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No offense man, but you must be joking. I'm not trying to give you a hard
time I just want to understand your position. That's a compliment.
I think what it boils down to is definition of trend. If the market's not
trending that strongly then the moves up/down are wider than when a market
is moving strongly. I could see a system like the one you say you prefer
trading in markets that may trend one way for awhile then trend back almost
has much. Anything less, IMO, just aint' worth it.
Take the CD the past month. It didn't have bounces it had dribbles. It had
sideways movement then more down. Thanks to the DX problemo it found
support and made a healthy bounce. How much was I going to loose trying to
pick a bottom in that market? Tons. How much money could I have made
buying even the bottom tick on the dribbles back up. Practically none. Are
you saying that you would prefer to fade a market like that than trade in
the direction of the trend?
What about AD? By the time you got any semblance a bounce you were down a
ton and you had missed all that downside. Why even bother trying to pick
bottoms? There's no money there.
Take bonds when they trend like they are now. Yeah you can make money
thanks to the volatility in that market but unless you're good at
CONSISTENTLY picking tops, fading moves in a market like this leads to
larger draw downs and higher probability of the market not moving back to
your short entry. All this equates to a waste of time that margin money is
locked up.
You say you like to trade with the probabilites but I know that the
probablities don't favor a trade against the trend in markets like these.
Are these the types of markets you're referring to?
If not, then can you characterize a market you like trading this way.
All you have to do is look at a chart to know that when a market is moving
up or down, the swings in the direction of the trend are longer. As a
software developer, I know I don't need a computer for that.
Good Trading,
Brian.
-----Original Message-----
From: Mark Brown [mailto:markbrown@xxxxxxxxxxxxx]
Sent: Thursday, September 03, 1998 11:04 PM
To: Omega List
Subject: Re: Taking Losses
>Mark and Tim,
>
>Why would you want to trade against the trend? I'm assuming you mean
intraday trend, not daily trend.
I mean both.
>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.
Ok whatever. I have found the opposite to be true. I didn't read it in a
book some where, I proved it on a computer. I would have happily done
whatever the computer showed me to be the most profitable way to trade. I
have no opinions of my own when it comes to trading, I want to make money
thats it. I have a hardware addiction to finance. I know there are others
on the list that would like to velocity and acceleration as it is connected
to estimating the probabilities of a successful reversal of a trade. I
would direct you to a discussion that I have been target of by a French man
on yet another list. There you would find elementary babbling of a little
know math theory called Browian motion, which I have been purported to be
connected to in an entertaining way (clap, clap). I would suggest that the
use of Browian motion is at the least incomprehensible of many traders and
certainly not understandable by academic. If you can dream you can get it,
to apply something that is known is not great. I believe that at least Val
Clancy here on the list is hot on the trail perhaps, the mere use of such
advanced mathematical programs such as MatLab will stimulate one to
understand the futility of common methods of trading. There is such a fine
narrow blend of Science and Brute force needed to conquer the markets that
it is at least a combination that is truly random. I was gearing up to
discus the advanced methods of acceleration and velocity but I now realize
that it would serve no purpose other than to frustrate me. I like this list
and I'm in no mode to fight much anymore much. I have found it disturbing
recently while I was adding contracts to build my perpetual real time data.
That I was now into the next year, and still have no clue of when I'll get a
y2000 patch or TS5. Where oh where are the Omega defenders now? All
busted and selling shoes after this recent big downturn? All those curve
fitted buy only systems with trailing stops falling apart now I guess?
MB
>I agree that fading an intraday trend however can be profitable.
>
>Brian.
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