Jul 31, 2015
Many of the investment and trading approaches available today simply do not perform the same way in the real world as they do during simulation. This is why it's important to “look under the hood” of your trading strategy to understand how something works instead of simply taking it on faith.
This episode’s guest has appeared on
the podcast twice before. Eric Crittenden is one of the key mind's
behind Longboard Mutual Funds, a firm that has over 300 million
dollars under management. Crittenden was also featured in Michael
Covel's "Little Book of Trading".
In this episode, Eric Crittenden
talks about creating a mutual fund based on trend following
principles, why investment returns are not normally distributed,
how financial simulations differ from the real world, and how to
control risk in a trend following system.
Eric has many insights into trend
following and trading in general, and has the financial data to
back up his findings. He has also published several research papers
on the matter, which are linked to below.
In this episode of Trend
Following Radio:
-Relative momentum vs. time
momentum
-Survivorship bias in the financial
advisory market
-Defining risk – how much are you
willing to lose?
-Why trend following works for both
high-risk and low-risk assets
-Identifying the “sweet spot” client
for fund managers
-The difference between most mutual
funds and direct-managed funds
-Financial simulations vs. real
life
Get a free Trend Following DVD here.