“I’m trying to think through how to effectively employ trend following…”

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Hi Michael, [I’m trying to] find a way to employ a trend following strategy within a market neutral framework with strict risk parameters.

Best regards,
Brian

Why?

I’ve been learning about trend following/swing trading for about 2 years now. Becoming increasingly frustrated with a fundamental approach, I’m trying to think through how to effectively employ trend following concepts within the framework I’m required to work within. Effectively, I can’t lean my longs more than 10% vs my shorts (and vice versa) along with other risk limits on concentration. I’m also limited to the Industrials industry (with some leeway into tech and materials). I’m thinking pair trades (viewing it like a single security) could be the way to go. I haven’t seen anyone write on or employ this trend following/market neutral approach before. I would love to hear any thoughts you might have on the approach or if you’re aware of any literature/other investors that have utilized this approach.

Go trend following. Don’t complicate it. Market neutral is not trend following.

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