Category Archives: Trend following
It is an empirical fact that trends develop in financial price series. But it is also an empirical fact that in recent years profiting from trends has not been easy. People with skin-in-the-game know that trends and trend-following are not … Continue reading
CTAs have been unable to profit this year according to official sources, adding to a long streak of disappointing returns in recent years. This is despite some notable downtrends in bonds, gold, commodities and currencies this year. Based on statistical … Continue reading
According to comments made in the past by experts, a drop below the 200-day moving average is important. But paying too much attention to expert comments from the past can cost money when market dynamics change.
Market timers profit at the expense of buy and hold crowd when there is an orderly crash followed by a V-bottom recovery. The chart below demonstrates these facts.
Arguments in favor of market timing usually rest on the existence of the momentum premium anomaly and empirical analysis that shows it can be captured with relatively simple strategies, such as moving averages and price rate of change. However, these … Continue reading