ATS Trading Solution has yet again written a good take on how difficult it is to be a trend follower. In particular, October was the second month in a row with muted performance. Two negative months in a row are not uncommon for trend managers but after the easy-breezy trading conditions throughout the year, this always feels difficult.
Ok…so Trend Following is difficult…..but it always has been. So what has changed?……well actually nothing really. Drawdowns are just a fact of life in this particular game where our long term success is defined by a handful of positive outliers.
What these months actually tell us is how well we are doing in preserving our finite capital until that unpredictable moment when uncertainty combined with wide diversification delivers that windfall that makes this game so worth it.
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