Are You Suited to Trend Following

Discussions about personal psychology for the individual trader.

Trend Followers Profile

3 of 3
32
36%
2 of 3
35
40%
1 of 3
21
24%
 
Total votes: 88

Kiwi
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Are You Suited to Trend Following

Post by Kiwi » Tue Jun 01, 2004 4:48 am

Personality and Trend-Following by Brett N. Steenbarger, Ph.D.

Low on N, Low on O and High on C = 3 out of 3.

Take the test to understand the results 8)


PS. I was 2/3 ... too high on O
Last edited by Kiwi on Tue Jun 01, 2004 12:16 pm, edited 1 time in total.

Forum Mgmnt
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Post by Forum Mgmnt » Tue Jun 01, 2004 5:14 am

Low on N, High on O, Low on C

That makes me 1 for 3.

The Low on C comes from my being High on O and easily bored with doing the same thing all the time. That's why I quit trading initially, and why I do research rather than sit in front of a screen waiting for trades to stumble by.

Fortunately, I am extremely low on N which means I'm not easily destabilized.

- Forum Mgmnt

richard
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Post by richard » Tue Jun 01, 2004 10:19 am

low on N
1/2 on O
low on C

I guess I am with c.f. here, as I feel the same way about myself. I am easily bored with routine. I do have numerous outlets for my creativity other than trading. But I am also in the mode with respect to trading where I'm trying out various things that seem to suit me. I guess this is the time for openness!

Gene
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Post by Gene » Tue Jun 01, 2004 11:54 am

Good article to do some self-assessment.. Thanks for that!!

Low on N
Even on O
Low on non-C implies -> High on C

Very even demeanor, appreciate what data say, follow system with conviction - else confused what the system says about the data and consequently not in the market - which is why I find VT such a great tool!

Gene

NeueZiel
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Post by NeueZiel » Tue Jun 01, 2004 3:07 pm

This same darn test was in Mike's book....

Old European
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Post by Old European » Tue Jun 01, 2004 4:56 pm

Reasonably low on N, reasonably low on O and reasonably high on C: 3 out of 3! Should therefore have the potential to make it as a mechanical trader :D .

But I also know that I'll have to keep my feet on the ground :wink: : only reasonably low on N, reasonably low on O and reasonably high on C.


Old European

damian
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Post by damian » Tue Jun 01, 2004 5:55 pm

I could have told you, myself, anybody, that on a daily basis my character is not suited to trend following at all (according to the boundaries in this article).

Strange thing is that I have had no problems at all trading in a trend following manner over the last 8 years or so, including mechanical, discretionary and on a fundamental basis. I enjoy trend following and feel way more comfortable with it than most people I have worked with.

My opinion is this: my character in my social and ‘outdoors’ life has no meaning in my 'trading' life. I would never approach trading in the same manner that I approach most other things, it wouldn't be right for me at all. What’s more, I would not enjoy trading in the manner that I enjoy other aspects of my existence.

In fact, one of the reasons that I do choose and enjoy trend following is because I know that I score "poorly" on a test like this. I know myself: I know I enjoy a risk and a thrill, so I avoid risky and thrilling trading styles else I might get carried away. I know that I can be overly emotionally influenced by a negative event, so years ago become reconciled with the fact that a losing trade is all part of being in business. It has been years since I cared about a loss anyway. Sometimes I think I care too little! Trend following allows the ‘negative event of a loss in the market’ ro be spaced out and thus all the more easily handled. I know that I avoid duty, dedication and responsibility, which is why I like trend following! Trend following requires one to commit. Short term trading would simply be feeding my short attention span and lack of duty and dependability. These are not good traits so there is no way that I would choose a trading style that augments them.

My results in this test do not worry me at all. But to remain honest to the topic, what does worry me is this: trend following is long and slow and money is lost over months. Plus winning % is low and deep draw downs are normal. All of this allows one (myself) to avoid facing up to reality as reality happens so slowly. Trend following caters to the desire for avoidance. Imagine having 12 months worth of LTTF trades condensed into 2 weeks of short term trading and the result was a 40% draw down. That would have a greater impact and be more arresting than the same result of 12 months. Empty a beach of sand, grain by grain, and one doesn’t even notice let alone think it is a problem. There is a saying like this that is on the tip of my tongue but I cant remember it.

In the meantime, my long term trend following system continues to be not suitable for long term trend following :wink:

Kiwi
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Post by Kiwi » Tue Jun 01, 2004 8:13 pm

NeueZiel, And as always the good stuff is available free with assistance from this site :lol:

Damian, Good set of observations. The hardest thing I have done is step down from daily (easy) to half hourly (pretty easy) to 13 tick where the bar can complete in 15 seconds. This last one has tested me to the limits ... not because the drawdown is fast but because the decisions are almost instantaneous and all your flaws and fears become apparent at speed. I still havent got this one satisfactorily under control.

John

MCT
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Post by MCT » Thu Jun 03, 2004 5:23 pm

What makes a Trendfollower a Trendfollower?

damian
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Post by damian » Thu Jun 03, 2004 6:00 pm

A trend follower is someone who, by trading trends, makes enough money to continue trading. Without this certain level of profit, everything else is meaningless.

A blunter version: A trend follower is any person that makes money following trends. Without this profit you are not a trend follower, irrespective of any other definition or personal quality*.

Others may quite fairly add granularity to this by suggesting qualifying time frames for profit and by expressing net revenue in terms of other metrics, such as magnitude or volatility of X, Y or Z. Be my guest. In the absence of profit, relativity is meaningless. Without profit you have no numerator (or is it denominator? :wink:)

If you are asking "what qualities and resources must one have to make money as trend follower?" then I have to tell you that I have no idea, other than never giving up.

* In my mind, suggesting that one can claim trend follower status without actually profiting as a trend follower is slightly less dramatic however still akin to a person who claims to be a duck hunter, yet has never touched a duck.

MCT
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Post by MCT » Thu Jun 03, 2004 6:13 pm

Others may quite fairly add granularity to this by suggesting qualifying time frames for profit and by expressing net revenue in terms of other metrics, such as magnitude or volatility of X, Y or Z. Be my guest. In the absence of profit, relativity is meaningless. Without profit you have no numerator (or is it denominator? )
We are all (all successful traders) trendfollowers then?

I was hoping for a more technical answer from the stand point of the strictest definition ...

I agree with you, any proven trader is a trendfollower ... no trend, no money.

K1
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Post by K1 » Fri Jun 04, 2004 3:48 am

Oxford concise dictionary:

Trend- Origin: Old English - trendan ' revolve, rotate'

1: a general direction in which something is developing and changing 2: fashion.

Follower- Origin : Old English - folgian

1: a person who follows 2: a supporter, fan or disciple

damian
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Post by damian » Fri Jun 04, 2004 4:14 am

MCT - no, not at all. We are not all successful trend followers. I am not sure how you reached that conclusion from what I said. My point was nothing more than this: a trend follower is someone who makes money as a trend follower and no amount of definition is going to change that fact.

Please don’t be frustrated by me. Your question is perfectly fair and valid and probably deserves a better answer than mine. I however am the type of person that after enough foam and froth likes to find the most basic form of substance at the core of the matter, the meat on the bones if you will. In my world that meat is net profit.

None of this is directed at you as an individual (nor any other forum member) and I concede that I am probably out of place and certainly off topic, not to mention the fact that I have unfairly used your post as a soap box.

No malice intended.

cheers
damian

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Post by sagev » Tue Jun 08, 2004 6:26 pm

Low on N, High on O, High on C

Although it is not decisive for trading success, the test and the article are a very interesting read.

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Post by BigBrad » Thu Jun 10, 2004 9:53 pm

High on C 75%
Low on O 25%
Low on N 0%

In some ways I think of mechanical system trading much like I think of flying an airplane. In the end you break it down into distinct smaller tasks and follow set procedures.

In my thinking you have Airplanes:
Startup
Taxi for Takeoff
Takeoff (Left seat take-off, standard calls, any warning below 80 is an abort [captains discretion above 80], V1 is 120, Vr is 125, V2 is 140, Flaps at 158)
Climb
Enroute
Descent (This is sometimes harder than you'd think!)
Approach
Landing
Taxi to parking
Shutdown

With trading:
Research
Nightly Review
Pattern Setups
Price triggers to action
Stops
Exits

Even with the repetivity I've found ways to make it different and challange my sence of achievement and such, otherwise my opinion is it does get or appear boreing.

p8
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Post by p8 » Wed Jul 07, 2004 3:37 pm

Interesting quiz. If I took the quiz at certain milestones in my trading years the result would vary.

It would be low on N in my first year trading with zero experience but made tons of profit. Ignorance was bliss! It would be high on N when the stock market bubble ended and still trading with no good system. These days it's low on N except when experiencing a relatively large drawdown. Even though expected as part of the system, N would still shoot up. It's a signal to take a good break from trading. Review everything and bring N back to low level again before jumping back into the market.

O and C would be consistent throughout the years.

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Post by Tim Arnold » Tue Jul 13, 2004 10:22 pm

Low N, Low O, High C.

I agree with the idea that if one is into trading for stimulation, the odds of success are diminished. My opinion of course. I have certainly seen people like this, and see where the author is coming from.

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Re: Are You Suited to Trend Following

Post by TradingCoach » Wed Jul 14, 2004 10:15 am

I have read the test. But it is silly. If one has neurotic tendencies he/she should not trade period. Trend following or otherwise. The paper makes it sound like trend following you can't do but other forms of trading, gambling are ok. Medication is the key :)
Kiwi wrote:Personality and Trend-Following by Brett N. Steenbarger, Ph.D.

Low on N, Low on O and High on C = 3 out of 3.

Take the test to understand the results 8)

PS. I was 2/3 ... too high on O

richard
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Post by richard » Wed Jul 14, 2004 11:04 am

I'm probably a lousy trend follower. I am more suited to swing trading at this point I guess.

Ghostrider
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Post by Ghostrider » Wed Oct 27, 2004 1:23 pm

Okay, another interesting topic.
This is great! A laugh out loud for me, thanks for the entertainment.
I don't see how a persons food desires or rollercoaster rides relate to their ability to trading trends succesfully, but hey, he is a doctor, or is his first name doctor?

:P

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