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Another approach is to view the concept of trend as it
relates to profit and risk.
Under this guidline, a trend ends when a rally or reaction is
large enough to wipe out significant profits of those holding
postions in accord with the current trend state.
Using this theory, markets trend 23% of the time, and are in
non-trending states 77% of the time.
Walt Downs
CIS Trading
http://cistrader.com
Tom DeMark wrote:
>
> frank,
>
> a number of years ago we conducted a study to determine the period of
> time markets trend versus range trade. with the exception of cartel
> markets--those markets which can be controlled due to limited suppliers
> and/or concentrated and few commercial buyers and/or one factor
> determinants such as coffee freeze, oil embargo, rubber or tin
> restrictions, and currency markets(money supply and interest rate
> driven, etc)most markets trend up 12-16% of the time and trend down
> 6-12%of the time. psychologically, an uptrending market is
> self-fulfilling and reinforcing, so as the positive news or outlook
> unfolds it is easier to buy; however when a sell recommendation or a
> negative posture is assumed it is not piecemeal--it is sell all.
>
> the answer to the question as to when markets trend or not may reside in
> the markets that are traded. if they are foreign or limited source
> markets, they are more likely to trend whereas domestic markets or those
> with bountful suppliers are more likely to trend. look at most trend
> follower cta's. typically, they have wide exposure to many many markets
> uncertain as to what markets will trend but there in anticipation. the
> outlyers which do trend more than make up for those which range trade.
> typically, accuracy as low as 25-30% can be bailed out with the few
> trending markets and positive returns produced.
>
> for example; central bank decisions are not casually arrived at and
> meant to be reversed and that is why their interaction with economic
> summits are so important in establishing trends.
>
> the reference was made to daily price activity bounded by a TD Trend
> Factor level 1 of plus or minus 5.556%. i tend to refer to short,
> intermediate, and long term not within the connotation of time but
> rather price movement. historically, those measures were aptly depicted
> in terms of weeks, months, quarters, etc but what took then to produce a
> 5-10% move may have been months and now could occur in days or even
> minutes. consequently, less than 6% is short term, for example; 7-16%
> move is intermediate, and 17-23% is long term, for example.
>
> best regards,
>
> tom demark
>
> Frank Koch wrote:
> >
> > Hi Tom,
> > very good to know that you still active on this list !
> >
> > about what time frames and markets you are speaking here :
> >
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