Trend Following dying?

MohdSalleh · Feb 18, 2010

Quote from jack hershey:

Trend is a scientific element in trading when using the Pool Extraction Paradigm where PEP is the foundation of what I do.

Volume leads price in trends as stated in the HS and its PM.

My definition of trend, therefore is simple, precise (exact) and of very high utility.

Trend expresses the sentiment of an instrument in a market at all times.

That is 13 words and a very clear defined high utilty definition.

Trend makes it possible on any trading fractal to always know the correct market side of two possible sides (this has very high utility and precision).

Implementing the use of trend as a foundation is merely a mechanical process that results from the application of logic.

There is a chapter in Covel (page 255 ,etc.) which is very appropriate for most of the posters in this thread. It is entitled "Trend Following Confusion Reigns".

I do not follow trends. I use trends to trade.

Trends are seminal and their synthesis from the granularity of any market is a flawless construct without noise or anomaly.

All money is made in partnership with the market. The market tells you its sentiment and you use it to make the market's offer through the RTH's.

I have no axe to grind nor do I judge the views or opinions of others on this matter. As you say, I do what I do. PEP is deductively derived and it and its applications are complete systems of highest utility for extracting the market's offer.

Yesterday, the 25 trades using "trending" were the real deal for me in how I partner with the market to take its offer according the segments of profit that are determined by trend and the sentiment that trend represents.

Through volume leading price, the sentiment (trend) of the market is always known.

One of the unique third party aspects of the high utility of PEP and its applications using trend as the foundation is the SEC multi-year effort with regard to the application. You can ask any poster in ET if and when he was cited over and over for "insider trading" and exactly what the consequence was.

I could use the same words to describe the SEC that people in this thread, who lack a means of thinking about things unfamiliar, direct at the charts they observe. It was bizzare to be cited over and over for doing illegal trading whose profile duplicated insider trading by using trend analysis.

The key consideration of trend analysis is when analysis happens. It is a leading analytical effort relative to price action. This is unknown to most people who view "what I do". They, for whatever reason believe I think as they do. I don't. Larry Harris explains all of this in his seminal book. They are unfamiliar with the box I am squashed into, apparently. There is nothing wrong with being ignorant.

I find it to be very rational to use trend analysis as a parasitic tool for front running smart money. The commentators here find it bizarre. I find it bizarre that the SEC had to be straightened out over and over until they got it straight that there were parasitic traders who could front run smart money using trend analysis.

The conclusion that can be made about trend analysis relative to its efficiency and effectiveness is that 135 observable elements depict the minimum cycle order for one cycle where five nested fractal levels are involved. Certainly sub loops occur and the fact that they are present is known in advance. and does not detract from the money velocity of the continuing extraction going on all of the time.

What happens to ignorant people is they either choose to become informed or they continue their ignorance by choice. For me, there is no personal effect. For them, they always get the consequences of their choice. there is a myth in their culture. It goes like this: "If you tell others what you do, then it won't work anymore". That may be true for inductive mthods, but it is a myth for deductively derived approaches.

To make money a person has to be on the correct side of the market. Trend defines the correct side as an expression of market sentiment. So I chose an HS and its PM to always have the sentiment defined by trend.

This approach is unique in the world according to the literature. as has been stated there is nothing new, apparently. What is not apparent as yet is what it means to choose the correct PM or its HS.

You can see that no one uses anything but probabilities to trade. This mistake is very apparent by looking at the results.

Not making the mistake is a necessity to be able to take the market's offer all the time.

I view the markets as a left/right deal instead of up/down. I also do not do entry/exit trading. I do hold/reversal trading. It is a mistake to do it any other way.

What is it like to use logic for trading? Everything is certain. The routine of trading (MADA) is NOT gambling oriented as is the CW OODA orientation.

Yesterday, the market was blamed for a lot of things by a lot of people. I posted the BO's of the trends that occurred as an alternative.

Most people are adults and have personalities and character. They got the way they are by their cultural and educational efforts. The CW of the financial industry is what you see in the choices and behavior of these people. they have a measuring stick for everything financial, they think. Too bad that it cannot be used to measure anything outside of the CW realm.

ET has a putrid affliction that I get to put up with daily. The set of OCD detractors on ET are almost as rabid as the people using the word bizarre here. As a rational person I pass this off as part of the right of membership. I cannot expect the moderators to understand the science of trading and its breadth. Detractors are allowed to do what they do, since there is no capability to deal with it. If you can't define trend or know what it is, as Covel proved, it is okay to post and/or be published.

Volume proves the two orthogonal conditions of trend in a leading manner. Price lags volume so it is a consequence of the logic of markets. The orthogonal natue of the market condition is proven by choosing the proper market measure.

Two variables give two conditions that are NOT opposites. What could have greater utility than two orthogonal conditions?

Most people do not recognize how advances and retraces in trends work or when they are occurring. This being obscured causes the major mental condition of people; this condition is acknowledged in all research and studies: fear, anxiety and anger. Any CW oriented trader can explain it quite well since it is the continuing experience.

Also look at the occurrence of retraces and reversals. They are immediately distinguishable in trend analysis. Most people are unable to distinguish them as different until well after the fact.

The HS is based on trend and that is why "trending" is used in each hypothesis. By taking the two hypotheses together and then adding their parametric measure, you have the precise definition, in mathematical terms, of trend. I began to use this over 53 years ago.

By measuring trends using binary vectors, you always know that you know to hold or reverse. It is a cool way to make the paradigm serve the purpose of making profit segments in a timely manner.

All of this is in contrast to the bizarre concept of "edges". LOL...

From the programming and ATS point of view, it is very convenient and un-complex to use logic to trade. Boolean Algebra always expresses certainty. Since the market can be measured using binary vectors, everything falls into place quite quickly.

The years I spent in theoretical physics with staff from the Manhattan Project educating me, proved conclusively to me that there was no market application of the associated maths. People who worked that turf in that way were just part of sales and marketing pitches to get and retain clients. If Ms Born had been able to operate and get past Greenspan, who later said she was on the ball, we would not be where we are going today. Too bad. Ignorance rules.
More...

how is it possible you can type so many words during the trading day?

Rodney King · Feb 18, 2010

Quote from jack hershey:

This thread was started by a vendor in violation of the rules
More...

I should probably know this but I don't -- what's Mr Jez vending?

FattBurger · Feb 18, 2010

Quote from Scataphagos:

There are 2 kinds of markets... Trend and Chop.

Most investors and managers have a strong bias for one and therefor don't do well with the other.

The fact is now and has always been... to be consistently good, you have to be able to recognize both and trade them reasonably well. (Or, make lots of $$ during "your" kind of market and not lose too much in the other.)
More...

You are correct.

Kedwards · Feb 18, 2010

Jack Hershey,

appreciate the charts but, where exactly are the entries and exits? I look at the Price/Volume Relationship thread at TradersLab and no one ever posts an entry/exit??

jack hershey · Feb 18, 2010

Quote from MohdSalleh:

how is it possible you can type so many words during the trading day?
More...

I'll ask my dragon 9.

Did you notice no typos and good punctutation. Its a Dragon 9 thingy.

Do you have a software that reads posts to you. I bet you don't.

The charts are made automatically too by voice instructions. Boo! Means draw an RTL.

BOO! HOO! means do a wash trade after a time out.

Dumb fuck! means put you on ignore again. lol....

Could you please put me on ignore. Posting to you is a waste of time.

sonyericson · Feb 18, 2010

bizzare! jack Hershey, do you have any proof that the SEC cited you for anything? Post it, otherwise its simply another delusion.

Sony

Trader666 · Feb 18, 2010

Really Jack? Then why doesn't your model of the price, volume relationship have an edge?

I tested buying YOUR "0 to 7 turn" (per page 8 of your paper) on 1000 stocks from 2000 to 2005 -- a total of 5000 stock-years -- using spydertrader's code for the scoring and exiting 5 days later and got the equity curve below.

And why were you on the wrong side of the market here?

Listen to Jack crow about this trade before it went bad (mp3 file at link):
http://www.mediafire.com/?0ielxnmeiro

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2023032>

And what about your failed September 1st prediction?

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2704243>

And this one?

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2656562>

Quote from jack hershey:

Through volume leading price, the sentiment (trend) of the market is always known.
More...

MohdSalleh · Feb 18, 2010

Quote from jack hershey:

I'll ask my dragon 9.

Did you notice no typos and good punctutation. Its a Dragon 9 thingy.

Do you have a software that reads posts to you. I bet you don't.

The charts are made automatically too by voice instructions. Boo! Means draw an RTL.

BOO! HOO! means do a wash trade after a time out.

Dumb fuck! means put you on ignore again. lol....

Could you please put me on ignore. Posting to you is a waste of time.
More...

why so angry, jack? i wont put you on ignore, i still love you

ProfLogic · Feb 18, 2010

Quote from jack hershey:

Trend is a scientific element in trading when using the Pool Extraction Paradigm where PEP is the foundation of what I do.

Volume leads price in trends as stated in the HS and its PM.

My definition of trend, therefore is simple, precise (exact) and of very high utility.

Trend expresses the sentiment of an instrument in a market at all times.

That is 13 words and a very clear defined high utilty definition.

Trend makes it possible on any trading fractal to always know the correct market side of two possible sides (this has very high utility and precision).

Implementing the use of trend as a foundation is merely a mechanical process that results from the application of logic.

There is a chapter in Covel (page 255 ,etc.) which is very appropriate for most of the posters in this thread. It is entitled "Trend Following Confusion Reigns".

I do not follow trends. I use trends to trade.

Trends are seminal and their synthesis from the granularity of any market is a flawless construct without noise or anomaly.

All money is made in partnership with the market. The market tells you its sentiment and you use it to make the market's offer through the RTH's.

I have no axe to grind nor do I judge the views or opinions of others on this matter. As you say, I do what I do. PEP is deductively derived and it and its applications are complete systems of highest utility for extracting the market's offer.

Yesterday, the 25 trades using "trending" were the real deal for me in how I partner with the market to take its offer according the segments of profit that are determined by trend and the sentiment that trend represents.

Through volume leading price, the sentiment (trend) of the market is always known.

One of the unique third party aspects of the high utility of PEP and its applications using trend as the foundation is the SEC multi-year effort with regard to the application. You can ask any poster in ET if and when he was cited over and over for "insider trading" and exactly what the consequence was.

I could use the same words to describe the SEC that people in this thread, who lack a means of thinking about things unfamiliar, direct at the charts they observe. It was bizzare to be cited over and over for doing illegal trading whose profile duplicated insider trading by using trend analysis.

The key consideration of trend analysis is when analysis happens. It is a leading analytical effort relative to price action. This is unknown to most people who view "what I do". They, for whatever reason believe I think as they do. I don't. Larry Harris explains all of this in his seminal book. They are unfamiliar with the box I am squashed into, apparently. There is nothing wrong with being ignorant.

I find it to be very rational to use trend analysis as a parasitic tool for front running smart money. The commentators here find it bizarre. I find it bizarre that the SEC had to be straightened out over and over until they got it straight that there were parasitic traders who could front run smart money using trend analysis.

The conclusion that can be made about trend analysis relative to its efficiency and effectiveness is that 135 observable elements depict the minimum cycle order for one cycle where five nested fractal levels are involved. Certainly sub loops occur and the fact that they are present is known in advance. and does not detract from the money velocity of the continuing extraction going on all of the time.

What happens to ignorant people is they either choose to become informed or they continue their ignorance by choice. For me, there is no personal effect. For them, they always get the consequences of their choice. there is a myth in their culture. It goes like this: "If you tell others what you do, then it won't work anymore". That may be true for inductive mthods, but it is a myth for deductively derived approaches.

To make money a person has to be on the correct side of the market. Trend defines the correct side as an expression of market sentiment. So I chose an HS and its PM to always have the sentiment defined by trend.

This approach is unique in the world according to the literature. as has been stated there is nothing new, apparently. What is not apparent as yet is what it means to choose the correct PM or its HS.

You can see that no one uses anything but probabilities to trade. This mistake is very apparent by looking at the results.

Not making the mistake is a necessity to be able to take the market's offer all the time.

I view the markets as a left/right deal instead of up/down. I also do not do entry/exit trading. I do hold/reversal trading. It is a mistake to do it any other way.

What is it like to use logic for trading? Everything is certain. The routine of trading (MADA) is NOT gambling oriented as is the CW OODA orientation.

Yesterday, the market was blamed for a lot of things by a lot of people. I posted the BO's of the trends that occurred as an alternative.

Most people are adults and have personalities and character. They got the way they are by their cultural and educational efforts. The CW of the financial industry is what you see in the choices and behavior of these people. they have a measuring stick for everything financial, they think. Too bad that it cannot be used to measure anything outside of the CW realm.

ET has a putrid affliction that I get to put up with daily. The set of OCD detractors on ET are almost as rabid as the people using the word bizarre here. As a rational person I pass this off as part of the right of membership. I cannot expect the moderators to understand the science of trading and its breadth. Detractors are allowed to do what they do, since there is no capability to deal with it. If you can't define trend or know what it is, as Covel proved, it is okay to post and/or be published.

Volume proves the two orthogonal conditions of trend in a leading manner. Price lags volume so it is a consequence of the logic of markets. The orthogonal natue of the market condition is proven by choosing the proper market measure.

Two variables give two conditions that are NOT opposites. What could have greater utility than two orthogonal conditions?

Most people do not recognize how advances and retraces in trends work or when they are occurring. This being obscured causes the major mental condition of people; this condition is acknowledged in all research and studies: fear, anxiety and anger. Any CW oriented trader can explain it quite well since it is the continuing experience.

Also look at the occurrence of retraces and reversals. They are immediately distinguishable in trend analysis. Most people are unable to distinguish them as different until well after the fact.

The HS is based on trend and that is why "trending" is used in each hypothesis. By taking the two hypotheses together and then adding their parametric measure, you have the precise definition, in mathematical terms, of trend. I began to use this over 53 years ago.

By measuring trends using binary vectors, you always know that you know to hold or reverse. It is a cool way to make the paradigm serve the purpose of making profit segments in a timely manner.

All of this is in contrast to the bizarre concept of "edges". LOL...

From the programming and ATS point of view, it is very convenient and un-complex to use logic to trade. Boolean Algebra always expresses certainty. Since the market can be measured using binary vectors, everything falls into place quite quickly.

The years I spent in theoretical physics with staff from the Manhattan Project educating me, proved conclusively to me that there was no market application of the associated maths. People who worked that turf in that way were just part of sales and marketing pitches to get and retain clients. If Ms Born had been able to operate and get past Greenspan, who later said she was on the ball, we would not be where we are going today. Too bad. Ignorance rules.
More...

I responded to this post but it was lost because the combined post was too long. I'll respond again later.

JezLiberty · Feb 18, 2010

Quote from Rodney King:

I should probably know this but I don't -- what's Mr Jez vending?
More...

Thank you for asking the question Rodney. I was going to ask exactly the same thing to Mr Jack Hershey???...

(Just to be clear, the answer is nothing...)

ok I have a blog that I use as my "thoughts/research" repository and I linked to a page of it (which, by the way, I believe could be useful to other traders interested in Trend Following)

Anyway, I was hoping for some sort of discussion on the nature of market prices distribution and its possbile evolution/changes

For the record, I believe that the 2 main characteristics of price distribution which explain the returns of Trend Followers are as follows:
- Kurtosis (fat-tails)
- Serial Correlation (Autocorrelation) at extreme price levels

The former explains why letting your winners run and cutting your losers short work.
The latter explains why following a trend after it has started (ie when price is already at an extreme) provides an edge compared to random entries.

These are 2 aspects implying that market distributions are non-normal and prices exhibit Fractional Brownian motion characteristics.
If the markets were to "finally" (sarcastic tone of frustrated academics here ) conform to the models and theories and become fully random with normal price distributions, I believe that trading, including Trend Following could not provide any viable long-term opportunity.

The question is: could it be that markets are moving towards a closer fit of the theoritical models? (and therefore eroding Trend Following advantage).

I think not but there is always this nagging doubt