Feedback from a reader who I have been debating with in email:

“Nobody disputes the virtues of trend following trading. Its performances are clearly recognized. The point here is that computer trading models sometimes fail. You recognized that too. Reality is more complex than any model. The problem with gold is that it is a lot influenced by political and economic factors. Obviously these factors are hard to quantify in a model.”

No knock against this man personally, but he has no clue. On one hand he is admitting the viability of trend following, but in the next breath saying you need a fundamental understanding too. I say, “Shit or get off the pot.” These two strategies don’t marry successfully. You are either or.

But perhaps the reason I find his post so useful is that he truly believes he gets what trend following trading actually is, but within a few more words, demonstrates his lack of any conceptual understanding. I post not to pick on him, but rather to educate someone else who might be confused as well.

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.