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Hello Michael,
Your email got me excited and wanted to share my story incase you happen to read it. I heard about your book through a friend recently and ordered it on Amazon – and I am already hooked. I was reading and reading and reading, understood in theory what you said (in whatever capacity I can) until one day I stopped reading and made a google sheet with data on some stocks/commodities, and applied a 200 day moving average rule. It was then when all the theories I had generated in my head about trend following started to take the form of true understanding and the concept became more clear – this was exactly two weeks ago. Since then, I am reading the book with more intent and clarity and I am slowly building my portfolio and have slowly started using trend following in my investments. I still have a long way to go, but thank you for the work you do! Its simple – its as straightforward of a strategy that it can be – to the point that when I tried to explain it to a couple of my friends – they dont buy the idea.
Regarding the biggest trading challenge, here are some key pointers that applied to me:
1) So far not knowing is the biggest challenge – I had no idea about trend following until my friend told me about it.
2) I have always been a classic Buy and Hold Guy – with roughly half a Million Dollars of Investments in index funds and some stocks, all through automation – always brought and never sold till date. Automated investments is boring, trend following from what I hear from you in the book is boring too, and its one of the biggest reason I feel I am getting hooked to it.
The challenges I am trying to solve related to trend following:
1) I am using a 200 day Moving Average – would you recommend using less/more?
2) Having a hard time picking up investments – no idea about how to invests in currencies, eurodollar, inr/dollar, steel, Japan’s Nikkei and other non-stock investments, trying to do some research on the same and expanding my horizons.
3) My google sheet that shows trend is robust – all it needs is plug a ticker name – and I can easily see the trend and make a buy/sell decision (manually still) – the key challenge is identifying these diverse investments.
4) I work at a Bank for an IT product and have access to Trade Data (I dont understand shit about it though), but my bank imposes a 30-day holding period – this policy has definitely created some resistance in my head my to pursue trend following, but its too early to tell. I am in this for the long run.
5) Also getting confused about making decisions in investing in stocks like SpaceX – dont care if its ivolatile, dont care if its risky, but trying to understand how does trend pattern fit into new stocks like this? Do you just reduce the moving average to a month in such cases? Or just ignore it completely until you have sufficient data?
Hope to hear your insights on the same. Thank you once again for the work you do, I have also started listening to your podcasts recently, and would continue diving into this methodology in more depth and apply it in my investment strategy.
Regards,
Rishab K.
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