Posted by icecoldjones on 5th of Apr 2024 at 12:17 pm
The bad part is that I'm not following the STS KISS system yet
and have learned the very hard way that I should have been this
entire time. Once I take all my losses on this short, the STS KISS
is my only path forward.
Posted by DigiNomad on 5th of Apr 2024 at 12:21 pm
Trend following systems work very well in strongly trending
markets (obviously). They don't work as well in sideways
markets. The market doesn't always trend - it can go very
long periods of time without trending. Just keep in mind that no
single system is a panacea for all market types.
Of course Captain Obvious
This is also why very unsophisticated
moving average cross systems get whipsawed to death unless logical
filters are in place to try and take profits early or filter out
trades. Even in trending markets, the whipsaws can kill all
the gains on a simple MA cross system. If you employ my
whipsaw confirmation filter that does greatly improve moving
average cross systems - I need to make an educational video on that
sometime.
The KISS systems obviously do best in uptrending markets as they
are long only. That said, I did spend a lot of time and effort and
thoughts about adding various filters and other things to try and
help them navigate sideways markets quite well, and in a
downtrending markets they stay mostly in cash anyways - all of
these filters help a lot but still obviously they do best in
trending environments.
To me for the market, especially for the indexes: A combination
of trend following and mean reversion makes sense because you then
cover both basis. Trend following do better in times like we've
been in (and of course the market does spend a lot more time
uptrending and going sideways than it does in corrections (which
may only account for 10% of the market). Mean reversion
systems are great of course in bear markets, in higher volatility
conditions, and especially do well in sideways moves.
So the combination of KISS trend following with mean reversion
is a good combo
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
The bad part is that
Me yesterday morning: Man, do I have too many shorts ...
Posted by icecoldjones on 5th of Apr 2024 at 12:17 pm
The bad part is that I'm not following the STS KISS system yet and have learned the very hard way that I should have been this entire time. Once I take all my losses on this short, the STS KISS is my only path forward.
Trend following systems work very
Posted by DigiNomad on 5th of Apr 2024 at 12:21 pm
Trend following systems work very well in strongly trending markets (obviously). They don't work as well in sideways markets. The market doesn't always trend - it can go very long periods of time without trending. Just keep in mind that no single system is a panacea for all market types.
Of course Captain Obvious
Posted by matt on 5th of Apr 2024 at 12:32 pm
Of course Captain Obvious This is also why very unsophisticated moving average cross systems get whipsawed to death unless logical filters are in place to try and take profits early or filter out trades. Even in trending markets, the whipsaws can kill all the gains on a simple MA cross system. If you employ my whipsaw confirmation filter that does greatly improve moving average cross systems - I need to make an educational video on that sometime.
The KISS systems obviously do best in uptrending markets as they are long only. That said, I did spend a lot of time and effort and thoughts about adding various filters and other things to try and help them navigate sideways markets quite well, and in a downtrending markets they stay mostly in cash anyways - all of these filters help a lot but still obviously they do best in trending environments.
To me for the market, especially for the indexes: A combination of trend following and mean reversion makes sense because you then cover both basis. Trend following do better in times like we've been in (and of course the market does spend a lot more time uptrending and going sideways than it does in corrections (which may only account for 10% of the market). Mean reversion systems are great of course in bear markets, in higher volatility conditions, and especially do well in sideways moves.
So the combination of KISS trend following with mean reversion is a good combo