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Hi Michael,
I have recently discovered you and your work through the Trend Following book (although I was familiar with the turtles), and I have to start by thanking you for your great work. Your podcast are just golden, and the whole content from the website is just top quality.
I am replying just to share my biggest concern regarding trading, not expecting to find a definitive answer, and that is the problem of inductive reasoning. All backtested results and all systems that have been wildly successful in the past cannot mitigate the fact that there is no fixed underlying distribution from which the events are drawn, so one cannot be confident that what has been working for the past 500 years will continue to work for the next 500.
That might sound farfetched, but having a somewhat obsessive personality really creates some level of discomfort. The remedy for this is acknowledging the fact that human behavior, the ultimate catalyst for market moves, is and expected to remain unchanged. So at least trend following strategies with sound risk management should be expected to give a long lasting edge, as they are based on the “big picture” of what moves the market.
Thank you for taking the time to go through my thoughts, I would love to hear your take on this.
I wish you a lovely day!
Kind regards,
Dimitri K.
My Trend Following book 5th edition counters this 500 year view. In detail. 220,000 words.
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