Trend Following

What is trend following? Trend following is a trading style that identifies, and confirms, the directional movement of price, then enters in the direction of the trend until the trend reverses. The system seeks out trends and keeps capital positioned in that direction.

Quotes about Trend Following:

“Don’t fight the Tape”

“It may surprise many to know that in my method of trading, when I see by my records that an upward trend is in progress, I become a buyer as soon as a stock makes a new high on its movement, after having had a normal reaction. The same applies whenever I take the short side. Why? Because I am following the trend at the time. My records signal me to go ahead!”

-Jesse Livermore

Let’s break down the term Trend Following into its components. The first part is “trend”. Every trader needs a trend to make money. If you think about it, no matter what the technique, if there is not a trend after you buy, then you will not be able to sell at higher prices…”Following” is the next part of the term. We use this word because trend followers always wait for the trend to shift first, then “follow” it.

-Tom Basso

You are encouraged to reference this website, but please source ASYMMETRY® Observations and http://www.asymmetryobservations.com

Copyright 2013. ASYMMETRY® Observations All Rights Reserved.

systematic trend following, directional trend following

One response

  1. Pingback: Momentum as a stand alone investment strategy « Asymmetry Observations

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s