“Algorithmic trading programs dominate while human manual trading is…”

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Dear Sir,

I hope you are doing well. I am a student who lives in South Korea with a keen interest in trend following and have been reading your books.

I would like to pose a question regarding the relationship between algorithmic trading programs and trends. Many people assert that trend following will remain valid indefinitely because human nature remains constant. However, to the best of my knowledge, in today’s futures market, algorithmic trading programs dominate while human manual trading is minimal.

If algorithmic trading programs continue to gain a larger share in the future or stock markets, it raises the question of whether trend following, as practiced by individual traders like myself, will still be effective. This is because trend following relies on the assumption that “human” nature remains unchanged, while individual traders will be pitted against these “programs.”

I am curious about how humans can effectively navigate the rapid changes and whipsaw movements created by many algorithmic programs, using trend following.

Sincerely,
Yushin H.

You follow price. You trade price. All markets are not flat lines with no trends. Trends are everywhere. You are making the case that algo trading has made trend following not viable, but your point is hypothetical, not reality. Whipsaws are not a new concept. They are a fact of life.

The nitty gritty details are here.

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