If you want to find long running trends | stockbee


If you want to find long running trends

Lot of people are attracted to the concept of trend following . Often trend following methods are promoted as if they are cure to all your trading problems. 

The reality of making trend following work for you might result in large drawdowns unless you know how to make it work.

If you want to be trend follower study long running trends that last months or years on thousands of historical stocks and identify key characteristics of stocks on which trend following works.

Long running trends have one key characteristics. They tend to be less volatile. Highly volatile stock that move in momentum burst moves may not be best candidates for trend following methods. Less volatile stocks are best.

Test this for yourself and research it further if you want to be long term trend follower. There is a big edge and idea in it if you can find systematic way to identify the less volatile stocks.

I personally like more volatile stocks that move in sharp momentum bursts. 

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