Catch as Catch Can
Trend following trading can be seen in nature. The predatory nature of a trend following strategy resembles that of a Great White:
“Just as each of us must balance a household budget, predators must balance an energy budget. All of the multitudinous tasks that an organism needs to carry out in order to maintain itself must be accomplished within its energy budget. Everything an animal does is limited by the number of calories it takes in. Thus, it doesn’t make sense for a predator to expend more calories in capturing a prey animal than can be extracted by digesting it. Predators - unlike nations - cannot operate at a deficit, at least not for very long. How do predators decide how to best expend their calories? Do they strive to ‘economize’ - minimize energy expenditures and maximize energy ‘profits’? Why, from a group of similar potential prey organisms, does a predator choose one individual prey animal over another?…There is ample evidence from field studies that predators tend to be opportunistic, but it is a gross oversimplification to suggest that they rely on prey that are sick, injured, or just plain stupid. There are very few ‘free lunches’ in nature…[and] evidence suggests that the White Shark is a cautious and methodical predator that feeds relatively infrequently.”
