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Trader Steve
Trend Following Trader
Trend Following Trader
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Simplicity and robustness - with a word from Larry Hite
By their very nature trend following systems or methods are relatively simple pieces of coding. Read about some of the most successful trend followers in history, and they have even themselves referred to the fact that their rules could be written on the ba...
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Jesse Livermore, the Dow and the changing market state
Below we have the current daily chart of the Dow. This is a classic example of a 'tale of two market states'. Up to the beginning of February, we can see a stable (low volatility), trending state. And from the beginning of February to date, a volatile, non...
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Examples of opportunity loss
Suppose you have a situation where you take an entry signal only for the position to go nowhere, so you end up getting frustrated and close the trade. The next thing you know, the stock takes off in the direction you were attempting to trade, leaving you le...
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Learning from the Turtles experiment - what should you learn first?
The ad that started a legend. An often overlooked aspect of the Turtle Traders experiment was not simply what they got told, but the order in what they got told. We can p iece this together from the various writings about the experiment, including that of t...
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The futility of predictions
Yesterday I had the misfortune to be copied in on an Facebook thread discussing an impending stock market crash, together with an invitation to join the group who were discussing it.  This post had more than 200 comments from a number of traders covering th...
The futility of predictions
The futility of predictions
thetrendfollower.com
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Trend following, robustness and adapting to market conditions
There is a school of thought amongst some traders which says you need to adapt and adjust your chosen method, in response to changes in the market environment. These might relate to the markets you trade switching from a trending to a non-trending state, or...
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Staying in my own circle of competence
Every so often someone contacts me to say they disagree with what I say and my beliefs, that some other successful trader they know of says the opposite to me, or simply to assure me that trend following doesn't work. Well, I have news for you - and them. I...
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The payback for following your rules
Quite often I get into a trade where price starts moving nicely in my favour, before reversing and taking out my stop, leaving me with either a significant erosion of open profits, or may be even taking a small loss.  Not very interesting or exciting I know...
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Volatility issues
Below I have shown a chart of the Dow which highlights the split personality of the markets in recent times. Up until the end of January, we can see the market clearly in a trending, stable (i.e. low volatility) state. From there, the chart is a mess, and t...
Volatility issues
Volatility issues
thetrendfollower.com
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Some thoughts on varying your position size
In my own trading, I use fixed fractional position sizing - that is, while the monetary value of risk per trade varies as my equity goes up or down, I risk the same amount in percentage terms. A while back, a good trader friend of mine experimented with var...
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