A Better Trend by Perry Kaufman
Zzzzz…No, don’t fall asleep! This is important.
How can a trend be better? Here’s a unique approach to viewing trends so you can gain the most from them.
Consider these points:
• Macrotrend systems have had the best track record of any method for more than 30 years.
• They are based on a sound premise — following the reaction to economic policy.
• They don’t trade often (which bothers the brokerage houses).
• They work across nearly every market.
• They work across a large range of time frames (calculation periods).
• They capture the fat tail of price moves; that is, the really big moves.
• Therefore, they are robust. Very few trading strategies are robust.
• And, yes, they can be boring.
What I mean by robustness is:
• The same rules and parameters are applied to all markets.
• “Loose pants fit everyone” but don’t always look good. Fine-tuning to each market is a guarantee of failure.
There are also these advantages:
• Knowing the trend allows you to filter trading signals from other strategies.
• Knowing the trend allows you to weight trades with better expectations.
• Knowing the trend helps with option strategies.
• The concept is transparent; that is, you know what it’s doing.