Chapter 1. Trend Following


“Speculation is dealing with the uncertain conditions of the unknown future. Every human action is a speculation in that it is embedded in the flux of time.”

 --Ludwig von Mises[1]

The Market

A market is simply a place where buyers and sellers gather to trade and exchange goods, buying and selling for any number of reasons. The market performs the essential role of connecting financial and real economies. The New York Stock Exchange and the National Association of Securities Dealers Automated Quotation System (you hear it called NASDAQ on the news) are two markets. There are also futures exchanges like the Chicago Board of Trade or the Chicago Mercantile Exchange. All of these exchanges are markets where trend followers ...

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