10. Trading Systems

“If you don’t risk anything, you risk even more.”

Erica Jong

“No matter what kind of math you use, you wind up measuring volatility with your gut.”

Ed Seykota1

Trend followers take a specific philosophy rooted in crowd behavior and reduce it to rules to guide them in daily decision making of when to buy and when to sell. These rules comprise what are commonly called trading systems. There is no limit to the number of different types of trading systems. That being said, most trend following systems are similar as they seek to capture the same trends.

I think it’s much too early to tell. I think all we’ve learned is what we already knew, is that stocks have become like commodities, regrettably, and they go ...

Get Trading the Trend (Collection) now with the O’Reilly learning platform.

O’Reilly members experience live online training, plus books, videos, and digital content from nearly 200 publishers.