No Way Out Trend Following Warfare: John Boyd's OODA Loop in Trading
Dec 29, 2025
In this engaging discussion, trend following experts Jerry Parker, a Turtle Trader with deep roots in systematic practice, and Mike Melissinos, a volatility management pro, explore the complexities of trading through John Boyd’s OODA Loop. They emphasize the discomfort inherent in trend following and the necessity of embracing losses to catch substantial gains. Delving into the cultural contrasts between trend followers and traditional finance, they discuss risk perceptions, the importance of behavior over emotions, and why a 40% win rate can still yield success.
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Discomfort Is The Edge
- Trend following asks traders to embrace discomfort: take small losses and accept a low win rate while letting winners run.
- The approach succeeds because a few big outliers pay for many small losses, not because it feels good daily.
Put The Trade On, Then Manage Losses
- Put the trade on first and accept predefined small losses so you don't miss the rare big trends.
- Use preset exits and position sizing to limit downside and preserve the chance for large winners.
Reward Rule-Following, Not Short-Term Results
- Follow the rules even when you lose and reward adherence with more capital rather than punishment.
- Expect pain while doing the right thing and distrust client pressure that demands short-term performance smoothing.
