Formal Name: Russian Federation
Local Name: Rossiya
Local Formal Name: Rossiyskaya Federatsiya
Trend Following Investment Research
Trend Following Investment Research is a publisher of trend following trading strategies reaching thousands of investors globally. Our unique edge is an extensive network within trend following, behavioral economics and risk management. This allows us to teach decades of outstanding performance. Our approach is to provide customers with a single product requiring no extra purchase. Delivering a comprehensive service of trading systems, risk management strategies and psychological guidelines allows our customers to trade in less than thirty minutes per day. Giving us your money is giving us your trust. And our goal is always to make sure that what we give you is more valuable than what you give us. That straightforward business principle is the foundation of our long-term relationship with all clients.
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Russia and Systematic Trading
Russia is one of the world’s largest producers and exporters of crude oil, natural gas, wheat, metals, and fertilizers. Its commodity export economy makes Russian economic conditions a direct driver of global commodity price trends. When Russian energy production changes, when geopolitical events affect Russian export flows, or when sanctions alter the structure of Russian commodity markets, the price effects propagate through global futures markets that systematic trend following approaches monitor. A systematic trader positioned in global energy, agricultural, and metals futures is capturing Russian economic dynamics as price trends regardless of whether they can directly access Russian domestic markets.
The 1998 Russian sovereign debt default is one of the most significant events in the history of systematic trend following. Russia defaulted on its ruble-denominated debt in August 1998, triggering a global flight to quality that produced sustained directional moves in currencies, bonds, and equity markets worldwide. The ruble collapsed. Long-Term Capital Management’s convergence positions, which depended on global market correlations returning to normal, were destroyed by the divergence the crisis produced. Systematic trend following approaches that followed price trends through the crisis captured the returns that the convergence traders’ losses funded. The 1998 crisis is the episode that the PBS LTCM documentary documents from the loser’s perspective. The trend followers’ perspective is documented in the August and September 1998 performance tables throughout TurtleTrader.
Russia’s domestic financial markets, including the Moscow Exchange (MOEX) and the trading of OFZ government bonds and ruble-denominated futures, have developed significantly since the 1990s. For global systematic traders, the most relevant instruments are the ruble’s exchange rate dynamics in USD/RUB and EUR/RUB markets, the energy price relationships that Russian production affects, and the wheat and fertilizer markets where Russia is a dominant global supplier. Each of these produces the sustained directional trends that systematic rules capture when they materialize.
Russia’s recurring geopolitical episodes produce some of the most dramatic and sustained price trends available in global markets. The 2014 Crimea annexation, the subsequent sanctions cycle, and subsequent events each produced large, sustained ruble depreciation trends and energy price dynamics that systematic trend following approaches were positioned to capture. The approach does not require predicting geopolitical outcomes. It requires following the price trends those outcomes produce, which is exactly what systematic rules do.
For Russian traders accessing global futures markets, systematic trend following provides diversification from ruble concentration and from the energy sector dominance of Russian domestic equity markets. Trading global instruments in USD-denominated accounts provides natural currency diversification against ruble depreciation, which has been a recurring feature of Russian financial history.
Frequently Asked Questions
How did the 1998 Russian default affect trend following returns?
The 1998 Russian sovereign default triggered a global flight to quality that produced sustained directional moves in currencies, bonds, and equity markets worldwide. Systematic trend following approaches that followed these price trends captured the returns that corresponded to the losses of convergence strategies, particularly LTCM, which were positioned for correlations to normalize rather than diverge. August and September 1998 were among the best months on record for major trend following managers.
What global markets most reflect Russian economic conditions?
Crude oil and natural gas prices, because Russia is one of the world’s largest producers. Wheat futures, because Russia is the world’s largest wheat exporter. Fertilizer markets, because Russia is a major producer of potash, urea, and ammonia. The USD/RUB currency rate, which reflects Russian monetary conditions and geopolitical risk. Each of these markets produces sustained directional trends when Russian supply or policy conditions change, and systematic approaches capture those trends through globally traded futures instruments.
Why does geopolitical risk in Russia produce systematic trading opportunities?
Because geopolitical events produce sustained, directional price movements rather than instantaneous adjustments. When sanctions are imposed, the adjustment process takes months as market participants restructure supply chains, financing arrangements, and currency hedges. This sustained adjustment process is exactly the multi-month directional move that systematic trend following is designed to capture. The approach does not predict which geopolitical outcome will occur. It follows the price trends those outcomes produce.
Trend Following Systems
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