Some had computing knowledge in 70s, and it helped their TF trading. Anyone can have automation today. End result of that debate? TF is still just TF. People still people.
I am a daytrader but I checked the DD's in the S&P in 2000 and 2007. The conclusion is that if I would check 1 time every day the close of the day, I would never ever have taken this DD. I might have taken maybe 25 to 50% of the DD TF took. You don't need a crystal ball for that. I think the problem was that TF till 2000 were sure that DD would always be small. Watch the chart of the S&P. You never saw a DD like 2000 and 2007 in the period before 2000. From 1950 till 2000 it was almost straight upwards. TF presumed that it would always stay like this and they fell asleep. It was a false safety feeling. 2000 should have been a wake up call. It is also in the period after the 2000 crash that John Henry really got in trouble, which confirms my opinion.
But some Tf left the building, like John Henry. I am an adept from TF, I think it is the best way to trade no matter what timeframes you use. I use "trendfollowing" in daytrading. But i think the way TF is defined now is a little bit different from what its was in the 1970's. I think today you have to be more active, and smarter too.
1. Mentioning JWH in isolation doesn't make your point, for you ignore all other TFs. 2. TF is not about trading one market. Only applies to diversified portfolio. 3. DD is not new for TF strategy. The data does not back your contention. At least for TF traders trading diversified portfolios (commonly called managed futures or CTAs). DD has been with TF since the inception of the strategy, and not just small DDs.
I agree, as daytrader I see things too narrow. Too much from my position, and experience, as daytrader. I realize now that my "trendfollowing" has some of the same basic principles but is nevertheless quite different fromthe TF you are speaking about. John Henry left because his system did not work anymore. Watch his performance since 2000.
Your hero is in jail now. He has been arrested 5x in the last 2 years and his trading firm was banned by the Commodity Futures Trading Commission. He recently posted some videos before being locked up again: Those videos are brutally honest.
Fair enough, but bad performance doesn't necessarily imply system problems. I don't know, nor do you the specifics here. And unless JWH talks--doubt we will. It is worth pointing out that Merrill pulling their money in a DD was surely not helpful. I am curious his AUM Oct 08, and 08 in general as those were huge TF times.
Anyway, enough, i don't want to spend any more time on this thread (and i don't want to upset Baron!). Bye Mr Covel, see you around.