Feedback from New Trading Manager

“In response to some of the guru comments you posted in your newsletter last night, I have inserted a quote from “Reminscences …” … “The big men of The Street are as prone to be wishful thinkers as the politicians or the plain suckers. I myself can’t work that way. In a speculator such an attitude is fatal. Perhaps a manufacturer of securities or a promoter of new enterprises can afford to indulge in HOPE-JAGS”. I am a student of your trend following course and an avid reader of your newsletter. I’m currently going through the CTA registration process with the NFA. As I put the finishing touches on my Disclosure Document I am both puzzled and relieved by a comment on the NFA website (all in all I believe the NFA has done a great job guiding a start-up through the registration process), the comment states that when coming up with a trading methodology, to be original, “the world doesn’t need another trend follower”. Puzzled by why they thought it necessary to rebuke a solid trading methodology and relieved that there will always be someone on the other side of my trades. Whether it’s very short intraday trends, betting on spreads getting tighter or wider, medium or long term trends, trading pairs, even value guys have to have trends to make money, my point is call it what you want, the entry is hardly relevant as long as you have a program that’s consistent and gets you involved – what sets the successful apart from the rest is risk management, as you say over and over, “how much?”. Get involved on any signal you want, breakout, moving average crossover, fundamental valuation if you must, but for God’s sake, know your downside and set your stops, cut your losers let winners run, have a strict system for position sizing and don’t get married to your ideas of what the market is going to do in the future, that as Ed Seykota is fond of saying, simply doesn’t exist anywhere, but your head. As I am having meetings with former colleagues to begin raising capital, I am befuddled by some really bright guys sticking to their guns, that it’s not necessary to play around with futures trading and trend following systems, we buy companies now because we know that 5 or 10 or 15 years from now those companies, that make up the bright and shining S&P500, will be higher – they just will be, they always have in the past. HOPE-JAGS! Trade as a trend follower, sleep at night, end of story. Thanks for a great newsletter…”

You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.