**** me... huge realisation about why trend followers survive longer...

He's saying wider stops, as normally used by trend followers, lead to longer survival.

On a related note I had a bit of a click moment myself after reading what you two mugs were saying about order flow in my TA fred. Makes sense to me now.
 
arabianights said:
So... what's my point? Simple. The unsuccessful trend followers will do so many less trades as they wait for confirmation of the trend, while the unsuccessful mean reverters, averagers, value players, whatever, will get to do a considerable lot more trades in the same time period.
Click to expand...

I have found the opposite to be true, with trend following you have to take a lot more risky signals otherwise you risk missing the move, your win rate is going to be less than 50%.

With counter trend trades you can be more patient with your entry and so your win rate gets to be >60%.

It is possible to be succesful with both trend and counter tren approaches, but i believe trend following is easier to pull off.
 
scose-no-doubt said:
He's saying wider stops, as normally used by trend followers, lead to longer survival.
Click to expand...

Well, that is pretty much the issue; if you trend trade euro with a 10 pip stop, you will hand a lot of money over unless you are really, really good with your entry (this is, of course, possible). But even if you use something more sensible like a 50 pip stop and entered near the top of yesterday's euro range, you'd be stopped out as a trend trader.
 
arabianights said:
...in pretty much efficent markets.

Earlier today friendly member Jack O'Clubs inspired me to go looking for roulette lulz... yup, there are thousands of threadds all over about people who think they have a system for roulette.
Click to expand...

I know of only two ways to win at roulette. One is illegal and one is improbable. And neither involves trend following.
 
arabianights said:
...in pretty much efficent markets.

Earlier today friendly member Jack O'Clubs inspired me to go looking for roulette lulz... yup, there are thousands of threadds all over about people who think they have a system for roulette.

Anyway, here's some "advice":




So... what's my point? Simple. The unsuccessful trend followers will do so many less trades as they wait for confirmation of the trend, while the unsuccessful mean reverters, averagers, value players, whatever, will get to do a considerable lot more trades in the same time period.

Therefore whenever one looks at the population of "successful" outright traders one will see more trend followers. It will be fallacious to conclude this is the best way of trading... but it's what you will conclude... on the markets as much as the roulette wheel!
Click to expand...

there are people doing "systems" on roulette :-0

do you think thats why there are so many plonkers trading fx on like metatrader4 with stupid indicators and stuff as well? like its just as easy to "trade" roulette as "trade" forex and if there are plonkers like that in roulette then there should be same in forex yeah?
 
section bets + wheel bias (un/poorly trued) = edge. Seen it in action. 1 table loved number 12.

other than that wtf is a roullete system?
 
DashRiprock said:
there are people doing "systems" on roulette :-0

do you think thats why there are so many plonkers trading fx on like metatrader4 with stupid indicators and stuff as well? like its just as easy to "trade" roulette as "trade" forex and if there are plonkers like that in roulette then there should be same in forex yeah?
Click to expand...

I once met a guy who told me you can win on roulette by tripling up after each losing bet, this a variation of the 'double up after each losing bet', which yields just your original small bet when you eventually win. Obviously there are bet limits to stop you doing this anyway, but if there werent he believed this would be sure fire way of becoming rich.
 
HowardCohodas said:
I know of only two ways to win at roulette. One is illegal and one is improbable. And neither involves trend following.
Click to expand...

Ironic that you should pop up here with such utter certainty that roulette systems can't win Howard. This is the precisely the certainty that experienced people on these boards have that you can't win in the long run writing options. Your progress so far is exactly analagous to someone who believes they've discovered a winning roulette system and are yet to experience the inevitable run of 'bad luck'.

As an aside, once again Howard you've displayed a perfect ability to utterly misunderstand the point being made. This isn't a thread about whether you can win at roulette, it's a thread about the behaviourial biases in trend following systems and whether they allow mugs to win for longer.
 
donaldduke said:
I once met a guy who told me you can win on roulette by tripling up after each losing bet, this a variation of the 'double up after each losing bet', which yields just £1 when you eventually win. Obviously there are bet limits to stop you doing this anyway, but if there werent he believed this would be sure fire way of becoming rich.
Click to expand...
e
even with no bet limits hed run out of money eventually

"the roulette wheel can remain a discrete random variable longer than you can remain solvent" LOL
 
Jack o'Clubs said:
Ironic that you should pop up here with such utter certainty that roulette systems can't win Howard. This is the precisely the certainty that experienced people on these boards have that you can't win in the long run writing options. Your progress so far is exactly analagous to someone who believes they've discovered a winning roulette system and are yet to experience the inevitable run of 'bad luck'.

As an aside, once again Howard you've displayed a perfect ability to utterly misunderstand the point being made. This isn't a thread about whether you can win at roulette, it's a thread about the behaviourial biases in trend following systems and whether they allow mugs to win for longer.
Click to expand...

The true irony in your post is that you seem to feel you have the exclusive right to lulz. Are you another nanny stater? :-0

OTOH, I really do know two methods of beating roulette.
 
scose-no-doubt said:
He's saying wider stops, as normally used by trend followers, lead to longer survival.
Click to expand...
There's a big assumption being re-quoted without any attempt at verification regarding relative stop sizes.

Why do you and Arabian (et al) believe trend followers use larger stops than those using reversion to mean as a trading method?

Timeframe will be a factor for a start. Those trading longer TFs will by necessity have wider stops than those trading the sorter TFs. To make a blanket statement about relative stop sizes, we'd need to know how many in each camp trade which TF.

Not an exercise that would be particularly useful to undertake, but if you’re linking trading (or perhaps just trade) longevity to relative stop size you need to get specific on a like-for-like basis if you’re going to compare.
 
DashRiprock said:
e
even with no bet limits hed run out of money eventually

"the roulette wheel can remain a discrete random variable longer than you can remain solvent" LOL
Click to expand...

aside from which it's still a negative expectancy outcome. As Einstein (a scientist almost as bright as Howard Cohodas, but without the pilot licence) once said - the only way to win at roulette is to steal chips when the croupier isn't looking.
 
Jack o'Clubs said:
aside from which it's still a negative expectancy outcome. As Einstein (a scientist almost as bright as Howard Cohodas, but without the pilot licence) once said - the only way to win at roulette is to steal chips when the croupier isn't looking.
Click to expand...

Thanks. Now I know three methods of winning at roulette. :cool:
 
scose-no-doubt said:
He's saying wider stops, as normally used by trend followers, lead to longer survival.

On a related note I had a bit of a click moment myself after reading what you two mugs were saying about order flow in my TA fred. Makes sense to me now.
Click to expand...

OK i re read the first post and this is what i think he means

"because trend followers trade with less frequesncy than the mean reversioners, and comparing 2 equally bad traders, the mean reversion one will blow up first because there strings of trades are much longer in the same space of time that the trend follower... BUT when your looking at "what is a good strategy?" you compare the mean reversions in the same time as the trend followers.

so when you go on trading forums like this there are more unsuccessful trend followers than unsuccessful mean reversioners because the trend followers are "earlier" in there trading careers than the mean reversions even though theyve been trading for the same time.

so everyone sees all these trend followers that are "successful" even though there not really they are just n00bs in trading lifetimes and they go "o yeh trend following is brill and mean reversioners suck! look at all the successful trend followers on the websites vs mean reversions!"
 
donaldduke said:
I have found the opposite to be true, with trend following you have to take a lot more risky signals otherwise you risk missing the move, your win rate is going to be less than 50%.

With counter trend trades you can be more patient with your entry and so your win rate gets to be >60%.

It is possible to be succesful with both trend and counter tren approaches, but i believe trend following is easier to pull off.
Click to expand...
On a trend you can get in pretty much anywhere and make a profit - eventually - providing you set 'sensible' stops.

I think DD is talking about the higher risk that comes into play when you attempt to buy/sell ‘at value’. Taking what you perceive to be the end of the contra-trend move will get you in at a better price, for sure – if the trend continues. While you’ll not hit as many winners straight off on that basis, I’m surprised DD suggests the win rate will be less than 50% as that isn’t my experience.
 
You must log in or register to reply here.

Similar threads

V
Trend Following
2 3
Replies
42
Views
36K
wavebreak55
W
horace
Has anybody found trailing stops help trend following strategies?
2
Replies
28
Views
10K
JRP2891
J
F
t/a Market timing versus predicting roulette
2
Replies
37
Views
11K
tomorton
T
A
No Predictions for Trend Following
Replies
5
Views
2K
NVP
NVP
C
Trend Following
Replies
2
Views
3K
cube101
C
Top