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Mark Down wrote:
<<I prefer this method : I look at a chart and determine what the obvious
trend is. How do you know what the obvious trend is? Show a chart to any
10 year old and ask them what the general direction of the chart is UP or
Down.>>
I have to reply to this one because it's the ONLY thing Mark Down has
written that I agree with. The trend should be so obvious that it jumps up
and hits you on the nose. I know a guy who uses those itty bitty charts in
Investors' Business Daily. He glances at them (not looks, glances). It
takes him 1 second per chart. He just points and says: "Up", "Down", or
"Side". It works for him.
You can enter any clear trend with your favorite signal. MD likes to enter
against the trend and quickly reverse, if necessary. I don't like that. I
enter on the first extreme countertrend move - the first bar that's a strong
move against the trend, following trend identification. (What's a "strong"
move? You get to figure that out...)
Oh, yeah. While I'm at it, I'll give you a quick hint for identification of
"gambler indicators". Are there any user- defined or pre-programmed
parameters (other than boundary conditions)? If there are, it's a gambler
function.
Good trading,
The Omega Man
-----Original Message-----
From: Mark Brown <markbrown@xxxxxxxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>; Bob Fulks
<bfulks@xxxxxxxxxxxx>
Cc: flag@xxxxxxxxxxxx <flag@xxxxxxxxxxxx>
Date: Tuesday, October 13, 1998 10:34 AM
Subject: Re: Trend or No Trend
>One simple approach that is not too bad is to use two moving averages of
different lengths.
I prefer this method : I look at a chart and determine what the obvious
trend is. How do you know what the obvious trend is? Show a chart to any
10 year old and ask them what the general direction of the chart is UP or
Down. Once this is determined then I enter the market with a trade size
thats too big for my account in the opposite direction. Then hours, days
latter my broker calls me and either tells me I'm a genius or he wants more
money, at this time I know what the trend really is.
What I'm trying to get across is the following : If you can determine the
trend thane its too late to do you any good. You should either ignore the
trend or have a fail safe reversal in your system that automatically buys a
break in the direction of the trend. Until then you need to go about your
merry way trading chop ranges, or occupying your time in some other
constructive manor. If you dont you'll likely die of boredom waiting for
that trend that can only be identified after the fact.
MB
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