3 thoughts on “The Trend Following Dice Roll

  1. Great post, Michael. It really reminds me of one of my all time favourite market quotes:
    “There is a random distribution between wins and losses for any given set of variables that define an edge. In other words, based on the past performance of your edge, you may know that out of the next 20 trades, 12 will be winners and 8 will be losers. What you don’t know is the sequence of wins and losses or how much money the market is going to make available on the winning trades. This truth makes trading a probability or numbers game. When you really believe that trading is simply a probability game, concepts like ‘right’ and ‘wrong’ or ‘win’ and ‘lose’ no longer have the same significance. As a result, your expectations will be in harmony with the possibilities.” – Mark Douglas: ‘Trading in the Zone’

  2. that is NOT trend following.
    That is good risk management.
    I can use fibs, gann, moons, cycles, retracement plays, contrarian plays etc etc.. and I still can apply good and efficient risk reward ratios to my strategies.
    Remember, that is called good risk management. it DOES NOT have to be trend following. Cheers.

  3. Risk management is the heart of trend following. The methods you mention, Gann, moons, etc…well…those awake know what those mean.

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