Trend Following Conversion

One of the most common questions I get asked is, “Will trend following work for me?” Potential clients want to know if trend following will work in their country, in their market, if they have enough start-up capital to be successful, etc. If you find yourself asking this same question, then consider one of my favorite retorts:

Over the years, my firm’s trend following research work has put me in contact with thousands of investors and traders spread across more than 100 countries. That was never expected with the simple launch of a five-page web site in late 1996 titled®. Back then I paid a 22-year old programmer $4,000 for that bit of web design. He quickly disappeared back to Russia, and I became a self-taught HTML coder.

Today, out of that humble beginning, there is no one type of person who reaches out for trend trading insight. Readers and clients include men and women, young and old, from college students to billion-dollar hedge funds. My sites have become a central clearing for all that is systematic trend following trading.

One of the most interesting aspects of spreading this gospel is conversion. People who once viewed trading one way, but who were influenced to change via my work. An example? A new client signed on recently. He has a very popular national radio show and has been working with private clients for decades. His specialty? Putting his clients’ money to work using fundamental analysis. How much trend trading experience did he have prior to my books? None that I am aware. My research firm helped him to move in the right direction, but that was not what especially struck me in this case.

He was very open in telling me why he became a client. There was one basic reason: After the market bottomed in Spring 2009, he saw no fundamental reason for equity markets to trend up, but they did. He decided at that moment, and in the context of seeing my books, that he needed new tools to deal with that clear discrepancy as soon as possible.

Our conversation and exchanges were inspiring. After decades of providing a service to his clients, he knew something was wrong. He understood that he had to make an adjustment in his business. Not many people do that. Many are like the arrogant professors at the University of Chicago believing markets are efficient, people are rational, and it’s my way or the highway. Don’t be like the professors. Be a sponge. Be open to the new.

Chapter excerpted from my book Trend Commandments.

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. Out April 24th 2017.

2 thoughts on “Trend Following Conversion

  1. The markets are constantly changing so its pretty good he didn’t stay stagnant. As for professors, there’s a reason they’re professors. Haha.

  2. Just give them a simple Yes or No. You have a proclivity towards dancing, but the questioner does not want a dance.

    The answer to one posing this question is: Yes.

    Trend following will never not work. It will never be broken. But do you, questioner, understand precisely what it means to trend follow and correspondingly manage risk?

    Respectfully, the fact that you even pose the question, sir or ma’am, implies you do not. Your question is analogous to one asking if they mix the prescribed ingredients and bake the resulting batter will they get a cake. Will it work? Yes, the recipe works. Doubt it? Observe the myriad of successful bakers (i.e. trend following fund managers) who bake this cake every day.

    If trend following didn’t work for you, questioner, then you weren’t trend following.


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