Trend-Following Course

///Trend-Following Course

Trend-Following with Valeriy Zakamulin: Performance Measurement and Outperformance Tests (Part 5)

By | 2017-08-19T13:33:08+00:00 August 18th, 2017|Trend-Following Course, Investor Education, Introduction Course|

We consider an investor and a financial market that consists of only two assets: one risky asset and one safe (or risk-fee) asset. An example of a risky asset is an investable stock market index. [...]

Trend-Following with Valeriy Zakamulin: Anatomy of Trading Rules (Part 4)

By | 2017-08-18T16:54:23+00:00 August 13th, 2017|Trend Following, Trend-Following Course, Guest Posts, Investor Education, Introduction Course|

In our context, a technical trading indicator can be considered as a combination of a specific technical trading rule with a particular moving average of prices. In two preceding blog posts we showed that there [...]

TREND-FOLLOWING WITH VALERIY ZAKAMULIN: TECHNICAL TRADING RULES (PART 3)

By | 2017-08-18T16:54:21+00:00 August 11th, 2017|Trend-Following Course, Introduction Course|

A trend following strategy is based on switching between a financial asset and cash depending on whether the asset prices trend upward or downward. Specifically, when the strategy identifies that prices trend upward (downward), it [...]

Trend-Following with Valeriy Zakamulin: Types of Moving Averages (Part 2)

By | 2017-08-18T16:54:20+00:00 July 21st, 2017|Trend Following, Trend-Following Course, Guest Posts, Investor Education, Introduction Course|

In this post we aim to give an overview of some specific types of moving averages. Specifically, we cover "ordinary" moving averages and mention some examples of exotic moving averages.

Trend-Following with Valeriy Zakamulin: Moving Average Basics (Part 1)

By | 2017-08-18T16:54:22+00:00 July 14th, 2017|Trend Following, Trend-Following Course, Guest Posts, Investor Education, Introduction Course|

One of the basic principles of technical analysis is that ``prices move in trends". Traders firmly believe that these trends can be identified in a timely manner and used to generate profits and limit losses. Consequently, trend following is the most widespread market timing strategy; it tries to jump on a trend and ride it. Specifically, when stock prices are trending upward (downward), it's time to buy (sell) the stock. Even though trend following is very simple in concept, its practical realization is complicated. One of the major difficulties is that stock prices fluctuate wildly due to imbalances between supply and demand and due to constant arrival of new information about company fundamentals. These up-and-down fluctuations make it hard to identify turning points in a trend. Moving averages are used to ``smooth" the stock price in order to highlight the underlying trend.