Trend-following investment strategies

Trend-following investment strategies

Darran Goodwin, manager of EEA Diversified Trends, explains the basics of a systematic trend-following investment strategy in managed futures investments.

For more than 30 years, even amid the most volatile market conditions, trend following has proved itself as an effective alternative investment strategy. Most investment methods rely upon fundamental analysis, scrutinising external factors to try to forecast market movements. By contrast, trend following reacts rather than predicts, responding to the direction of the market rather than attempting to guess it. Trend following is based upon empirical evidence that price trends, once established, tend to last longer and extend further than most market participants anticipate. Using...