Monthly Archives: September 2005

Predict v. Follow Feedback

Feedback from author of Predict v. Follow: “Hello Michael, I just wanted to let you know that it was my quote you used. I’m glad to further the discussion on your website since it has helped me greatly. Thought I

Posted in Trend Following

Kelly Formula, Bell Labs, Data Transmission and Optimal Bet Size

Read the new book Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street by William Poundstone. Review of book at BusinessWeek. More on the Kelly formula.

Posted in Risk Management

Predict v. Follow

I was forwarded this quote that addresses the idea of technical analysis and where trend following fits into the grand scheme: “From John Murphy’s book technical analysis is defined as the study of market action, primarily through the use of

Posted in Trend Following

Intelligence Analysis

Richards J. Heuer, Jr. wrote the free online book Psychology of Intelligence Analysis for the Center for the Study of Intelligence at the United States Central Intelligence Agency. The relevance to great trading and great traders is straightforward. Here is

Posted in Psychology

Negative Side of Emotion

Yesterday I mentioned the recent research “Investment Behavior and Negative Side of Emotion” published in Psychological Science. You can purchase that article online here for $26. I make no money from this and have no relationship with the publisher or

Posted in Psychology

Functional Psychopaths

From Bloomberg today comes an article that firmly backs the importance of the emotional component needed to be a great trend follower (or any trader for that matter): “Functional psychopaths” make the best investment decisions because they can’t experience emotions

Posted in Psychology

Jim Cramer Redux

I wrote recently about having seen Jim Cramer’s TV show Mad Money for the first time. Yesterday traveling down to South Florida, I saw his show again on the plane’s TV. It’s one thing for Cramer to do this show

Posted in Holy Grails

Shrinking Risk – No.

A good quick read (PDF) about how rather than shrinking risk, the behaviour of following the herd by investors adds to it.

Posted in Risk Management

Where to Go?

Today I received: “As a UK resident, I’ve just read the excellent book on Trend Following. To cut things short, re. the advice on p. 246, can you advise me how to find a trend following trader to trade for

Posted in Trading 101

Benefits of Managed Futures

The Benefits of Managed Futures 2005 Update from the Center for International Securities and Derivatives Markets.

Posted in Trading 101
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