Trend following is an exercise in observing and responding to the ever-present moment of now.
Traders who predict the future, dwell upon a non-existent place, and to the extent they also park their ability to act out there, they can miss opportunities to act in the now.
Possible crashes are scary monsters that live in the future. To avoid them, some traders have sophisticated reasons for getting out of winning, strongly trending positions when they just can't take it any more.
Actually, picking tops is really pretty easy, since there are so many of them during up-trends.
The main difference between trend systems is the time constant, that defines how long it takes to register a change in trend.
If you trade options to capture the time premium, then the options still have to trend for you to profit.
Trend following systems already define trend. A trend system with an additional opinion about a future trend, is like a fish with a bicycle.
A woman needs a man like a fish needs a bicycle.
Gloria Steinem re-cycles Irina Dunns' quote in the 70's, then marries in 2000, at Age 66
Trend followers do not have to deal with, and cannot deal with possible crashes, since they do not exist in the present.
What we can deal with in the present is our feelings about trading and how we respond to our feelings.
To the extent we can learn to operate with uncertainty, we can implement risk control and deal with, even enjoy, the inevitable ups and downs.
Yes, it is possible to profit from trend-following, indeed, impossible any other way; if a trade shows a profit it is, by definition, in line with the trend.
Advanced technology for analyzing the markets is interesting, entertaining, distracting, and even counter-productive to coming to terms with emotional reactions to uncertainty and volatility.
By the way, if you want something certain about the markets, uncertainty itself almost certainly happens to be one of the most certain things about the markets.
ED SEYKOTA
