|
PureBytes Links
Trading Reference Links
|
CheeVid,
There are a few reasons for the Long term Success of Trend Following
systems:
- Long Term Trend Following is a harder way to trade for our egos.
- Short term hit & run trading is more gratifying for both our egos
and our brokers - in the short run. It is
therefore more appealing to most traders.
- Long Term Trend Following requires patience and discipline.
- Most traders - myself included - feel they must be doing something
all the time ie trading. They tend to over trade
Jesse Livermore said he made the most money by sitting on his hands.
In trading to be successful we have to do what the crowd doesn't. It is
easy to be short term focussed - the hardest thing is to wait and be
patient. That is why long term trend following is so successful in the
long run. It is also less sensitive to brokerage and slippage costs -
which helps.
Regards
----------
> From: CheeVid Chong <cheevid@xxxxxxxx>
> To: REALTRADERS@xxxxxxxxxxxxxx
> Subject: Long term trend following? Short term hit and run?
> Date: Friday, 4 July 1997 11:22
>
> I am quite new to realtraders and don't know whether there has been any
> such discussion before. It seems to me that trend following method, be
> it long term or short term, is definitely superior than short term hit
> and run strategies. If I am not mistaken, most if not all top ten CTAs
> uses some kind of trend following methods (and the notorious Turtle). If
> we look at the most recent issue of future magazine, they have a list of
> the top ten trading system and most of them are trend following too.
>
> There are basically two categories of trading edge. Low accuracy but
> large profit, or high accuracy but small profit. The first is the
> characteristic of long term trend following method, while the second one
> is basically short term hit and run.
>
> If trading edge can be achieved both ways, why does long term trend
> following generally outperform short term hit and run?
>
> CheeVid
>
|