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Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: smchan who wrote (7994)	6/4/2000 1:27:00 PM
From: Dr. Stoxx	Respond to of 39683

A few words in response to Trader Alan's comments (see his reply to the link Sam posted): a) he is one of the best in the business, as is witnessed by his brilliant hardrightedge.com site (to which our thread is linked, BTW), and so I would take his comments seriously; b) he is absolutely right: we are exploiting a certain kind of market inefficiency (trader/investor indecision in a 2-3 day cycle); and once this changes, the nature of our success will likely also change; c) and if the market and most of the stocks in our stable go flat, we are dead: nowhere to go but broke; d) but having said all that, I have a very qualified, reserved hint of confidence that we will continue to see modest to very high degrees of returns with this system for the following reasons: i. general market efficiency does not rule out the existence of specific market inefficiencies; and all we really need to succeed is one or two good stocks showing this kind of indecision (I think it is fair to say that we've now proven to ourselves that we can screen well for these types of stocks); ii. MAX reversal systems can make money in efficient markets, as long as they trend, one way or the other; and particularly if we go with the addition of trend analysis to our present signal system (as we were talking about earlier today)...i.e., one which would keep us out of countertrend plays...we should be able to maximize our gains; iii. and finally, in a nontrending market, nobody makes money anyway (except the options sellers, which I decidedly am not). Just some thoughts, TC