Systematic Trading research and development, with a flavour of Trend Following
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Trend Following or… Surfing?

November 13th, 2009 · 2 Comments · Trend Following


Trend Following, Surfing: it’s all the same thing! Just catch that one extraordinary ride: it will more than pay back all the previous seemingly wasted efforts.

Surfing is hard work! You have to paddle out battling against the elements, the waves crashing on your face. The current is sometimes so strong you feel you are not going anywhere. Until you finally make it to the line up. Then you start trying to catch some waves but most efforts result in wasted paddles…

And finally you get on that one wave!

This is a magical moment. Excitement is so great all your senses are alive. The exhiliration makes up up for all the efforts. Even if that is the only wave of the day, you know you’ll come back for more – as you definitely got more out of it than what you put in.

The description above is a great metaphor for Trend Following. The basis of Trend Following is to catch the big trends. To do this, you have to be willing to try and get on every trend; and most of them will fail to materialise. However this will ensure that, when a new big trend comes along, you are positioned to ride it. And that trade will more than pay back for all the small losses generated by previous trades.

So, do you want to become a Trend Surfer? I know I do! You have to know (and accept) that most of the time will be spent in “wasted efforts” (i.e. losing or zero-average trades). But these are just trading business sunk costs, this is just “positioning” time to get on and ride the “Big One” and reap its outstanding reward. Check also why Trend Following works thanks to Markets and Trade Returns Distribution.

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