Why did trend following work well in commodities in 1970s but lost effectiveness later?

[Buy1Sell2]

Trend following still works really really well. But, a trader needs to understand what is meant by trend following. It has nothing to do with 6 bars in a row down and so the 7th one will be as well.

 

[BONECRUSHER]

Trend following still works really really well. But, a trader needs to understand what is meant by trend following. It has nothing to do with 6 bars in a row down and so the 7th one will be as well.

Buy1Sell2...not trying to be a smart ass, but haven't you said trend following is "simple"? Kind of like your example above.

 

[Deuteronomy_24_7]

Where can we find that all these CTA's are trendfollowers? If not this index is useless.

The great majority of the AUM in the Index is trendfollowers. There are other trendfollower indices also, and they've done roughly as well over time.

 

[Mtrader]

The great majority of the AUM in the Index is trendfollowers.

So maybe the lower returns can come from the other CTA's, not from the trendfollowers...

I have learned that stats are only useful if the input is correct and reliable, which is not the case here. You can only guess and suppose you are right.

 

[Deuteronomy_24_7]

I have learned that stats are only useful if the input is correct and reliable, which is not the case here. You can only guess and suppose you are right.

I have a feeling you're not familiar with the industry. Speak to anyone active in the CTA business -- s/he will confirm what I told you.

 

[BONECRUSHER]

So maybe the lower returns can come from the other CTA's, not from the trendfollowers...

I have learned that stats are only useful if the input is correct and reliable, which is not the case here. You can only guess and suppose you are right.

Lower returns from the other CTA's...that sounds unlikely. Maybe your out performance is due to experience/intuition or unique approach to "trend following"?

 

[Buy1Sell2]

trend following is "simple"?

extremely simple. yet most are unable to do so. They bail at the first opposite bar. Remember trend following is not about the next bar going in the right direction.

 

[clacy]

As bonecrusher stated earlier, it will be interesting to see if commodity trend following takes off again if there is high inflation or rising rates like we had in the 70's.

 

[Deuteronomy_24_7]

As bonecrusher stated earlier, it will be interesting to see if commodity trend following takes off again if there is high inflation or rising rates like we had in the 70's.

That's what Covel's been saying for years -- gotta have some trendfollowing in your portfolio, to hedge rising rates / inflation.

 

[stockoptionstrader]

Trend following still works, why wouldn't it?

If you followed the trends this year, you made some good money.

Anyone claiming it doesn't is saying bullshit.