The Little Book of Trading: Trend Following Strategy for Big Winnings

Chapter One

Stick to Your Knitting

Gary Davis, Jack Forrest, and Rick Slaughter

WHILE TODAY SUNRISE CAPITAL IS A VERY SUCCESSFUL money management firm, it did not start that way. It began with three visionary men who dared to be different. They saw opportunity and chased it. One of the founders put it this way: They stick to their knitting. They follow their trading rules. I said this in the Introduction, but it bears repeating: To learn trend following trading, to make a great deal of money with this strategy, requires confidence. The best way to instill that confidence in you is to show you, start to finish, successful traders' paths. As you read this book you may find yourself asking why it is relevant when these traders started. You may be asking why it is relevant to learn about their performance in the 1970s, 1980s, 1990s, and so on. It's relevant because it shows consistency of strategy. This is not some “got lucky trading” method that works for one month, one year, or one decade. It has worked literally month by month for decades. In fact, by the time you finish this book I hope you look carefully at consistency of performance at all times for all strategies—not just trend following. If you find a strategy that doesn't have performance proof behind it, you're gambling. With ...