My guest today is Eric Crittenden, a Founding Partner responsible for managing all research, risk quantification and trading operations. He's also been featured in Covel's own Little Book of Trading.
The topic is a white paper that was originally released in 2005 that concerns trend following on stocks.
In this episode of Trend Following Radio we discuss:
- The decision to do research into trend following on equities, and the background behind the white paper
- Why others weren't trading equities with a trend following strategy at the time, and why there's been a sea change in the industry now
- Stress tests
- How Critenden's models and datastreams apply to a model
- If Crittenden sees anything on the horizon that takes trend following on equities in a suboptimal direction, and where he sees it going in the future
- Whether Crittenden's work is all price driven and all systematic
- The amount of human judgment involved in Crittenden's strategy
- Why this strategy works if it's based on inefficiencies in the market, and Eugene Fama just won a Nobel Prize regarding the markets being efficient
- Why exposure management is more important than the entries and exits themselves
- The importance of blocking out distractions.
Jump in!
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I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.
To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/
You can watch a free video here: https://www.trendfollowing.com/video/
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Hope you enjoy my never-ending podcast conversation!
Michael Covel's Trend Following