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Applying Magick to Stock Market Trend Trading...
04-04-2017, 09:33 PM (This post was last modified: 04-04-2017 09:39 PM by SteampunkScientist.)
Post: #1
Anyone interested or actually performing Trend Trading (buying stock when a trend or "momentum" is upwards, selling short when the trend is going down)?

I have read several books on this by Michael Covel, Andreas Clenow, and Ed Seykota. Basically these guys are very successful trend traders with Seykota being one of the inventors of the idea of using computers to perform algorithmic trend following which can be used on a variety of time-lines. These include High Frequency trading (what banks and large companies do using supercomputers), to day trading to medium range (several days to weeks and even months between trades).

Of course these are based on a variety of moving averages, indicators, and markers such that rules are automatically run to produce buy and sell signals. They require a rather ruthless "sticking to the rules" and the ability to remove one's emotions from what is occurring.

These are some points from Ed Seykota that have a sense of profundity, and are his basic rules. Considering how much money he has made for himself and others, they must be pretty good rules:



  • Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.
  • To avoid whipsaw losses, stop trading.
  • Risk no more than you can afford to lose and also risk enough so that a win is meaningful.
  • Trend following is an exercise in observing and responding to the ever-present moment of now.
  • Fundamentalists and anticipators may have difficulties with risk control because a trade keeps looking better the more it goes against them.
  • Until you master the basic literature and spend some time with successful traders, you might consider confining your trading to the supermarket.
  • don’t predict a non-existing future.
  • The aha! process lies at the heart of price change. For instance, consider the series: OTTFFSSE. What is the next letter? This puzzle creates tension – until you see the first letters of the ordinal numbers – one, two. Aha! you say. A lot happens during an aha. The puzzle dies and the tension dissipates. A societal aha! drives price. Read the newspapers and the news magazines during a major move. At first, no one gets why the move is happening. There’s a lot of confusion. Part of the move’s way up, some people get it. At the end, everybody gets it. The tension is resolved and the move ends.

Magic: When you pull a rabbit out of a hat...
Magick: When the rabbit pulls you out of a hat...
In either case, you should keep a jaundiced eye on that hat...
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05-12-2017, 01:44 PM
Post: #2
I doubt the trend trading has enough statistic advantage than others for example buy-and-holds long investing.

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