David Winton Harding is a billionaire trend following quant trader, and the founder and CEO of Winton Group. His fund was launched in 1997 with $1.6 million in assets and now has approximately $20 billion under management. His funds trading programs have returned a compounded +12.5% return over the last 19 years even with its size.

David Harding’s current net worth is approximately $1.3 billion as of March 2020.

Here are five of his price action trading quotes.

“If you put in stops and run your profits and trade randomly you make money; and if you put in targets and no stops, and you trade randomly you lose money.” – David Harding

This is a simple way to express how to create an edge with a good risk/reward ratio after an entry even if it is random.

“The idea that markets are always rational, that they perfectly reflect all knowable information and always produce in some sense the ‘right’ price”. This theory still has a grip on western economic thinking, he says, despite much evidence that it is wrong. “It treats economics like a physical science when, in fact, it is a human or social science. Humans are prone to unpredictable behaviour, to overreaction or slumbering inaction, to mania and panic.” – David Harding 

“The aggregate effect of shared mental biases and imitation results in patterns of behavior, which while they are non-consistent with Mr. Spock-like, rational decision-making or with informational efficiency, are demonstrably systematic. The market equivalent of these behavioral patterns is trending, whereby prices tend to move persistently in one direction or another in response to information. The widespread adoption of investing fashions, like indexation, introduces market mechanisms, which magnify herding behavior on a large scale.” – David Harding 

“I worked for a company [early on], and the people who ran that took a very old-fashioned approach to trading. About 10 people and I spent the first half of every day drawing about 400 charts by hand. It was very tedious. I did this for about two years. The act of laboriously updating these charts forces you to focus in much more minute detail on data than you normally would, and over a period of time, I became completely convinced the market was not efficient, contrary to the theory at the time. I became convinced that markets weren’t efficient and absolutely trended.” – David Harding 

“We trade everything using trend following systems, and it works. By simulation, you come up with ideas and hypotheses, and you test those. Over the years, what we’ve done, essentially, is conduct experiments. But instead of using a microscope or a telescope, the computer is our laboratory instrument. And instead of looking at the stars, we’re looking at data and simulation languages…it’s counterintuitive to think in terms of statistics and probability.” – David Harding

David Harding

Winton Capital Management / CC BY