all science is built upon the work of others. all researchers quote the work of others---some, like yourself, create terms and utilize unique language to make it appear that you have something original when, in fact, you do not. i am happy you liked the book--- its a classic! however, you are wrong about my motivations in this thread. i am looking for solutions to these seemingly contradictory premises and developing material for a future journalistic exploit. stay tuned. happy thanksgiving to you! surfer
Bit, neither buying highs or selling highs is a consistent strategy. Buying lows or selling sells is just as inconsistent. Surf's strategy of selling the tops in the Dow for the last several weeks is a perfect example. The markets are always trending if you know how to look at them incrementally. Oddi nailed it.
You are talking to an "other". All of my research is my own, 12 years of it. I've created custom terms to direct the individual toward specific functions of the critical process. That is something you wouldn't understand not having done any personal research into the markets on your own. "What one doesn't understand . . . they ridicule out of embarrassment and ignorance." Thomas Edison Aronson's book, that you recommended, sounded promising in the beginning. I couldn't understand why you would be touting a TA book though until I got it. It is, in my opinion, a statistical mess of variable data promoted by Niederhoffer. Niederhoffer isn't the end-all-be-all of market technicians. There are other schools of thought that make just as much sense if given the opportunity to blossom. You just take the "squash-first" attitude if it doesn't fall into your statistical comfort zone. If you are truly looking for solutions you would be open to new ideas and being a supposed journalist, do everything in your power to confirm or deny those ideas as being valid or bogus. You simple choose the "because I said so" approach because you wouldn't ever want to be shown as wrong in your original assumptions. That is truly sad especially coming from someone that could promote original thought.
i was talkin' strictly intraday. on this time frame it works pretty well on index futs to sell the highs and buy the lows: infact it is prolly the only simple approach that yields consistent results.
I own aronsons new book, and I have to agree with Prof. The only irony is that its still better than 90% of whats out there. The fact that its being promoted as giving results to over 6400 binary buy sell rules is a joke, because he spends no more than a chapter on describing the rules he uses in his study. If you have a budget for trading books say 100 for each month, then spending half of it on aronsons is not a bad bet. Its just that so few trading books discuss anything new or novel, that a book like aronsons can meet you half way. He goes into some detail about detrending and statistical concepts, but they dont ever discuss profitable trading rules that pass his criteria. A man who has found a gold mine is not going to put the map into a book and sell it, unless his mine is worthless. People don't give their treasures away.
Looks like intial entry and 10 more additions (say of 10 contracts each). The million dollars looks like a gross profit of a particular percentage. Would 100*(money out -money in)/ money in be an expression for that % gross profit? This kind of play is often recommended by many kinds of traders who speak at conventions. They are guys who use pullback, divergence or MA strategies. They seem to be making this kind of ROI or yield on capital. I listened to several of them recently and I knew they didn't have time to explain the soruce and app of capital part of it. Overal they did speak of the approach as a money management and risk/reward kind of thing. I do not think anyone would take this trade in this market because it doesn't make any money over time. People who trade trends probably draw a line to get the slope of the deal in terms of ROI and pass on this kind of slope. what the cut off for "large and persistent directional trades" is, varies from person to person and probably depends on how they commit capital over time. The money in compared to money out on this one leaves a lot to be desired. All leveraged trading has its rewards from the leveraging. Where a person plays in the set of leveraged markets goes back to the slope of the trending and moreso the frequency of the trades. In my book, I trade a trend by extracting all the potential of the trend. This one had 21 actions and I would just always be full in with the capital needed to make the million dollars you speak of. The equation I would use is the compound interest formula where I have 21 as the exponent and your appraoch uses 1 as the exponent. You add capital periodically while my intitial capital rides through 21 compoundings. Your average % gain is about twice my % gain in the compound interest formula. What is the effeect of leveraging in these two models? One has a remarkable advantage over the other. The mental effect of giving up potential profits 20 times in the period of the trend (inverted saucer) and adding the joy of having a contining poorer average cost babsis is in stark contrast compared to locking in profits by extracting nearly twice the profits in each short time period where pairs of trades (one long followed by one short) set the scene for another such play each time you add 10 more contracts. Trend trading make a lot of money when an optimizing strategy is at play as compared to the alternatives. Players who use volatility considerations to trend trading also exhibit more success for a given trend, since they weight their position according to the short term rate of making money in the trend. The first and second halves of the chart are interesting to compare: the first half is a long trend and the sceond half is a lateral trend. Half of the added money you put in went into each. One had a yeild and the other is just what a top and bottom picker stategy makes (less the many times he did it and you didn't do it)
mr hershey, you mention your book. i would like to acquire your book. please be so kind as to advise where it may be obtained. regards, surfer
Trends exist in every trading vehicle, and on every time frame. Whether the current trend is (or will be) of short, intermediate or long duration I cannot say in advance. However, one doesn't need to know how long the current trend plans to remain intact. One only needs to know when the current trend changes in order to bank profits. First, lets look at a trend. Wednesday's ES Chart trended quite nicely throughout the entire day. More importantly both the orange and blue (thick) trendlines were drawn in a whole day in advance. Ridiculous? Far from it. Scroll back a few posts from the above linked chart to locate Thursday's ES Chart and match up the trendlines for Wednesday. No magic beans, no voodoo, no 'hindsight' analysis. Clearly the trend continued from Tuesday on into Wednesday. Such an analysis remains unmistakably clear. Once a trader has determined the dominant trend direction, one simply need to wait for the signals in order to anticipate the trend change. The FTT (Failure to Traverse) marks the turning point of a trend, and more importantly, a change in trend direction. Whether the change in direction continues for a short, intermediate or long term doesn't matter. Once one locates the FTT, one simply enters and monitors for the sequences of events to unfold in an effort to determine the next action (hold, reverse or exit). How do you know which actions to take? The market tells you in advance. What follows an FTT repeats time and time again independent of trading vehicle and time frame monitored. After an FTT manifests, we have three possible results: 1. an FBO (Failure [of Price] to Break Out), 2. a BO ([Price] Break Out) or 3. another FTT (Failure of [Price] to Traverse). Which of these occurrences materializes also maters not, as the trader profits first from the price changes occurring between the FTT point and the resulting 'end effect' (FBO, BO, additional FTT). The trader profits second from the resulting actions taken (Exit, Hold or Reverse) once the 'end effects' of the FTT play out. 'Seeing' the markets in this manner causes a paradigm shift in one's trading. As a result, one begins to move from a "win / loss" mindset into a "profit a little / profit a lot" viewpoint. Additional tools exist (and have associated documentation throughout ET) to 'fine tune' the analysis. However, all one really needs is Price (and for those of us less skilled, Volume) in order to 'see' these trend changes in real time, and more importantly, to extract profits. I understand completely the almost instinctual response many traders have to even the suggestion that one can 'see' into the future and correctly anticipate future price direction. To understand the differences between prediction and anticipation one needs to simply alter the way in which one views, not only the markets in specific, but all problems in general. Allow yourself, for one brief moment, to observe a situation from a different point of view. Set aside, for the time being, preconceived notions and 'truths' to which all traders hold dear. Consider, for a second, that what i have posted here actually has merit. After all, you have seen it before Surf ... Around 2:50 PM Eastern Time Tuesday, marketsurfer asked for opinions on Future Market Direction (See Tuesday Chat Log for verification, or Surf can simply post here his recollection of the event). At that time, I answered "Down." Now, I wasn't simply flipping coins to arrive at an answer. An FTT had just materialized seconds beforehand (see first linked chart above), and as I have pointed out previously, only three things happen after an FTT. All three see price move away from the point at which the FTT occurred. How far price moves depends on other factors, but in all cases, the market provides some profit. How much of the profit a trader can extract depends on experience. I have no product to sell, nor any axe to grind. So, why not take the time to 'see' for yourself what actually is possible. One can find additional resources for learning these methods by reviewing Journal I and Journal II. Again, take a moment to consider and research what I have written here. Good Trading to you all, and Happy Thanksgiving to those traders in the USA. - Spydertrader