you are not making any sense for the following reason: what you say is "true"--- however--you can't predict peoples emotions into the future based on past price movement--therefore the randomness of a coin flip is relevant based on your statement. you personally entering a trade, is it going to win, or lose? you don't know--is a coin flip going to be heads or tails-- you don't know based on the past flips. see what i mean? the coin flip analogy is relevent to a traders entry-- you make a decision to enter a trade, same decision is made to flip a coin--its the decision to enter or not to enter. yes, the public, by default, are trend followers--- and we all know what happens to most of the public --- if your greater fool theory held any water, buying new highs should work much more than it does--- why does every study that i have seen clearly indicate that the edge is in buying lows, not buying highs?? if trend trading made sense, buying new highs would work greater than 50% of the time, when in fact it works far less making trend trading an inferior strategy. see larry connors "how markets really work" for the actual stats. best, surfer
"what you say is "true"--- however--you can't predict peoples emotions into the future based on past price movement" yes, i can. and do. it;s how i make a living so don';t tell me it can't be done
I don't know the thing you trade ms but in mine ... 3 moves up does have a bearing. 3 moves suggests that it is most likely to return to the "mean" (and 4 more so). I (and judging by the return, many others) use this as an excellent point to exit my "trend following" position.
ok, kiwi. however, trend trading as described in the books, is buying new highs, or selling new lows--- not a mean reversion exiting strategy that you describe. surfer
It will if the trend continues. Trends don't automatically end just because you enter them. Some end, others don't. Trend followers are playing an odds game, just like casino owners. I have not seen those studies, and I don't look at price indexes to determine whether to buy or sell an individual security. Indices are made of many securities, and some will go in the opposite direction of the overall index trend in all time periods. Buy and hold is long-term trend following, and does not apply to, say, daily trend following. The bigger you are, the more inertia you have to overcome. The slowness of big mutual funds to change direction has nothing to do with small and nimble individual traders. As has been said, this is truly a false analogy. 1) We know the exact probability of coin flipping; we don't know the probability for trend following, except from back-testing. And that probability will be higly dependent on the particular trading strategy used. IOW, not all trend following methods are equal. 2) Coin flipping is random. Human behavior may be rational or irrational but it is never random. Show me the coin that shows the same yearly trend of the DJIA from the Depression to now and I'll show you a highly biased coin.
" trend trading is an odds game" please show me the statistics that indicate entering in the direction of a trend increases ones odds of success. they simply don't exist, to the best of my knowledge. if you know differently, please provide. best, surfer
-------------------------------------------------------------------------------- Quote from whitster: "what you say is "true"--- however--you can't predict peoples emotions into the future based on past price movement" yes, i can. and do. it;s how i make a living so don';t tell me it can't be done -------------------------------------------------------------------------------- "ok. i can't argue with seers and such. best, surfer" surfer. i trade futures for a living. it has to do with following order flow (IE PRICE) and making trades so, don't tell me it can't be done. i do it if it was random, like a coin, i couldn't