Trend Following
Trend following is an investment strategy that attempts to capitalize on long-term market trends. It is based on the idea that markets tend to trend in one direction for extended periods of time, and that by following these trends, investors can make profits. Trend following is a popular strategy among professional investors, and it is often used in combination with other strategies to maximize returns.
History of Trend Following
Trend following has been around for centuries, but it was popularized in the 1970s by commodities trader Richard Dennis. Dennis believed that anyone could learn to trade successfully, and he recruited a group of traders to test his theory. The traders, known as the “Turtles,” were taught a simple trend following system and went on to become some of the most successful traders of all time. Since then, trend following has become a popular strategy among professional investors.
Comparison Table
| Strategy | Risk | Reward |
|---|---|---|
| Trend Following | Low | High |
| Buy and Hold | Low | Low |
| Day Trading | High | High |
Summary
Trend following is a popular investment strategy that attempts to capitalize on long-term market trends. It has been around for centuries, but was popularized in the 1970s by commodities trader Richard Dennis. Trend following is a low-risk, high-reward strategy, and it is often used in combination with other strategies to maximize returns. For more information about trend following, you can visit Investopedia, The Balance, and Investing.com.
See Also
- Buy and Hold
- Day Trading
- Momentum Investing
- Swing Trading
- Value Investing
- Technical Analysis
- Fundamental Analysis
- Options Trading
- Futures Trading
- Forex Trading
