Trend following, at its core, is very straightforward. It is simple. There are factors outside of trading that play into it, but that fact doesn’t take away from its simplicity. What is trend following not? Trend following is not day trading, trading only one market, or prediction.
Trend following is also known in the academic world as time series momentum. Michael suggests two white papers to check out: “Time series and cross sectional momentum strategies under alternative implementation strategies” and “Time Series Momentum.” These two papers do a great job of laying out the academic foundation for what trend following is and why it works.
Michael ends the podcast defining why he records Trend Following Radio.
In this episode of Trend Following Radio:
- Bayesian thinking
- Time series momentum
- Death cross
- Emotional drama
Mentions & Resources:
- “Time Series Momentum”
- “Time series and cross sectional moentum strategies under alternative implementation strategies”
- Alison Gopnik