I first started trend following 18 years ago. I wanted to know who was succeeding and what they were doing. My broker told me the most successful client of his company was a dentist. He was not a Harvard graduate nor a partner in Morgan Stanley. Yes, he was a dentist! He invested in a robust trend following concept $200,000 dollars in 1979. He let that money compound over time. Today he has pulled out over $12,000,000 over the years and has a $5,000,000 trading account as well as accounts for his children.
The dentist was the exception. Most clients of the brokerage did not make money. Most clients actually lost money. The difference between the majority of the clients that lost money and the Dentist was he had a trading plan with risk management & he followed it with patience & discipline. Even with his plan he always had numerous loses, went through drawdowns and even long periods of time in which he did not make money. However he did not ever give up or start to look for a new methodology.
He did not have any magical Holy Grail formula. He is a trend follower who had a simple robust methodology and more importantly knew how to properly condition his thought processes to get through all the tough drawdowns and long periods that he did not make money More Read More