A SMA is a technical indicator.Ferru123 wrote:I'm of the school of thought that says that no amount of technical analysis and weird and wonderful indicators can beat a simple moving average crossover!
Good luck with that!
Spread Betting
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superfrank
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Good luck with that!
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andyfuller
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What is the weather like in the Bahamas today?Ferru123 wrote: I'm of the school of thought that says that no amount of technical analysis and weird and wonderful indicators can beat a simple moving average crossover!
Only messing, I don't think you can say one thing or the other is right or wrong or one better than another. I am sure you can find examples of people doing well using just about every indicator under the sun. I would guess it is a matter of finding what works for you and that is probably a combination of things.
I didn't say it wasn't.superfrank wrote: A SMA is a technical indicator.
No luck is needed.superfrank wrote:Good luck with that!
There is strong statistical evidence that using MA crossovers will produce a massive profit over times.
There may well be non-anecdotal evidence for the effectiveness of non-trend following indicators, however - I keep an open mind...
Jeff
No idea - Don't want to know, and don't need to know!andyfuller wrote: What is the weather like in the Bahamas today?
What you need is a method that will enable you to cut your losses and let your profits run. There's more than one way of doing that, but why over-complicate things?andyfuller wrote:I would guess it is a matter of finding what works for you and that is probably a combination of things.
Jeff
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superfrank
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If you're so sure it's the holy grail then stop talking about it and get trading it!
You can automate strategies like that easily in futures trading software and apply it to as many markets as you like. You can also back test the theory using real data (just in case!).
You can automate strategies like that easily in futures trading software and apply it to as many markets as you like. You can also back test the theory using real data (just in case!).
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superfrank
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Ferru123 wrote:There is strong statistical evidence that using MA crossovers will produce a massive profit over times.
Yes, there is. I refer you to a book called Trend Following by Michael Covel.
There is also evidence that other trend following methods produce a long-term profit.
If your indicator is designed to get you into trending markets and get you out of markets when they stop trending, then IMHO they'll work. But if you're relying on support and resistance levels (which are only knowable with hindsight) or signs that the market is oversold, good luck to you, because I think you'll need it!
As the author of a manual on Level 2 trading puts it (a guy who's made millions with ladder trading, but spent years in the trading wilderness using technical analysis):
You have to know what is happening RIGHT NOW. The people playing RIGHT NOW are the ones who are going to move the market. Are the people who are playing right now going to make decisions based on technical analysis? Maybe. Not likely. Not the guys with money.
And if they do, chances are they are going to do what technical analysis tells you not to do. If the technicals say buy, they are going to sell.
Think about it. Fibonacci numbers? Gann lines? Stochastics? Bollinger Bands? What are these things? They are ways of trying to classify data. They are numbers calculated after the fact. They are indicators used to try and predict the future. How can a Gann line tell me what Bill at XYZ hedge fund is going to do? Even charts themselves...they are just lines on a page. The most basic of charting ideas, drawing trendlines, fails to make sense. The
trendlines change depending upon the scale of the chart. Look at a 2 minute, 5 minute, 60 minute and daily chart of the same product. Try to draw trendlines on each one. Lines within lines within lines. It's ridiculous'.
Hear hear!
Jeff
There is also evidence that other trend following methods produce a long-term profit.
If your indicator is designed to get you into trending markets and get you out of markets when they stop trending, then IMHO they'll work. But if you're relying on support and resistance levels (which are only knowable with hindsight) or signs that the market is oversold, good luck to you, because I think you'll need it!
As the author of a manual on Level 2 trading puts it (a guy who's made millions with ladder trading, but spent years in the trading wilderness using technical analysis):
You have to know what is happening RIGHT NOW. The people playing RIGHT NOW are the ones who are going to move the market. Are the people who are playing right now going to make decisions based on technical analysis? Maybe. Not likely. Not the guys with money.
And if they do, chances are they are going to do what technical analysis tells you not to do. If the technicals say buy, they are going to sell.
Think about it. Fibonacci numbers? Gann lines? Stochastics? Bollinger Bands? What are these things? They are ways of trying to classify data. They are numbers calculated after the fact. They are indicators used to try and predict the future. How can a Gann line tell me what Bill at XYZ hedge fund is going to do? Even charts themselves...they are just lines on a page. The most basic of charting ideas, drawing trendlines, fails to make sense. The
trendlines change depending upon the scale of the chart. Look at a 2 minute, 5 minute, 60 minute and daily chart of the same product. Try to draw trendlines on each one. Lines within lines within lines. It's ridiculous'.
Hear hear!
Jeff
superfrank wrote:Ferru123 wrote:There is strong statistical evidence that using MA crossovers will produce a massive profit over times.
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superfrank
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I think you'll find I've stated many times that I take technical analysis with a pinch of salt. I posted the charts for a laugh. It's you that is saying you can make millions using the simplest technical indicator there is.
Come on Jeff, tell me the markets that are trending atm?
All that guff is based on ancient times when stock markets only ever went up - a monkey could have made money with a buy and hold strategy in those times, but things have changed.
Come on Jeff, tell me the markets that are trending atm?
All that guff is based on ancient times when stock markets only ever went up - a monkey could have made money with a buy and hold strategy in those times, but things have changed.
Next time you watch Liverpool play, remember that John W Henry bought the club using a fortune built on a very simple trend following algorithm...superfrank wrote:It's you that is saying you can make millions using the simplest technical indicator there is.
Depends on how you define trending. And remember that all trends are historical - you never know at any given moment whether a market is trending.superfrank wrote:Come on Jeff, tell me the markets that are trending atm?
Given that trend following hedge funds did rather well when the proverbial hit the fan in 2008, I would say that now is a good time to be a trend follower...
That doesn't explain how trend following funds have had, for years, average annual % profits far exceeding the increases in price of the major world incidices (and outperforming Warren Buffett too).superfrank wrote:All that guff is based on ancient times when stock markets only ever went up - a monkey could have made money with a buy and hold strategy in those times, but things have changed.
Jeff
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superfrank
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Eh?! How the hell will you know which markets to trade then?!Ferru123 wrote:Depends on how you define trending. And remember that all trends are historical - you never know at any given moment whether a market is trending.superfrank wrote:Come on Jeff, tell me the markets that are trending atm?
I define trending as going up or going down.
The fact that a market dropped from 10 to 5 doesn't mean it's trending. It means it trended. It might be about to turn around and shoot up to 15!
Trend following isn't about prediction. Most trend following systems only have profitable trades about 40% of the time, so how can it be?
The idea is that you let the trend run its course, and cut when the market moves against you. You might get the mother of all moves, or you might take a small loss.
You could probably enter the market random and still make a profit using trend following if you manage your exits correctly!
As long as markets continue to over-react (ie until such time as human nature changes), trend following will continue to work...
Jeff
Trend following isn't about prediction. Most trend following systems only have profitable trades about 40% of the time, so how can it be?
The idea is that you let the trend run its course, and cut when the market moves against you. You might get the mother of all moves, or you might take a small loss.
You could probably enter the market random and still make a profit using trend following if you manage your exits correctly!
As long as markets continue to over-react (ie until such time as human nature changes), trend following will continue to work...
Jeff
superfrank wrote: Eh?! How the hell will you know which markets to trade then?!
I define trending as going up or going down.
PS Have a look at this: http://www.trendfollowing.com/whitepape ... stocks.pdf
Not bad for a load of guff, eh?
Jeff
Not bad for a load of guff, eh?
Jeff
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superfrank
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This is like interviewing a politician! Answer the question...superfrank wrote:Come on Jeff, tell me the markets that are trending atm?
I did answer the question! The answer might be subtle but that doesn't make it evasive!
You're inferring a continuous process where one may or may not exist. Unless you're Mystic Meg, you're only qualified to talk about what the market has done in the past...
Jeff
You're inferring a continuous process where one may or may not exist. Unless you're Mystic Meg, you're only qualified to talk about what the market has done in the past...
Jeff
superfrank wrote:This is like interviewing a politician! Answer the question...superfrank wrote:Come on Jeff, tell me the markets that are trending atm?