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Mark and Tim,
Why would you want to trade against the trend? I'm assuming you mean
intraday trend, not daily trend. Trading against the daily trend is just
not smart. The swings are smaller on the reverse than they are in the
direction of the trend. The probabilities of a body in motion continuing in
that directions are overwhelming. Profits are small trading against the
trend while the risk of ruin goes through the roof.
I agree that dading an intraday trend however can be profitable.
Brian.
-----Original Message-----
From: Timothy Morge [mailto:tmorge@xxxxxxxxxxxxxxx]
Sent: Thursday, September 03, 1998 7:58 PM
To: Mark Brown
Cc: omega-list@xxxxxxxxxx
Subject: Re: Taking Losses
Mark Brown wrote:
>
>
>
> If you trade against the trend like most of my programs do, you can
document
> that if you apply not only good money management but a reversal : you will
> recover the loss you just incurred. The trick is to know your market and
> understand the probability of the reversal working, only a computer can do
> this. A human can not with great dependability feel the velocity and
> acceleration of market movement. A computer can keep track of all of
these
> factors with great accuracy.
>
> MB
Mark:
You have really caught my attention with your reply about systems that are
written to trade agaisnt the trend and their ability to analyze the
probability
of a reversal working. I'd like to hear more about what types of 'systems'
and
indicators you can use when building a system to trade against the trend and
how
you can tie in velocity and acceleration.
I know what's it like intuitively, and you're right: You have to really be
in
tune with a market and yourself to stop and reverse and recapture the
capital
from those losers on a regular basis. I'd love to hear even a little about
what
types of things a system 'looks' at to do this.
Best,
Tim Morge
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