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Trend Following 2009: What Went Wrong?
- Thread starter shortie
- Start date
Quote from hermit:
Those trading long term trend following systems aren't or shouldn't expect year on year outperformance anyway, so the whole question of what went wrong in a particular year is without premise.
The big trend-following CTAs and Hedge funds did poorly in 2009.
Single digits +ve or -ve.
Though 2008 they did exceptionally.
hermit you are correct that most of these guys do not make money every year. They have poor years and then they have "home run" years.
What is interesting is WHY wasn't 2009 a good year for them?
I haven't figured it out.
Wasn't there ENOUGH good trends about in 2009 for them to have a solid year??
Gold, oil, AUD/USD and any stock market index, are a few examples that immediately come to mind.
Quote from Random.Capital:
2009 was a GREAT year for trend-following. On US equities, for example, there was a buy signal in late-march, and the thing went nearly straight up for the nearly the whole year. In fact, by one of the standard trend-following methodologies, that go-long from March is still active, and currently sitting on a 30%+gain.
Doesn't get much simpler than that....
If you check out http://www.iasg.com
you may see some trend-followers with very good performances in 2009.
You have it bang on, I dont know what the OP was talknig about, there were stocks which went on monster trends for the entire year, many experienced traders made as much, or more money trend trading in 2009 then they did in 2008. It is as easy if not easier to make money in a market trending up, as opposed to down. Think about it, many bank stocks went up 3-400 percent in 09, the max you can make is 100% when a bunch of shit is going to zero.
One thing to consider though is that when it is going down it is much more obviuos. (i.e. you can see a stock falling apart from a mile away.)
One thing to consider though is that when it is going down it is much more obviuos. (i.e. you can see a stock falling apart from a mile away.)
Quote from Random.Capital:
2009 was a GREAT year for trend-following. On US equities, for example, there was a buy signal in late-march, and the thing went nearly straight up for the nearly the whole year. In fact, by one of the standard trend-following methodologies, that go-long from March is still active, and currently sitting on a 30%+gain.
Doesn't get much simpler than that....
Seems like most of the discussion here is in stocks. I'd like to add that 2009 was another great idea for trend following in the futures and currency markets.
A simply strategy such as go long Crude Oil into June, then long Gold from July into December would have paid off handsomely.
A simply strategy such as go long Crude Oil into June, then long Gold from July into December would have paid off handsomely.
Quote from Random.Capital:
2009 was a GREAT year for trend-following. On US equities, for example, there was a buy signal in late-march, and the thing went nearly straight up for the nearly the whole year. In fact, by one of the standard trend-following methodologies, that go-long from March is still active, and currently sitting on a 30%+gain.
Doesn't get much simpler than that....
I have to agree with this post in its entirety. If you took that buy signal in March and then paid attention to the S$P trendline you'd have done quite well. Though the trendlines are decreasing in slope, the current trendline is still upward sloping. The trend remains up.
1085 is a critical support level. At present we appear headed for 1199-1210 with earliest eta Feb 15th, but a more likely arrival time is late March. The trend can change, it hasn't yet.
Equities only represent 10-20% in most big trend-following programs allocation wise.
Bonds, energy, metals had a couple of weeks with action followed by wild counter-moves, detracting from performance for longer-term traders. Agricultural commodities were especially disappointing. Interest rate futures didn't do anything spectacular on a longer term view, maybe mid/late 2010 will see more action with rate hike expectations.
What went wrong in 2009 for trend-followers? Nothing. Just another year.
Bonds, energy, metals had a couple of weeks with action followed by wild counter-moves, detracting from performance for longer-term traders. Agricultural commodities were especially disappointing. Interest rate futures didn't do anything spectacular on a longer term view, maybe mid/late 2010 will see more action with rate hike expectations.
What went wrong in 2009 for trend-followers? Nothing. Just another year.
In stead of focusing on what went wrong in 2009 for trend-followers, may be we can focus on what went right in 2009 for trend-followers.Quote from makloda:
Equities only represent 10-20% in most big trend-following programs allocation wise.
Bonds, energy, metals had a couple of weeks with action followed by wild counter-moves, detracting from performance for longer-term traders. Agricultural commodities were especially disappointing. Interest rate futures didn't do anything spectacular on a longer term view, maybe mid/late 2010 will see more action with rate hike expectations.
What went wrong in 2009 for trend-followers? Nothing. Just another year.
Does any one know any trend-followers CTA or CPO who had good return in 2009?