real trend followers are heavily capitalized and diversified across many non correlated markets. this allows one trade to bail the trend follower out of other trades that experience huge drawdowns. that is the theory behind the trend funds anyway.---the lesson is do not try this at home without sufficient capital resources to properly diversify and still earn greater than MM returns. i recently read a study that indicates that trend strategies like moving average crossovers, etc sometimes experience near 100% drawdowns-- trend following is the new cool term for BUY/SELL AND HOLD DIVERSIFIED MARKETS. does it work ? sometimes..... hank
I think that you two make an interesting tag team, given that one of you correctly does not believe in price prediction and forecasting, while the other engages in exactly that activity. Rather strange bedfellows, I'd say. (Hint: visit the surf report for all the forecasts and predictions you can eat. http://www.elitetrader.com/vb/showthread.php?s=&threadid=5285&highlight=surf+report )
That's an interesting question. I use this one and would like to hear some feedback (with reverb): Something is effectively random to the extent that its causes are not known in a way that makes it predictable.
This tread is looking more and more like at a contest for being the best living encyclopaedia. There is more discussion about the definition of words than anything else.
That's it Nickel, I didn't post to bug people, but to point to the utter pedantic babble juggling terminology many don't have the foggiest understanding about. In fact, it is known at least for 50 years that a random signal is, contrary to popular wisdom, not necessarily unpredictable as stated above. See Wiener Filtering. If people would study this a bit, it would clear up a lot of fuzziness and confusion about things like random signal, brownian motion, prediction. After this, people might become a bit more thoughtful instead of mouthing off foolishly. I thought it could help to make my views unambiguously clear about this. Be good, nononsense