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Feedback in:

Michael, Do you know of any good research or discussion / interviews about whether to trim or sell all? It seems the answer depends on 1) your conviction in your trend signal 2) willingness to look different and 3) desired level of protection. 100% long or 100% cash, up or down, buy or sell, makes sense to me. Across many assets, of course. Yes, whipsaws hurt a bit more that way, but so what. Trimming to say 50% seems chicken-shit and too concerned about career risk, looking different than the benchmark. Yes? Let’s say we break down the global stock market into 10 pieces. It doesn’t matter how, could use sectors, could use US/INTL, could use Growth/Value, whatever. But they all add up to “global stock market”, my bogey or benchmark. Then, for simplicity, let’s say they’re 10% each (they wouldn’t be, but.). Do we trade 0% to 10% in each one? 5% to 10% in each one? If ALL were in downtrends, could have 100% cash (so what, right?).

Thanks,
Chris R.

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.

That is a start to solving your issues. You will also need to get beyond stocks alone.

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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Feedback in:

To answer your question, my biggest challenge is to find the bottom of the current bear market.

Regards,
Tamas

No one has that ability. Trend following doesn’t do that.

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How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
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• Trading Technology
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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Feedback in:

I’m just finishing up reading the 2017 edition of Trend Following and it occurs to me there may be other mathematical models for trends. Suppose price were not modeled as a statistically random variable but instead as some sort of mechanical vibration. Perhaps the nature of trading is such that price vibration or noise could be modeled by a sine wave with appropriate parameters for different markets. I was thinking a trend would be recognized when the price movement over a given number of time periods exceeded the previous price plus the sign wave value. Perhaps the price could also be required to exceed an expected return plus inflation to meet the definition of a trend. P(t1) >= abs[ P(t0) (1 + x sin(t0) + expected rate of return per time period + rate of inflation per time period)]. Price could be given a speed equal to rate of change per time period and a momentum equal to volume of trading or contracts outstanding times speed. There are also mathematical models from communications theory for signal to noise ratio which might be useful. Modeling price as a mechanical system should enable trends to be analyzed with differential calculus which could be enlightening and rewarding. Perhaps these ideas have been considered already. I have only read the one book. I didn’t see a mechanical modeling approach mentioned. I enjoyed the book. During the 1970’s and 80’s I sat at a desk writing computer programs to do calculations. Applications ranged from management systems to design and analysis of experiments in agriculture. I played with investing formulae on weekends. The experiences of contemporaries described in the book brought back fond memories. Thank you.

Watt

Why do you want to make it more complicated than price alone?

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How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
• Crisis Times
• Trading Technology
• About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Subscribe to Trend Following Radio on iTunes

My guest today is Elaine Fox, a professor of Psychology and head of the School of Psychology at the University of Adelaide. A leader in research on the role of cognitive mechanisms in mental health across the lifespan, Professor Fox’s work focuses on the nature of human emotions and why people respond differently to adversity and success. She has published over 120 academic papers in peer-reviewed journals or edited volumes.

The topic is her book Switch Craft: The Hidden Power of Mental Agility.

In this episode of Trend Following Radio we discuss:

• Why she chose Donald Trump as an example
• Intellectual humility
• The supremacy of social media tools
• Rigid mindset into a growth mindset
• When is it necessary to be gritty
• Measuring mental agility
• Explaining dialectical behavioral therapy
• How do we get people to be more agile?

Mentions & Resources:

• Elaine Fox
• Switch Craft: The Hidden Power of Mental Agility
• Kevin Dutton
• David Ricardo
• Ronald Reagan
• Mikhail Gorbachev

Listen to this episode:

• Listen to this podcast on iTunes. (Please leave a rating!)
• Listen on Spotify.
• Listen on Stitcher.
• Libysn RSS.
• Download as MP3 by right-clicking here and choosing “save as.”
• Free Video.

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Feedback in:

My biggest challenge is emotional balance.

Rakesh P.

What is your exact strategy and time frame now?

Trend following—Buying pullbacks above 200d EMA. 5 min for short term. 1 day chart for investing.

Buying pullbacks is not trend following. 5 minute anything is not trend following.

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How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
• Crisis Times
• Trading Technology
• About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Feedback in:

Hi Michael, Thanks for your interview with Tom Basso. Enjoyed listening to it.

I met with my finance guy yesterday, and with that recent visit in mind, it dawned on me. The financial industry can’t acknowledge trend following to work. Why? The majority of people in the industry would be lost. They don’t know how to do it. The industry has to maintain the “on average” thinking, meaning “on average” the markets go up over time. It’s crazy how their answer is “they always go up.”

Take care,
Matt P.

True.

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How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
• Crisis Times
• Trading Technology
• About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Feedback in:

Hello Michael,

I am new to the trend following approach. I am listening to your Trend Following book currently. What I have not seen or heard just yet are the time frames recommended and the signals some trend followers like to use to identify a trend, find an entry and identify when a trend is over. Those are my main challenges to understanding the approach currently. I day trade and swing trade Crypto now but I want to expand to other asset classes. I have enjoyed listening to your book so far and want to know more about trend following.

All the Best,
Richard D.

Trend following is not day trading. Trend following is not swing trading. Trend following is daily or weekly bars.

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How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
• Crisis Times
• Trading Technology
• About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.