item 3 oputs the traders as far away from losses as it possible. All of this is foreign to Covel. As yet he, pring and abunch of others I typed in this tread do not even know that trends over lap. Obviously, the TFS uses the knowledge, skills and experience of the user to determine how effectively, efficient and optimally the 1, 2, 3, and 5 are handled. It takes a while to "see" manually or automatically what is going on during RTH's. There is but one way to construct a TFS logically. Covel etr all have never run into such a critcal thinking situation that they could observe as yet. that is the way it is and that it the way compilers of infomation pile up stuff and bundle it into books and chapters. Page 220 is very humorous. What would be the read if a rational critical thought process were used to present Trading Systems? the only way it is going to appear on the blog mentioned is as a quote from someone other than Covel or a screen play scriptwriter.
Marketsurfer, please do the following for your own sake. 1) Define what longer term means to you 2) Learn to define longer term trend. 3)Trade in that direction only. Thank you for your time.
What makes you think Wall Street 'may figure it out in a few years' (paraphrased), if they haven't already? Or maybe a good number have and CO serves as useful paradigm for control and misdirection. Similar to organized religion.
Most sharp people here at ET understand that MS is making a joke when he slams trend following. I am fairly certain that trend following is indeed what he does and the trades posted here at ET are actually the opposite of the trades that are being made by MS. --I am not certain what is being gained from this strategy, but hat's off, he has suckered several folks in.
I don't think so. He is an easy guy to "read". Furthermore, he fails to understand most of what financial professionals write. You can take anyone on ET and do a histogram of their knowledge skills and experience. Lets say you also have a set of milestones and branches that are commonly taken. The patterns turn out to follow just a range (several) of specific pathways to either success or to the point of no return then failure. Once you peg where a person is, it is much easier to understand why that person does not accept or cannot accept input on particular topics. DB, for example could only use right trendlines. He Traded only BO's of trendlines as a consequence. Most people still do: Pring, Velez, Turner, etc. Once a person sees trendlines there is no assurance that they will go further. Before a person understands trendlines they do a class of edges. After they understand trendlines they do another class of edges or begin to actually trade the markets. Here you also get to see a person who is not differentiating where the market is in terms of a general context. a person cannot trade in marketsurfer's style this year although that style could be used up to Novembr 2006. If you want to see an example of this with another similar person check out nitro going through the latter half of 2006 until his demise. I admit that nitro was using significant money (relative to his capital) and marketsurfer uses other means of making money rather than trading for a living. Neither had to do partial fills relative to the market's capacity and both were entry/exit level traders. At some point a trader can recognize to enter on the right trend line and exit on the left trend line. He may also see when trends begin and end at some point. This is neither on the right or left trend line. Those exiting on the left trend line are a little premature but they make the money possible trading trends. The next levels up in skills and knowledge go way past just trading the trend. The signals used on these levels are not part of MS's quiver in any way. Here is where people get to understand and trade from the beginning of a trend and they usually also trade within the trend because the opportunity is there. Multi trend analysis is where its at. Deciding how many concurrent trends to examine is a very important consideration. So far, MS has spent a very long time convincing himself that he is unable to commence the learning process related to trends. most all of what he hangs onto is other's similar failures to grasp how markets move and how market movement may be characterized. It takes a great deal to play the game of humorously and consistently fooling those who may be able to observe the markets. MS does occassionally get into disagreements with some people. This is a prima facia measure of his level of understanding with respect to the disagreement. He is unable to argue rationally on the positions he sometimes pronounces he is stuck with. Here is a what if; look at it from the viewpoint of the consequences: 1. What if MS used a rule to geometrically draw the right boundary of price movement. (This is beyond drawing the left boundary (as Joepepper2001 does occasionally). 2. What if MS determined that there was an edge available in doing this. 3. What if MS detemined how to improve the "take" in using the respective edge. 4. What if MS recongnized that the psychology of price movement also afforded him the use of a second geometric boundary of price (the left trendline). 5. What if MS then saw that price traversed these boundaries 6. What if MS saw that he could use 1 through 4 to trade the traverses of 4. 7. What if MS found out where a trend bagan from this geometric effort. 8 . What if MS reapplied this again on a finer level. Note the consequences to any person who has any of a range of math skills. Note the consequences if the person does not have any math skills to speak of. So here, I could insert the various math skill sets for about 8 skill sets. Include the three most common divisions of the quant stuff. Where is MS in this stuff? MS doesn't do math. were he to do math, he might be able to play as you suggest. It is not possible. In general, the math applied to the markets doesn't have much of a yield in trems of differentiating a wide range of performances. The Thunderdog range is the norm so far. While MS doesn't make any money, MS only loses money in the T dog range. Nitro wiped (blew out) on the other hand. One thing is true, however. Doing the what if's does make the point that there is money available all of the time, and where someone to approach the opportunity rationally, it would be possible to take waht is offered. So far that is not happening as far as public knowledge is concerned. TV should run a sit com on a group of people (Friends, or Sienfeld or talking heads money guys like CNBC or Bloomberg) where one of them in the group is like Tim Borge, Geoff Wong, John Netto, Jon Anderson, etc. and all the others are like the contemporary norm. Each week several people do what is commonly done and the odd ball guy does what is offered, all as a sit com, mind you. It would be neat to use a bar like one in Chicago on the loop and week after week have the group do the bar scene with one person just laying it out to the others and, then, humorously, the others continually sticking to their guns saying that it wasn't done. MS is the inspiriation. A Boiler Room movie could be done where two outfits were operating as hedge funds: one doing what is offered and the other doing the "sales" approach. Lots of humor day after day..