Portfolio Thinking

Here is the conundrum: You cannot trade everything, but you cannot trade only one market either. You need to be in a position to be following enough markets that when a market moves you can ride it, as diversification is the only free lunch you get. It allows you to spread your potential targets of opportunity broadly across currencies, interest rates, global stock indices, grains, softs (wheat, cotton, etc.), meats, metals, and energies. You do not need to know the market’s name. They are all the same when you look at price data only. If they are all the same, then an opportunistic strategy that is ready to go when a trend starts can make you serious money. That’s how trend following fortunes are made.

  • Jazz

    Will a $10000 account acomplish the above? If so how?
    I think you need to be large hedge fund to make fortunes trend follwing.

  • William F.

    I have to say I tend to disagree a little with the above statement.
    Why not trade a diversity of “Systems” in one market?
    While it is true not all markets exhibit good trending characteristics there are several that are excellent candidates.
    I trade the EUR/USD FX exclusively, it is a very trendy market and by using 5 strategies on that currency pair my returns are very comfortable.

    Just some food for thought, a little outside the box.

  • William F.

    An addendum……. All of my methods are Trend Following.

  • DGDye

    Michael,

    I keep coming across trading models that show incredible results for “Turtle Soup,” the anti-Turtle method where you fade the breakouts rather than play them.

    Have you done any long-term analysis of Turtle Soup incorporating proper money management to validate/repudiate the claims?

    Cheers


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