Chapter 11. Conclusion

 

“Trends come and go. Trend followers do too. Some stay longer than others.”

 
 --Ed Seykota[1]

In Absolute Returns, Alexander Ineichen stresses that trading is a game. There are no rules for the game except the constant of change. But, it is crucial that you avoid becoming the “game.” He outlines three types of players:

  • Those who know they are in the game.

  • Those who don’t know they are in the game.

  • Those who don’t know they are in the game and have become the game.[2]

Larry Hite described his conversation with a friend who couldn’t understand his absolute adherence to a mechanical trading system. His friend asked, “Larry, how can you trade the way you do? Isn’t it boring?” Larry replied, “I don’t trade for excitement; I trade ...

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