Did anyone check what happened? BTW: No one answer the above post, even there it has been there for 3 hours now!
If you think the problem with "trend following" is that too many people get in to the "trend" too late, then the obvious solution is to figure out how to identify a trend earlier. Duh. Obviously, that isn't easy or everyone would be doing it. But, it can be done, so long as you accept the fact that you will still be wrong 40% of the time.
Refreshing ... thanks. Also like your quote about market rewarding adaptability more than anything else. I totally agree it's mainly about using one's experience. Quickly and correctly identifying chart structure is key.
40%?? this portends to being correct 60% of the time. I know a few funds who would corner the market with a 51% hit ratio. None are correct on a 60% basis for any length of time.
"Market rewards adaptability". It also penalizes adaptability --- the guy who buys at the top and sells at the bottom is also adaptable! How about this statement instead "lack of adaptability is not rewarded in markets"?
The odds of that exact time being the right time to short are very low. Odds are the right move at that time was either to have stayed in a long you got into earlier or to be waiting for a valid short trigger. I trade what is more or less an hourly timeframe and ideally I make 1-2 trades per day. That means that 99.9% of the day, I'm either waiting or standing pat in my position, maybe moving a stop if conditions warrant doing so. Since entering a trade only takes a second to do, I only really "act" upon my read of the market for 1-2 seconds a day, on average. The rest of the time is spent updating calculations and making sure I know when to act.
Yes, I am right 60% of the time. I don't know what you consider "any length of time" but between paper and real trading, I've got almost 650 trades documented covering over two years of the SPY and the ES. Once I looked within the subsets of 100 to see if one or more were influencing the final percentage, but nope. Lowest it went was something near 51-52% and it went as high as 67-68%. So, there is some fluctuation, but it's extremely steady. I'm extremely selective about my entry criteria and I only trade one setup, both long and short. That's all I need. We'll see in time if I end up cornering the market or not. I sure hope so.
Absolutely. I defy anyone to look at a long-term chart of whatever instrument they are trying to catch a major reversal (of course, they have to quantify "major"). Then, count all of the reversals that actually meet those criteria. Then, count all of the bars, candles, ticks, whatever, from the first reversal to the last reversal on the chart. Then, divide the number of bars, candles, ticks, whatever, that had reversals that meet your criteria by the total number of bars, candles, ticks, whatever. You will find that your odds are better of finding a needle in a haystack. Once I realized that, I never tried to consciously capture a "major reversal" again. Ironically, now I catch a good portion of them almost every time they happen because my methodology essentially forces me into the market in the early stages of big moves. So, problem solved. Over the past couple months, as price swings are getting a little larger, I've caught like 3 20+ point ES moves, which are big relative to my timeframe, and on none of the entries did I think "Oh man this is going to be a big move", it just turned out that way.