Trend-Following Demo – Introduction

I began this trading blog back in October 2010. It was an easy and happy time to write as the markets were good, I was trading well, and there were so many thoughts I had yet to put down in writing. Now, I feel the quality of writing has declined significantly since there’s pretty much nothing different between my blog and all the other trading blogs out there. Well, I feel I started on a positive note, and that’s how I’d like to end it as well. I want my few loyal readers out here to know how a trend-follower thinks and trades. If you like what you see, do independent research, find the best parameters for you, backtest and may the trading gods be with you! If you do not like what you see, look no further. If that is the case, I would not advise you to take up trend-following. Perhaps a different trading strategy would be better suited for you. So here’s something you will not find in other trading blogs. May it enrich your view of the markets, and maybe someday even your pockets. Please keep in mind, this system is not optimized in any way. It’s just bits and pieces of various trend-following systems. I just want to show you how these things work. Let’s go:

ENTRY: New 20-day high; EXIT/STOP: 10-day low; RISK PER TRADE: 2% of portfolio; MARKETS TRADED: PSEi index stocks only.

Yes. A trend-following system can consist of as few as 4 simple rules only. I consider this a primitive, high-risk, short-term trading system. I suspect it may generate up to triple digit % gains in a good year, but also lose up to 90% of capital in a bad year. I’ve done no backtest but believe that over the long-term it should generate profits. Personally, I’d never trade a system like this as it’s too fast and volatile for my liking. This is for illustration purposes only. All trades are hypothetical and the system and its hypothetical trades are not recommendations to make any particular trades. As simple as they are, trend-following rules can be very hard to follow. All I’m saying is, trend-following is the trading style I love, and over the next month, I’m going to be showing you around how these things run (and some of my thoughts about them). Trade carefully. Caveat emptor. These are the final days of this blog. Happy reading!

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3 Responses to Trend-Following Demo – Introduction

  1. noon says:

    Dont stop writing. Continue blobbing. =) And it’s not for others to benefit, it’s ultimately for you. =)

  2. hey abi, good post! I’ve been doing the same thing for about three months already. Why are you going to stop writing?

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