Trend Following - Part 1: The Philosophy and Practice

This episode offer an extensive exploration of trend following, a systematic trading strategy focused on price action rather than fundamental analysis or prediction. The text covers core trend following principles, emphasizing the importance of cutting losses quickly, letting profits run, and accepting small, frequent losses as the cost of finding large trends. It also features interviews and insights from prominent, successful trend followers like Ed Seykota, John W. Henry, and Bill Dunn, highlighting their reliance on mechanical, quantitative systems and risk management. Finally, the sources contrast trend following with conventional finance theories like the efficient market hypothesis and buy-and-hold strategies, asserting that trend following thrives during unpredictable market crises and "black swan" events