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The Truth about Trend Following

Trend following is no get rich quick or retirement in a box. The truth about trend following is that 70-75% of the time nothing happens. It is like a baseball game that inning after inning there are no home runs or in a football game no score. However at the bottom of the 9th inning or the last seconds of a football game there is a touch down. This is trend following. There is no constant action. The majority of the time nothing happens other than small losses…small profits..( as long as you try to avoid the big losses). Only in rare times you have a trade really work. Because of this most traders can not follow a trend following approach. They get frustrated and aggravated. They eventually quit. They think they want a 1% a month trader like Madoff until they blow up. Change your attitude. Accept the uncertainty of trend following. Once you do this…you put yourself in a position to be available for upcoming trends.

Trend following has been around for decades. There are those who say trend following is dead. However no one rings a bell when trends start. More so trends can carry on much longer than anyone would assume. Trend following is a lifetime strategy for me and my children.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts, commodity options or forex can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

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2 comments to The Truth about Trend Following

  • I completely agree, that is something I learned myself when starting to trade. I view it like fishing, in that it’s pretty boring and slow until you catch something big…

    • andrabr9

      I use that analogy as well….if the fish are out there I am confident I will catch something…if not fish ( trends)…I need to just tread water…
      Best
      Andrew

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