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?

Trend Following Products

Review trend following systems and training:

Michael Covel Trend Following Products
Michael Covel Trend Following Products

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