Trend Following View of the World

Unlike many traders, who typically employ a passive buy and hold strategy, and only depend on rising markets for profit, trend followers use dynamic strategies designed to take long positions (in a rising market) or short positions (in a declining market), to profit from both.

Trend Follower View of World:

  • Unstable world.
  • World is uncertain and dynamic.
  • Market players form rational beliefs but make mistakes.
  • Learning takes time; slower adjustment to information happens.
  • Fundamental changes are often unanticipated.

Non-Trend Follower View of World

  • Stable world.
  • World is knowable and static.
  • Market players generally form rational expectations.
  • Markets adjust quickly to new information.
  • Fundamentals do not change dramatically in the short run.

Given the world market turmoil, which view makes sense to you? Which view is real?

Market Wizard Interviews


  • Jim Rogers with Michael Covel in Singapore.

  • Market Wizard Larry Hite discusses odds.

  • Harry Markowitz on Jim Cramer.

  • Trader Salem Abraham about the unexpected.

  • Michael Covel: Reason TV Interview.

  • Michael Covel in Brazil for BM&FBovespa.

Trend Following

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