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Two Simple Guildelines to Follow When Trading For Others

Feedback:

Hey Michael, I’ve finally gotten to the point of developing programming models that show high rates of return over time using EMA crossover systems, I’m curious what advice you have going forward in terms of potentially getting into the industry professionally.

Make money.

And find clients who like what you do. Anything more than that is inefficient.

Talking Loud and Saying Nothing

This email came in:

I am an avid listener of you podcast, I have read and seen much of your material and I have to say enjoy your controversial approach. I find it hilarious how you poke fun at the technical charting ‘fan base’, but like the many I have to say I would disagree that trend following is the only proven way. In short, I think we both agree risk management is the key to longevity whatever style you adopt, from many of the legends have been quoted that the style of trading is not the issue but finding a system which suits your personalty is critical. As 90 percent of any trade is psychological any system in the wrong hands is doomed to fail if executed emotionally even trend following. There are many famous technical traders all of which would have there profit and loss available to see from the same resources you produced when showing all the successful trend followers. I don’t think your argument towards the technicals is valid, but l do agree that trend following works and is a great trading strategy, l just think its a little naive to think its the only one. Keep up the good work, I really like your material.
Regards
James

Where is the data for the predictive technical analysis traders? Send me the decades of performance data. James Brown, and I say this with a smile, saw it:

Manage Your Money or Someone Else Can

Not interested in trading your own money? There are plenty of trend following firms out there to choose from. Some feedback:

I’m reading your book Trend Following, and I’m a believer. I’m not interested in becoming an expert. I would rather have someone do the investing for me, but I don’t see on the website any links for investors who want someone else to manage their funds. Have you got any options for me?

Thanks,
David

My five books are filled with ideas for those who might manage your money. I am not currently in the recommendation game.

An Investor Checklist

Barry Ritholtz offers an investor checklist of the most common errors investors make:

1. High Fees Are A Drag on Returns
2. Mutual Fund Are Inferior to ETFs
3. Reaching for Yield is Extremely Dangerous
4. Asset Allocation Decisions matter more than stock selection
5. Passive is usually better than Active Management
6. You must understand “The Long Cycle”
7. Behavioral Issues Are Costly
8. Cognitive Errors as well
9. Understand your own risk tolerance
10. Pay Guys Like Me For the Right Reason

White Ritholtz was clearly not writing with only the trend following trader in mind, many of these are spot on for trend following.

The Visual Way to NOT Be a Trend Follower

This is not the trend following day:

A top trend following office resembles that of an attorney, CPA or insurance salesman–no busy types glued to screens pretending to be masters of the universe. Trend following is an intellectual game, not a software/screen/juice game.

Note: Before someone screams bloody murder, of course for some multi-billion dollar fund there might need to be more daily execution issues, but the trend following itself is not about being connected to a screen 24/7.

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