Some trend following critics have expressed a familiar sentiment:
…the consistent volatility [and drawdown] of these systems makes it an untenable strategy, at least for me.
It’s true that trend following is untenable for those that cannot stand the feelings of being in a drawdown. For those that are ok with drawdowns, perhaps an untenable strategy is one that avoids volatility at all costs, thereby effectively avoiding large returns as well. Great trend followers have seen drawdowns come and go. They also know the kind of returns that typically follow periods of drawdown. Maybe that helps them stay on their system. It constantly amazes me that during the good times everybody wonders how these folks make so much money, and during the drawdowns everyone wonders why those guys are so stupid as to keep trading those obviously “dead” strategies.
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