Trend Following 1: How Markets Really Work

This episode explores trend following, a contrarian investment strategy focusing on identifying and exploiting market trends, irrespective of fundamental analysis. The author contrasts this approach with the Efficient Market Theory (EMT), arguing that EMT ignores significant market events and human behavioral factors. Several successful trend-following traders are profiled, highlighting their methods, risk management techniques, and philosophies. The text emphasizes the importance of discipline, systematization, and accepting drawdowns as integral to long-term success in trend following, while also examining the historical context and psychological aspects of market behavior. Ultimately, the text advocates for trend following as a robust, data-driven strategy capable of generating substantial profits over time.