Hi Michael, I’ve just read you Trend Following book and enjoyed it. My biggest challenge is what you referred to as the need to be right. I appreciate now that I must change this abs I know it’ll be a rewarding, albeit challenging, journey. I am interested in learning the how of identifying trends. In particular ideas around doing so. I believe that the reversal aspect of a trend will also be challenging but I am quite adapt at developing back tests and systems of rules. I just do not have a solid idea of how to find trends.
It’s not about finding trends. You need:
• Exact rules for selecting your tracking portfolio.
• Exact rules for entering your trades at the right time.
• Exact rules for exiting your trades with a loss.
• Exact rules for exiting your trades with a profit.
• Exact rules for how much money to bet on each trade.
If you have those 5 rules you will invariably ride trends, but you don’t just find trends.