# The best I've seen on ANY Forum!



## tech/a (22 January 2005)

*Every now and again an absolute GEM of advise appears this is not from me but unlike some I recognise absolute brilliance when I see it!! Hell this IS GOOD!
From a Poster on the Metastock Forum.*

Someone asked about a system recently and said it seemed to work well 
when the markets were trending upward, but not so good when they 
weren't. 

No surprise there. Most newbie's don't understand how the 
trend really works, and how it impacts systems, both for trading and 
for development, so I thought I would share a little experience and 
opinion.

I'm very sure there are some of you who won't believe what I 
write, and that's fine. You're free to do things anyway you
want. After all it's your money. 

I don't want to write a book in order to educate the one or two 
people who will read this so I'm going to be as brief as I can
and then you'll have to figure out the rest based on what I say in
here. Also, I'm not going to put any lace on what I have to say. I
usually don't anyway, but from now on I'm going to post a disclaimer
saying you need to pay attention to information and not the style. If 
you are easily irritated by the style stop reading now, and don't
waste your time (or mine ) with posts or emails about being 
politically correct.  So here we go.

Newbie's are very concerned about finding a system that works 
across a long time frame, etc. They are especially concerned about 
entries. They want to hit the entry as close to the turning point of 
a trend as possible. Both of those issues are a complete waste of 
time. The reality of it is when a market is trending either up or 
down, it really doesn't matter much what you are using for
entries as long as you are entering in the direction of the trend.  
(Yes, this is true. Later I'll give you some more facts you can 
research on this.)

A few simple trend indicators are all you need to see when to enter a 
trade. Entries during trends require almost no brain cells. You can 
see this from the nineties when everybody was a wizard trader, and 
then got wiped out in 2000 on. They just didn't pay attention to
what I'm explaining to you in this post. 

Once we have our entry, the problem becomes one of exit strategy and 
money management. 

You should develop an exit strategy that works separately 
from the entry indicator. If you don't know how to do this, you
can read many good systems development books by Chande, LeBeau and 
Kaufman. They discuss exits in great detail. They will also educate 
you on money management. 

Exit strategies are too numerous to discuss in a post. 
However, there is not such thing as the BEST exit. There are exits 
that work for your style of trading. 

To start the process of systems development, throw a few 
trend indicators on template and look at some charts. The do a few 
tests WHEN THE MARKET IS IN AN UPTREND. Most newbie's test
everything across a broad range of all kinds of market conditions. 
That's doing things the hard way. They've heard this is a good way to 
test systems. Wrong! The only people who need to test a system that 
way are the people who are trying to get you to pay $3000 to $10,000 
for one. They want it work at least a little when the market is not 
cooperating so they don't have hear a lot of complaints. (If you
want to read an interesting history of trading systems and the people 
who sold them, Bruce Babcock has a history section in his book The 
(Dow Jones) Irwin Guide to Trading Systems. After you read that you 
want ever consider buying one. It's got all your old favorites in
there Gann, Wilder, etc)

Since you're an individual trader and you've studied the 
systems development books I've recommended, educated your mind
and finally understand how trading actually works, you can change 
what you are doing according to market conditions. When that's the
case, there is an easier and more profitable way.

First figure out the trend. There are several ways to do this 
and they're all easy. On a weekly chart you can use a 10 and 40
week moving average. When the index of choice is above the 10 week 
moving average the market is in an uptrend. When the index is in 
between the 10 and 40 week moving average, it's whipping around,
consolidating, and screwing you out of money. That's what it's doing 
in there. When it's below the 40 week moving average it's in a down 
trend. That's the easiest way to define things. 

You can also look at some set of moving averages on a daily 
basis, like the 4, 9, and 18 triple MA or something else close like a 
5 and 20 EMA or SMA. It doesn't matter that much. Pick one.

The dailies will tell you when a correction is taking place 
in an up trend or down trend market. If the long term market bias is 
up, but there's a correction going on, you will want to take
shorts only and expect to hold them for a very limited period of 
time. This means use tight stops and don't let things run just to see 
where they're going to go. You only do that when the daily trend 
agrees with the long term trend.

Okay, now we know how to determine the trend, what comes 
next? As I said, stick a couple of trend indicators on a
chart-your choice of which ones-they all work about the same. There's 
no BEST one.

See how they look on a chart with a few symbols---during a 
period of time WHEN THE MARKET IS IN A DEFINITIVE UP TREND.  Then put 
them in your systems tester and test them on a bunch of stocks like 
the S&P 500. Use the same trend indicator formula for entries and 
exits-reverse the entry please-don't worry about exits at
first. If the trend indicator returns a reasonable amount of money, 
has a rational number of trades, etc then you're in business. 

Next develop your exits. Exits need to fit your personality 
more than entries. What I mean by that is too many people look at 
what makes the most money and then they can't trade it because
the draw downs, trade frequency or other problems cause them hysteria 
in the knickers. Pick exit strategies that you are comfortable with. 
Look at them on a chart. If you feel good about what you are seeing, 
put them in the tester. If the tester gives you reasonable results---
even if they're less profitable than some other set of
conditions-you're in business. 

One of the first steps to becoming a pretty good trader is to 
understand that you don't, shouldn't and can't maximize
everything. Don't even try. If it fits and you can trade it, you'll 
learn to improve it over time. However, you won't throw it out 
because you hate the way the system messes with your emotions. 

Now run the system over all the time frames that show the 
market is in an up trend and that you have data for. Break the 
periods into subparts and see how the system performs. If it does 
pretty good during all the up trends, then you've got your up
trend system. 

Reverse the process for down trends. Most decent trend 
indicators identify down trends just a good as they do up trends. 
Remember to test your down trend system WHEN THE MARKET IS IN A 
DOWNTREND.  Seems obvious, doesn't it. Okay!

If you test you're up trend system when the markets are in a 
down trend, guess what-it will perform poorly. Now why would you 
trade it during a down trend. Well, here's a clue---don't
trade it during a down trend unless you have a death wish, and some 
of you do.

If you don't like shorting, then stay out of the market when 
it's not in an up trend. Let me repeat that, STAY OUT OF THE
MARKET WHEN IT IS NOT IN AN UP TREND IF YOU DON'T LIKE SHORTING.

Well, you've read that the markets only trend 30% to 40% of 
the time. So how is this good systems development?

If you test your system during up trends and it has 6 winners 
for every 4 losers and it makes 3X the profit for each 1X the loss, 
if you run the tests when the market is in a sideways pattern, the 
systems test results are going to go down. Now it produces 4 winners 
for every 6 losers and only 1.5X the profit for 1X the losses. You 
can trade the system during sideways markets but get ready for more 
losers with smaller profits on your winners. In addition, you
won't be able to hold the trades for as long. Sideways markets may 
require tighter stops, and different exit conditions. Do you know how 
you figure that out?  Well, it involves using those market bias 
charts I talked about earlier when the market is in the sideways 
pattern. 

You may find that of three up trend systems, one works better 
in sideways markets. However, it's not going to work much better. 
Nothing will because sideways markets baffle everybody. Up two days, 
down three days is hard to trade, period. 

You may want to stop trading in sideways markets. A lot of 
people do. You may want to consider a sort of market neutral strategy 
where you are taking longs and shorts at the same time. Just
don't expect to make as much money. It ain't going to happen. 

In a sideways market if you violate the rules of good money 
management and exit strategies, you are going to pay, and pay and 
pay. This is the time when money management and exit strategy is 
everything. 

Now you're thinking that can't be true, he's saying
entries mean little, and that I can use almost anything when the 
market is in an up trend or down trend. Yes, that is what I'm saying. 
LeBeau, Van Tharp and others have tested all kinds of random entry 
strategies and random exit strategies and guess what. During the 
trending markets they made money with all kinds of dart throwing 
crap. 

In the sideways markets, very few strategies made money. You 
have to scratch out profits where ever and when ever you can find 
them. 

These are all the secrets you need to know to be successful.  
Okay, there's one more success factor worth repeating. Quit
trying to maximize everything, Stop it, stop it, stop it. Maximizing 
will kill you. There is no one best method, strategy, theory, etc. 
There are one or more strategies that fit you and that will allow you 
to trade with enough success to make money. If you try to find the 
maximal money making strategy, it will wrap itself around your neck 
like a boa and choke the life out of you as punishment for violating 
the common sense rule that maximization only works in theoretical 
mathematics and engineering classes. In real life, it is going to eat 
your fruits and nuts until you starve to death. 

If you take your up trend system and run it when the market 
is in a down trend, it's going to look very, very bad, and it
should. If it didn't it wouldn't work worth a crap in an up trend. So
don't struggle trying to fix it so it finds the one long trade out of 
the hundreds of short trades that are there. 

Let's summarize. You have two systems-one for up trends' 
which is long only' and one for down trends, which is short only.
You use them according to the market bias derived from the weekly and 
daily charts that I mentioned. You learn that almost any half decent 
trend indicator will work when the market is trending, so you
don't worry about the perfect setup, etc. You simply take the trades 
when the trend indicator tells you to take them. You spend some time 
finding both a money management and exit strategy that fits your 
personality but is not the optimal strategy for making the most 
money. When the market is moving sideways you use your up and down 
trend system, but you recognize that trades are going to be quick and 
you're only going to make a little money. You will not fall in
love with semi-meaningless words like over bought and over sold 
because you understand there really is not way to determine that. You 
will, however, recognize that almost every indicator is right part of 
the time. Your job is to figure out which ones you LIKE and when they 
are likely to be right.  You will understand which market conditions 
cause your favorite indicator to decline in its predictive abilities, 
and you will adjust as need be using the market bias trend detection 
system. And finally, you will erase from your mind the thoughts that 
it is possible to maximize or minimize any thing for any reason 
regardless of your educational back ground, profession or belief in 
higher powers. 

I think I'm going to write a detailed article on how to make 
all of this work for Roy's newsletter. In it I'll explain
what the better trend indicators are and how to use them, and I think 
I'll give more detail on testing and trading these systems. 

Sign up, I think you'll find it very enlightening. 

www.metastocktips.co.nz

No, I don't work for Roy. I don't get paid for writing 
anything in the newsletter. Roy lives halfway around the world from 
me. So why do I recommend his newsletter all the time. For the same 
reason I recommend system development books. 

Because the newsletter is directly on point with a whole lot of the 
questions I read on the boards. If you won't spend $120 a year to
get your questions answered, improve your trading systems 
dramatically and learn how to code your own stuff, then why should I 
spend my time answering your pleas for help on the boards. If you 
won't help yourself why should anyone else bother with you. 

You'll notice I mostly recommend systems development books rather 
than trading books. Systems development books tell you what works and 
what doesn't. Most trading books talk about somebody's
personal trading system, or a system that newbie's can't seem to get
enough of. Ninety nine percent of the time, after you've spent a lot 
of money and time learning some guru's pet system, you'll wind
up giving it up and doing what I'm telling you to do. You never hear 
the guru's tell you their system only works well when the market is 
in an up trend. You know why they don't tell you that, because you
wouldn't buy their system. 

Do you know how many of the guru's trade from a large capital
account-almost none of them.  At least a few of them admit it. Most 
of their money is in mutual funds. They move it in and out of the 
mutual funds using the trend identification methods I've told you 
about. They don't trade with their serious money. 

Rather than follow the guru's, develop your own simple methods.
It will serve you much, much better as will learning how to see the 
market bias without Gann or Elliot or some other complex as hell 
method. 

Have fun!  

*Now print it off and read it once a month until you have your trading method!*


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## Bingo (22 January 2005)

*Re: The best Ive seen on ANY Forum!*

Yes I found it good reading and certainly food for thought.

Bingo


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## Porper (23 January 2005)

*Re: The best Ive seen on ANY Forum!*

Ok Tech,

just had a quick read, and will probably need to read it another 100 times to understand half of it, but will give it a go as I need more information on trading/investing if I want to trade profitably most of the time.

It is easy for us all to get complacent at the moment in a bull market, everybody is making lots of money.

Keep the posts coming, but not too fast, some of us take longer than others to understand sometimes.


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## GreatPig (23 January 2005)

*Re: The best Ive seen on ANY Forum!*

I think that post can be mostly summarised in a few simple statements:

- Only trade long during an uptrend

- Only trade short during a downtrend

- Choose any indicator that seems to do the job for an entry. Don't try to pick the exact bottom (or top if shorting).

- Choose whatever exit best suits you. Don't try to pick the exact top (or bottom if shorting).

- Have separate entry/exit rules for uptrends and downtrends.

- Test uptrend rules on historic uptrends only, and downtrend rules on historic downtrends only.

- If you wish to try and trade sideways markets, don't expect to make as much money.

I think that's basically what it's saying.

Cheers,
GP


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## Mofra (23 January 2005)

*Re: The best Ive seen on ANY Forum!*

Interesting reading,

Greatpig, I think you summed up the article pretty well. I'm sure that more than a few people would argue that in a sideways trending market, writing options can be an effective strategy - adding perhaps another string to your trading bow.

Cheers,

Mofra


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## wayneL (23 January 2005)

*Re: The best Ive seen on ANY Forum!*



			
				Mofra said:
			
		

> Interesting reading,
> 
> Greatpig, I think you summed up the article pretty well. I'm sure that more than a few people would argue that in a sideways trending market, writing options can be an effective strategy - adding perhaps another string to your trading bow.
> 
> ...




You've touched on a good point Mofra.

The post Tech has quoted is pretty much gospel for trend trading, which is what most people are/should be doing.

But there are other ways for the more experienced. For instance, most people on internet forums would know Frankiedee/Deelite who does pretty well trading COUNTERTREND strategies.

Most folks find that sort of trading disastrous, but, some kick a#*e.

Note: trading countertrend is not the same as trading against the trend.

Cheers


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## tech/a (23 January 2005)

*Re: The best Ive seen on ANY Forum!*

Wayne/Mofra.

Adding little more to your postings.

It took me a while to actually UNDERSTAND what trading for your personality actually meant and how important that is.

I guess like most Ive tried just about everything and while I like most everyone else have been a successful failure at most everything,one style or trading type eventually strikes up enough interest for us to become PASSIONATE enough to put in the hard yards to become successful at it!

For Wayne and possibly Mofra and others here thats trading Option Stratagies.For Frankiee thats cycle,and counter trend trading.Frankiee is passionate about his methodology and as such has found an edge.

Someone far wiser than me said.

*If you want success be an EXPERT it doesnt matter much what your an EXPERT in but become an EXPERT in something.Youll succeed and people will beat a path to your door*

Ive mellowed over the years as I UNDERSTOOD that not everyone will choose that which Ive chosen.Their method if profitable will be just as valid to trade as any other.

But there is a common thread to all methods and that is Positive expectancy and not only to trading---same goes for Business,Property,even friendships.

Although it appears I have chosen Trendtrading as my prefered expertise it is infact Mechanical Trading,not only for its profitability but for its execution and management,particularly time.

The above fits in with the how of my method and has me looking into ways of improving my trading.Sure its basic common sence but like most of us I need it written in such a way that it hits me fair in the frontal lobe!

tech


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## canny (21 April 2005)

*Re: The best Ive seen on ANY Forum!*

Phew!
Too late to take it all in - not even sure how I found this old thread - looking at something about the Dow ruling our markets!
Found this interesting enough to save to Word, to read in the more waking hours - thanks tech.


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## RichKid (22 April 2005)

*Re: The best Ive seen on ANY Forum!*



			
				canny said:
			
		

> Phew!
> Too late to take it all in - not even sure how I found this old thread - looking at something about the Dow ruling our markets!
> Found this interesting enough to save to Word, to read in the more waking hours - thanks tech.




Just goes to show how much is buried in here, those search tools are really good. Newcomers are encouraged to search for a topic of interest first before posting in case the issue has been addressed thoroughly before. New discussions are always welcome.

I've been reading stuff from ASF last year which I didn't quite understand at the time but it makes more sense now. That article (the first post) is great and I'm only now beginning to understand it, thanks Tech. WayneL's point about countertrends is also very important from what I have gathered recently, nice to have the old hands chipping in. Glad Joe's keeping the old posts, this'll turn out to be a great archive in time. Helpful summary too GP.


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## crash82au (18 December 2005)

Yep - Thanks tech/a and asf search function, very interesting article. I think i've picked the important parts out.

Danial


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## nomore4s (16 January 2007)

Found this very good article courtesy of tech/a (may be an old thread but still great info). Found some very interesting points especially for a relative new comer who's still finding my way. Thought I'd revive it for anyone who might find it interesting.


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## lesm (16 January 2007)

> Because the newsletter is directly on point with a whole lot of the
> questions I read on the boards. If you won't spend $120 a year to
> get your questions answered, improve your trading systems
> dramatically and learn how to code your own stuff, then why should I
> ...




Tech/a

An appropriate article for many to read.

I particularly liked the above paragraph, especially the last sentence.

If people aren't prepared to do the 'hard yards', why should others go out of their way to help them?

Cheers.


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## Wysiwyg (16 January 2007)

lesm said:
			
		

> Tech/a
> 
> An appropriate article for many to read.
> 
> ...




From my point of view... brokerage fees,c.g.t. and especially trading losses is sufficient expenditure (multiples of $120) to provide me with all the answers to the questions I have.

Great article from that chap back then though.Refreshing to see it in words. I like it and am always learning.


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## nomore4s (28 August 2008)

nomore4s said:


> Found this very good article courtesy of tech/a (may be an old thread but still great info). Found some very interesting points especially for a relative new comer who's still finding my way. Thought I'd revive it for anyone who might find it interesting.




Just thought I'd bump this thread as there are alot of new members that may not have read this (1st post in the thread).

Also with the market conditions the way they are at the moment it may give some food for thought.


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## mattyhammer (5 September 2008)

Hi all,
That is a very intense read, especially for a beginner. Can anyone shed some light on what a "trend indicator" is and how I identify some? I did a bit of research on it but came up with 0. Sort of thinking it is something to do with a pattern/trend in a particular entity or conglomeration of entities (ie. S&P top 50). Anyone?
Cheers.


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## Nashezz (5 September 2008)

*Re: The best Ive seen on ANY Forum!*



RichKid said:


> Just goes to show how much is buried in here, those search tools are really good. Newcomers are encouraged to search for a topic of interest first before posting in case the issue has been addressed thoroughly before. New discussions are always welcome.
> 
> I've been reading stuff from ASF last year which I didn't quite understand at the time but it makes more sense now. That article (the first post) is great and I'm only now beginning to understand it, thanks Tech. WayneL's point about countertrends is also very important from what I have gathered recently, nice to have the old hands chipping in. Glad Joe's keeping the old posts, this'll turn out to be a great archive in time. Helpful summary too GP.




Be great if you moderators could sticky some of these threads and/or (even better) put them in a 'Starter Knowledge Base' of some kind. The beginners lounge doesn't cut it as the same questions keep getting asked and it is more of a general troubleshooting forum outside in addition to the basic repetitive knowledge people require.

I have not been a member here very long and already I have seen numerous (as in repeating the same question) threads of people (including myself) asking what are good books/resources, good charting programs, good beginner trading strategies etc. Why don't you invite certain experienced traders (people like waynel, Great Pig, Trembling Hand, tech/a etc come to mind) to give their thoughts on this information, put it in a knowledge base and then allow other members to comment or add to....

You can't really search for this stuff without finding a million threads, majority of which have very limited answers - particularly as the guys with the answers aren't seemingly visiting the Beginners Lounge too much for understandable reasons.


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## bunyip (5 September 2008)

tech/a said:


> *Every now and again an absolute GEM of advise appears this is not from me but unlike some I recognise absolute brilliance when I see it!! Hell this IS GOOD!
> From a Poster on the Metastock Forum.*
> 
> 
> ...




The article is mostly good stuff, but he's wrong on a couple of points.

First, he recommends trading short when the daily trend is moving downward against the longer term upward weekly trend. This is a bad policy for two reasons.....

1. There's no reason to do it. Follow enough stocks, and you can always find trade signals in the direction of both the daily and weekly trends.

2. Moves against the longer term trend tend to be shorter in duration, with limited profit potential, compared to the moves that occur when both the longer and shorter term trends are in harmony. Sure there are exceptions, but the general rule holds true....the bigger moves occur when both trends agree.

The second place he's wrong is when he talks about trading a sideways market. 
Given that there are always some strongly trending stocks, either up or down, even when the overall market is choppy or flat, why would anyone waste time trying to scratch small profits out of stocks that are going sideways? You just don't need to do it. Follow enough stocks (there are plenty of US stocks if you can't find enough in the ASX), run a scan over them to find those that are trending. You'll be surprised at how many good trenders there are, even when the overall market is trendless. 

Apart from the above points, he left out one invaluable piece of advice.....sector analysis.
One of the most important things a stock trader can do to find the best trading opportunities is to analyse the sectors to see which ones are trending. Sector analysis gives us a way of identifying the best hunting grounds in which to search for trading opportunities.
You go a long way towards stacking the odds in your favour by trading the strongly trending stocks that comprise the strong trending sectors.

Sometimes when the overall market is directionless, there will be one or two sectors that are trending strongly. 
A couple of years back the US market couldn't build up a head of steam in either direction, just chopped around all over the place. But while this was going on, the US Energy sector developed a mind of its own by spending almost the entire year trending strongly upward. While most traders were getting chopped to pieces, the switched on traders were nailing some dream trades in US energy stocks.

The rest of that article was pretty good stuff......I'd give it about 8 out of 10.


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## noirua (5 September 2008)

Keep 70% to 80% of your money in cash. Then going for high risk stocks is not a problem.  Being either a forced seller or a nervous holder, are amongst the biggest errors. 
If a strategy takes more than 100 words to explain then it is just a load of blarney.


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## Trembling Hand (5 September 2008)

noirua said:


> If a strategy takes more than 100 words to explain then it is just a load of blarney.



 thats funny I always thought generalisations were where the crap lies.


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## theasxgorilla (5 September 2008)

Trembling Hand said:


> thats funny I always thought generalisations were where the crap lies.





 Funny, with a capital F.


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## MichaelD (5 September 2008)

mattyhammer said:


> Can anyone shed some light on what a "trend indicator" is and how I identify some?




1. Get stock chart.
2. Show it to a 5 year old.
3. Ask - is it going up? is it going down?

The best trend indicator in existence since they're not out to self-sabotage.


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## Nashezz (5 September 2008)

lol Michael. Not entirely helpful though.

Trend indicators are usually things like moving averages (abbreviated everywhere to MA). The clearly point to the trend of the underlying and depending on what distance you set them at, can show you the short,medium or long term trend. MA's can be set to average the price over the last few minutes all the way up as far as you want to go.

Common MA's used are 5,15,35 and 150 day although everything in between is also used.


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## bunyip (6 September 2008)

Below is an extract from the article posted by Tech. 

_The reality of it is when a market is trending either up or 
down, it really doesn't matter much what you are using for
entries as long as you are entering in the direction of the trend. 
(Yes, this is true. Later I'll give you some more facts you can 
research on this.)
Now you're thinking that can't be true, he's saying
entries mean little, and that I can use almost anything when the 
market is in an up trend or down trend. Yes, that is what I'm saying. 
LeBeau, Van Tharp and others have tested all kinds of random entry 
strategies and random exit strategies and guess what. During the 
trending markets they made money with all kinds of dart throwing 
crap. _

What he (the author of the article) is saying is that when the market is trending, your entry strategy isn't particularly important....as long as a strong trend is in progress, pretty much any entry strategy will suffice.
While that's largely true, it ignores the fact that not all entries are equal....some are better than others. The ideal entry strategy is one that puts you into the market right at the start of a big momentum surge in the direction of the trend. 
Over on the PPS thread you can find posts from myself, Nick Radge and others giving chart examples showing the benefit of entering from patterns that are precursors of big momentum surges in the direction of the trend. These are the sort of moves that can give you very big profits in a very short time. Why not take advantage of them!

On the 'Forex Help' thread I've given further examples of the massive momentum surges that you can capture by using a couple of simple chart patterns to fine tune your entries.

Someone whose opinions I value is US trader, fund manger, author, and trading educator, Linda Bradford-Raschke. She's one of the traders featured in Jack Schwager's 'Market Wizards' books.
Below is an extract from an interview she gave....... 


*Interviewer*
_"How important is market timing in your analysis"?_

*Linda Bradford-Raschke*
_"Very important. It helps determine how much you want to risk and it helps determine the degree of follow through.
If your timing is such that you are hopping aboard right when there is an increase in momentum, then you have greatly increased the probability of follow through in your direction."_


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## tech/a (14 September 2008)

This definately belongs here in my view.

Its a 3 hr Crash course but a must for those into the fundamentals which will quite possibly drive our future over the next 20 yrs.

Thanks to Jose Silva for providing the link.

http://www.chrismartenson.com/crashcourse


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## tech/a (14 September 2008)

I'm just going through the Crash Course to World Economics for the second time.

Hidden in the title is the obvious.Presented sussinctly and easy for all to understand

*Martenson is certainly right about one thing*

You really *DONT* have anything more important than this to do for the next 3 hrs.


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## bluelabel (15 September 2008)

Well as a noobian i have to say that article reminds me of the add on tv where the kid goes to school and everything is fuzzy for him and he doesnt understand a thing.  In short, i may as well have been reading chinese...

I have copied it to my snippets folder as suggested and will give it a going over later.

Thanks to Johenmo for pointing me in this direction.

Thanks to tech/a for the snippets folder suggestion.

cheers, 

blue


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## CanOz (15 September 2008)

tech/a said:


> Thanks to Jose Silva for providing the link.
> 
> http://www.chrismartenson.com/crashcourse




I must be invisible? 

https://www.aussiestockforums.com/forums/showthread.php?t=12227&highlight=crash

I started the thread on it Tech!

Anyway, i'm happy to there are a few people finally getting through it.

Cheers,


CanOz


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## tech/a (15 September 2008)

CanOz said:


> I must be invisible?
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=12227&highlight=crash
> 
> ...




Sorry Can didnt see it.
Only Jose's post next door.


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## white_crane (3 December 2008)

Thanks tech/a for a great thread and thanks nomore4s for bumping it


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## MRC & Co (4 December 2008)

bunyip said:


> The reality of it is when a market is trending either up or down, it really doesn't matter much what you are using for
> entries as long as you are entering in the direction of the trend.




Don't agree with this part.

The tighter your entry, the more you can LOAD UP.  Buying or selling pullbacks in the trend is the safest IMHO.  Jumping on will get you squeezed, unless you use loose entries and this will not allow bigger size.


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## kam75 (8 December 2008)

This was obviously written by someone heavy on system development and back testing, but light on profitable trading. Trends, trends and trends.  "The trend is your friend except at the end.....when it bends."  I think I borrowed this from Ed Seykota.  Anyway, one of the first steps to becoming a 'pretty good trader' is to understand that you need to understand yourself.  Then you may find you don't need to understand so much about the market.


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## explod (9 December 2008)

kam75 said:


> This was obviously written by someone heavy on system development and back testing, but light on profitable trading. Trends, trends and trends.  "The trend is your friend except at the end.....when it bends."  I think I borrowed this from Ed Seykota.  Anyway, one of the first steps to becoming a 'pretty good trader' is to understand that you need to understand yourself.  Then you may find you don't need to understand so much about the market.




Yes I think that's right.   "Trend Following" by Michael Covel I found one of the best guides I have ever read.  He also wrote :"The Complete Turtle Trader" which I understand is good too.    The saying I picked up was "the trend is your friend untill the bend"


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## MRC & Co (9 December 2008)

kam75 said:


> Anyway, one of the first steps to becoming a 'pretty good trader' is to understand that you need to understand yourself.  Then you may find you don't need to understand so much about the market.




What a load of BS!

First and foremost, you have to understand the market.


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## tech/a (9 December 2008)

"Understanding the market" (Which I presume in this discussion) is the "perceived why" an instrument will rise or fall---isn't necessary.
"Understanding yourself" isn't required either.

*IF*

You know why the way your trading will be profitable.
If like 99% of traders you cant answer this then you can be an economic genius and have the discipline of a Tibetan Monk and fail spectacularly.

It really is that simple.

Oh
Forgetting exotics.
Please show me how its possible to turn a profit without a trend.2ticks in your direction is a trend!
Scalpers shoot for a trend of accumulated wins greater than accumulated losses.They love a trend.


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## MRC & Co (9 December 2008)

Welcome back Tech.

Understanding the market is exactly that.

You have to know the players in your market, how they act, how they think, how your market is likely to react to certain conditions and what it is likely to do at certain levels.  

Of course you then need your own way of profiting off that, you can be right all day and still loose.  This is where it takes time to create your own style, which is where the personality part mainly comes into the equation.  

I don't get the last paragraph of your post.


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## skyQuake (9 December 2008)

tech/a said:


> *IF*
> 
> You know why the way your trading will be profitable.




..and I didn't understand this bit.


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## tech/a (9 December 2008)

> Please show me how its possible to turn a profit without a trend.2ticks in your direction is a trend!
> Scalpers shoot for a trend of accumulated wins greater than accumulated losses.They love a trend.




Thought it was/is self explanatory.
No trend no profit regardless of time frame/regardless of length of trend.



> .and I didn't understand this bit




I'll then ask this.
How do you (or anyone else here who trades) know that repetition of their entry and exit strategy will turn a profit.Particularly if your a discretionary trader.Not saying you cant profit trading in a completely discretionary manner but HOW do you know what YOUR doing time and again will or even CAN turn a profit. 99% simply don't know.

Know this and nothing else matters it really doesnt.


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## prawn_86 (9 December 2008)

I would argue that its the profit and results that show you can do it.

If you are still doing it profitably after a yr, 2 yrs, 5yrs then it has proved it works


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## Trembling Hand (9 December 2008)

tech/a said:


> No trend no profit regardless of time frame/regardless of length of trend.




Ha!! you have never seen someone scalp a large spread market like the HSI or a commodity then??

You can take 10 ticks just working the spread. no actual movement in the instrument.

Ya learn something every day hey? (yes I'm a smart ar$e)


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## MRC & Co (9 December 2008)

If a market is not trending (say lunch), and bouncing off an important level numerous times, you can fade it repeatedly.  No trend, still profit to be made.  Or you could simply make the market for all the retail guys who don't use the OB to buy or sell if there is a spread and no trend.  Just taking flicks for hours straight.  Some of my best lunchtime periods come from doing this.

Ah, looks like TH just beat me too it, though SPI is looking more like HSI every day!  Scary!

As for knowing you can turn a profit and why, I think profits speak for themselves as Prawn stated.  

If your trying to trade breakouts in chop, you will soon see it's not working.  If your trying to rely on correlations with other markets and they break down, you will soon see it on your equity curve.  If your trying to fade moves and the trend is strong as hell, you will soon see it.


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## So_Cynical (9 December 2008)

Trend following....now i get it.

Its just like punting on two up at the casino...when the inevitable run 
starts, bet with it and keep winning as long as the run continues.

I find it hard to keep going heads when there's already been 10 in a 
row, so trend following prob don't suit me.


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## Nick Radge (9 December 2008)

The move from bid to offer is actually a trend fellas.

Trend following is nothing like punting at a casino. The casino restricts your bet size and restricts your win size. Markets allow maximum bet size but more importantly, for trend followers, no maximum upside.


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## tech/a (9 December 2008)

Semantics.
Each to their own.
For those who like simplistic solutions I feel this piece has its place.
Those who prefer more complex trading gymnastics--other solutions will fit them better.
In the end consistent profit is the goal---one mans simplicity may well be seen as one mans complexity to another.
If the trader knows why his simple complexity turns a profit he is well in front of those who have no idea.


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## Trembling Hand (9 December 2008)

tech/a said:


> Semantics.



 Sometimes thats all I have!!

:


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## Cartman (9 December 2008)

So_Cynical said:


> Trend following....now i get it.
> 
> Its just like punting on two up at the casino...when the inevitable run
> starts, bet with it and keep winning as long as the run continues.
> ...




Another South Park junkie lol ---- SWEET ------

The market is the best casino around.  

If the market gives you get 10 Reds in a row and the momentum is slowing and the volume is dropping its probably time to start accumulating Black.  

Great thing is that even if Black doesn't come up on the first few spins, chances are you will still win anyway ----- If red starts to come up again, you usually get a couple of opportunities to cash out with minimal losses.

Just a matter of putting the edge in your favour ----- Buy at the bottom of cycles, sell at the top.  Add some risk management, stir well, couple of hail mary's and bobs your uncle.

Simple in theory, hard in practice ----- Why? ----- Human nature likes to sabotage itself.


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## chops_a_must (9 December 2008)

tech/a said:


> I'll then ask this.
> How do you (or anyone else here who trades) know that repetition of their entry and exit strategy will turn a profit.Particularly if your a discretionary trader.Not saying you cant profit trading in a completely discretionary manner but HOW do you know what YOUR doing time and again will or even CAN turn a profit. 99% simply don't know.



Faith.

Deal with it.



prawn_86 said:


> I would argue that its the profit and results that show you can do it.
> 
> If you are still doing it profitably after a yr, 2 yrs, 5yrs then it has proved it works



Still doesn't explain why people extend it into the future. The key word is above.



tech/a said:


> Semantics.



Not really.

All probability theory is, is manipulation of the language of faith and hope into something that sounds better and is more palatable, but retains all the inherent properties of faith and hope.


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## GumbyLearner (9 December 2008)

chops_a_must said:


> All probability theory is, is manipulation of the language of faith and hope into something that sounds better and is more palatable, but retains all the inherent properties of faith and hope.




Interesting quote chops. 

You know really when it comes to semantics it was those guys studying for their B.A. (Bugger All) majoring in postermodernism that use to annoy me with their semantics and useless tripe. 

Here's some useless and classic examples

www.elsewhere.org/pomo/


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## chops_a_must (9 December 2008)

GumbyLearner said:


> Interesting quote chops.
> 
> You know really when it comes to semantics it was those guys studying for their B.A. (Bugger All) majoring in postermodernism that use to annoy me with their semantics and useless tripe.
> 
> ...




Postmodernism is one of my pet peeves.


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## GumbyLearner (9 December 2008)

I agree chops.

Its like trying to stay awake on caro or trying to get pissed on claytons. 

:


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## chops_a_must (9 December 2008)

GumbyLearner said:


> I agree chops.
> 
> Its like trying to stay awake on caro or trying to get pissed on claytons.
> 
> :




It's just completely self refuting. You can't deny meaning to what you are attacking; as what are you actually attacking, nothing?


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## frugal.rock (23 April 2022)

tech/a said:


> This definately belongs here in my view.
> 
> Its a 3 hr Crash course but a must for those into the fundamentals which will quite possibly drive our future over the next 20 yrs.
> 
> ...



Just thought I would provide an updated link to this...









						Crash Course | Peak Prosperity
					

The Crash Course has provided millions of viewers with the context for the massive changes now underway, as economic growth as we’ve known it is ending due to depleting resources. But it also offers real hope. Those individuals who take informed action today, while we still have time, can lower...




					peakprosperity.com


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