SI391: Why Trend Following Works... the Evidence ft. Richard Brennan
Top Traders Unplugged
Trend followers: process over prediction
They explain why trend followers rely on rules and data rather than forecasts when markets shift rapidly.
What if trends in financial markets are not anomalies, but the natural consequence of how markets function? In this episode, Niels and Richard explore the structural foundations of trend following. Drawing on research spanning 68 futures markets across four decades, Richard explains why markets exhibit persistent trends, fat-tailed returns, and volatility clustering. The discussion moves from oil market shocks to deeper questions about feedback loops, participant behavior, and regime shifts in financial markets. The conclusion is striking: trend following does not rely on fragile patterns. It aligns with fundamental structural properties embedded in how markets actually evolve.
-----
50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
-----
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Rich on Twitter.
Episode TimeStamps:
00:00 - Introduction to the Systematic Investor Series
02:08 - Oil market shock and the structural setup behind the spike
06:10 - Why calm markets can hide explosive potential
11:47 - How oil shocks ripple through inflation and the global economy
15:29 - Why trend followers focus on process, not predictions
22:15 - A changing regime that may favor trend following
24:43 - The research behind The Fractals of Finance
25:25 - Market memory and the meaning of the Hurst exponent
31:22 - Why trends are structural rather than random patterns
36:25 - Fat tails and why extreme market moves are far more common than expected
41:12 - Divergent vs convergent market participants
45:29 - The hidden risks in traditional volatility targeting
49:33 - Phase transitions and regime shifts in markets
55:33 - Why trend following aligns with market structure
59:02 - Oil shocks, inflation risks, and the next potential market regime
Copyright © 2025 – CMC AG – All Rights Reserved
----
PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:
1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here
2. Daily Trend Barometer and Market Score
One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here
3. Other Resources that can help you
And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here
The AI-powered Podcast Player
