There is a lot of bad information in the trading world and the strategy of trend following is often misinterpreted. It can be especially hard for a beginner to get to the truth and that’s why I’ve put together this trend following PDF which you can download for free.
Trend Following 101: A concise guide
If you look at a selection of price charts, it quickly becomes obvious that stock prices tend to move in particular directions – either upward or downward. Often, there is no obvious fundamental reason why this is occurring but it is. These are trends – and successful traders generate significant profits by identifying and following them.
I’ve been a student of the strategy of trend following for several years now but my journey to trend following was not straightforward.
When I started in the markets, I was a day trader. I used to trade the FTSE 100 Index and the German Bund and I worked entirely off commissions. In other words, if I didn’t make a profit I didn’t get paid. And for several months during the financial crisis that was a very real experience.
Back then I used to look at naked price action and pivot points to try and capture profits before the day was over. Believe it or not, trading trends is not as easy as it sounds when the timeframe is a few hours or less.
My journey to trend following
It must have been around April of 2009. I wasn’t happy as a day trader. I was stressed out and I wasn’t making much money either (the two tend to go hand in hand).
But I hadn’t yet given up on trading and I was determined to find a way to make money in the markets.
I had already read just about every trading book I could get my hands on but I still didn’t have a true direction. I knew that markets had a tendency to trend, often more than anyone could predict but it wasn’t until I read an article about the top hedge fund traders of the year that a lightbulb finally went off.
I can’t remember where I saw the article or who wrote it, but what caught my eye was that the trader with the best performance of the year was none other than Bruce Kovner of Caxton Alternative Management.
Amazingly, almost 20 years since the book was first written, Bruce Kovner was still killing it in the market, making billions of dollars with simple trend following trading rules.
I went back to Market Wizards and devoured the book once more and it was there that my journey to trend following really started.
Trend Following PDF
Since then, I’ve read numerous trend following books, articles, academic papers, journals and I’ve built complete trend following strategies from scratch.
I’ve also put together a concise guide to trend following in the form of a PDF. I cover all the essential information needed to begin your very own journey to trend following. Just click the image to download: