Last week marked the first anniversary of the blog, and coincidentally the 100th post as well. Last September, the blog was born (does that make it a birthday or an anniversary?…) and I have not really looked back since.
The first thing I want to do is to thank all of you, readers. I have had genuinely interesting conversations with some of you, whether on or off the blog – and even met some of you in real-life. This has definitely played a role in pushing some of my thinkings further, or simply giving me new ideas/concepts to work on. Writing these articles/posts regularly is also an excellent driver for my research.
In that respect I consider the blogging experience as successful and I hope that it has been mutual, and brought you interesting points of view for your own trading.
I cannot fail to mention all the other authors in this niche of the blogosphere, which have also been an important part of this idea generation/exchange process. The ones I read regularly are on the blogroll but I want to single out my main sources of inspiration for starting this blog:
- Mebane Faber and the World Beta blog
- Mike Stokes and the MarketSci blog
- David Varadi of CSS Analytics
If you’re reading this: a special thanks guys!
Trend Following and Motor Racing
I find it interesting to draw parallels between trading and real-life, especially with things I am interested in (as in Surfing and Trend Following).
And to “celebrate” the blog birthday I treated myself to some track time (I feel passionate about trading, but I agree with Mike on not wasting a good life trading — except I don’t do MMA fights, I prefer having fun with a bit of racing).
And I could see such parallel between some racing line theory and some marketing itterature from BlueTrend, that I was reading not long ago… Bear with me:
This is not really a motor racing blog so I’ll keep the explanation short; but in effect most beginner drivers tend to go into a turn (too) early because it feels safer: It gives an impression of more space and time. However, there is a clear benefit in turning in later – as you can see from the diagram below. The exit line is straighter and allows to get a better “drive” out of the turn. Another very important aspect to make this work is to be very smooth and progressive with the throttle (for bike stability, holding the line, etc.).
One of the main marketing points in BlueTrend’s brochure, describes their strategy as more progressive (ie gradually building positions), which allows them to capture only the bulk of the trend, by getting on the trend later (and avoid some early whipsaw action).
I find the concept very similar to wanting to turn in earlier on the track, and keeping a smooth, progressive throttle.
This is merely an extract from BlueTrend marketing brochure, but is a concept worth investigating. My gut feel is that the main benefit would lie in producing a smoother equity curve, rather than an improved raw performance. Note that this is not a new concept: the “Turtles” were also adding/pyramiding to their positions.
With regards to the exits, BlueTrend try to anticipate reversals and lighten up their positions ahead of them, not much “cornering” parallel I could find there.
And to conclude a few pics of yours truly, trying to turn in late…