"SECOND LAW: Trends that run counter to the next larger timeframe tend to be abortive." (originally found here ---> http://www.trend-dynamics.com/TD_Laws.htm) I have friends who actually strongly believed in this. I mean if this is true, everyone will be fading trends that run counter to a larger timeframe, everyone will be making money, all instituitions will be arbing this to death and the market will crash. Its like basic economics man. But why do people still argue strongly for this "law"??
And such quality, like these excerpts... - ...We've spent a decade distilling this experience into a core gorup of trading principles... It will obviously take a little longer for them to learn to spell and proof read their website. And then this... - ...you'll find in a Trend Dynamics trading course is based on one or more of these twelve trading principles listed below: They then go on to list 14 principles instead of 12, and these are numberd 1 to 12, then 14 to 15! Guess they also teach numeracy and attention to detail. LOL
I'm convinced that a good half of the trading advice of the clearly idiotic variety is intentional disinformation. There's just too much of it to all be sincerely believed; it would be like 20% of the population being flat-earthers. So a lot of clowns are intentionally polluting the information pool to disable their "competition". Seems like a stupid strategy in the long run but I put nothing past greed-obsessed bastards and their rationalizations for "the ends justify the means".
What I found amusing is that the words "law" and "tend" were in the same sentence. Regardless, I have found that there are very few "laws" pertaining to price action in my travels. Perhaps there are a few guiding principles, but nothing more "legislative" than that.
I agree with that law, especially since it includes the word "tend". Since I'm not in the mood for wasting my time upon writing a longer reply, here's the right link in case you're interested into why that Ãs the case: http://www.hardrightedge.com/wizard/ss1.htm And if you're interested in why this isn't/can't be arbed to death, here's another one: http://en.wikipedia.org/wiki/Evolutionary_stable_strategy
If shorter term trend really "tend" (higher than 50% chance) of adjusting itself to an opposing longer term trend...wouldn't it become THE holy grail? Large fortunes could be made fading short term trend. From my research (which may or may not be adequate T_T), short term trends has about 50% chance of adjusting to a trend on the higher timeframe. The other 50% of the time the trend on the higher timeframe either fade out or reversed.
Look, Trend Dynamics is essentially a manual that discusses general market tendencies. Its not unlike stuff written by Livermore, Wyckoff, etc, etc. Guys like yourself tend to take everything so literally and if you find one instance that refutes the theory, you go nuts.
That's wonderful. However, you should know that actual "laws," be they legislative or physical, are a bit more absolute than mere "tendencies." Of course, "law" sounds so much more impressive, convincing and certain. It is a far better attention-getter. And people readying themselves to sell you something need to get your attention. Don't you think?
IMO, it actually is one of my personal holy grails. It takes some time to learn it, but once you've understood the strategies of the market participants in their respective timeframes and once you've learnt to observe them all simultaneously, and once you've understood the major importance of money management, chances are good you're ahead of the market. Open a demo account with refco and use their free strategem java-based trading software. Then I suggest you follow one of the big currency pairs in 10, 15, 60, 120 4h, 8h & daily charts simultaneously and also chart all the time frames. You'll be amazed about how much you can predict shorter time frames through higher ones. The rest is money management and discipline. I dare to say that that's not a result of your research, but rather of your subjective opinion. Edit: Even if we assume that your numbers are correct, then it's till possible to make profit by cutting your losses short and letting your profits run. One of the best traders in the world mentioned in an interview that he closes 70% of his trades with a loss. And still, his risk to reward ratio is ~15.