just because a strategy works 1 year, does not mean it work the next ...
Lessons Learned
- Thread starter rs7
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Like +2. I worked on a CL strat for a year. Implemented it, and it worked for 3 months after the one-year trial. Then CL changed. Had to kill strat, and work on a new one in a different market.
It happens! Alas!
Trend following has stopped working for many hedge funds and CTAs in recent years according to recent news reports.
From the article, the ironic thing about the trend-following strategy failing is that the failing fund managers continue to attract money inflows from investors. What lesson can we draw from this weird behaviour from investors? In the work-place, poor performers get sacked. Why not in the money management world?
Trends always have and will continue to exist. And trends can be read and followed. So it is the ability of the trader to read the trend, and not the art of trend following itself, that determines its success. Trend following itself, done realistically, cannot stop working. Due to their circumstances, hedge funds etc. try to reinvent the trend following process. It's that process that fails, and not trend following.
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Fully agree. I can see no proof that trending systems no longer work. If anything they are working better. Very short term trends may not work so well as everyone seems these days to have a short term mentality and the boat is becoming lopsided.
But my guess is that for these guys who claim trend following has stopped working is because they have a bearish bias and their stops are too tight.
The USA markets having been trending up for years, how can a trend follower not make money?
I have come across a strategy that trades on the reversal