Trend Following Archives

The 10 Habits of Rich Traders According to Research

Market Wizard, Traders, Trading, Trend Following, Wealth / Steve Burns

The difference between traders who consistently profit and those who struggle often comes down to habits rather than intelligence or market knowledge. By studying the patterns of successful traders documented in landmark works like Michael Covel’s Trend Following, Jack Schwager’s Market Wizards series, and the trading philosophies of Jesse Livermore and George Soros, clear behavioral […]

The 10 Habits of Rich Traders According to Research Read More »

Ed Seykota Strategy

Ed Seykota, Trend Following, Trend Trading, trend trading strategy / Steve Burns

Ed Seykota is a trend following trader that uses reactive technical analyses through quantified trading signals to capture large profits during trending price action. He has parameters for proper position sizing, volatility filters, and optimizes his strategy for large wins and small losses. Ed Seykota Trading Rules “In order of importance to me are: 1)

Ed Seykota Strategy Read More »

Trend Following Trading Strategy Guide

Trend Following / Steve Burns

Trend following is the process of using reactive technical analysis to take trades in the direction of the primary chart trend and let them run as far as they will go with a trailing stop. Traditional trend following was developed and used for the futures markets like commodities, currencies, index futures, and others but it

Trend Following Trading Strategy Guide Read More »

Wyckoff Theory

Trend Following, trend lines, Trend Trading, trend trading strategy, Wyckoff theory / Steve Burns

What is the Wyckoff Theory? The Richard Wyckoff Theory of accumulation and distribution focuses on supply and demand for a stock, the cause and effect, and the law of effort for a stock. It tries to measure and quantify whether a stock chart is being bought and held to create an uptrend or systematically sold

Wyckoff Theory Read More »

A Monthly Trading Strategy that Crushes Buy and Hold

Trend Following, Trend Trading, trend trading strategy / Steve Burns

Is there a simple moving average monthly trend trading strategy that crushes buy and hold investing? Buy and hold investing on the S&P 500 index with an exchange traded fund or a low cost mutual fund is a top performing system that few money managers and traders can beat over ten-year periods. This is a

A Monthly Trading Strategy that Crushes Buy and Hold Read More »

200 Day Moving Average vs Buy and Hold

Moving Average Strategy, Moving Averages, Trading Signals, Trend Following, Trend Trading, trend trading strategy / Steve Burns

Is there a simple moving average trading strategy that crushes buy and hold investing? If so, what moving average and time frame combination would accomplish this going back at least 20 years? The 200-day simple moving average as an end of month signal on the SPY ETF accomplishes this feat. Buy and hold investing on

200 Day Moving Average vs Buy and Hold Read More »

How To Become A Great Trader

Market Wizards, Trend Following / Steve Burns

Many people aspire to be traders when they see the potential for making large sums of money. Money attracts interest in any field whether it is practicing law, medicine, or entrepreneurship. However there is a huge distance between wanting to be something and doing the work to achieve a professional goal. It is generally accepted

How To Become A Great Trader Read More »

Best Exponential Moving Average Crossover Signals

Moving Average Strategy, Moving Averages, swing trading, Trend Following, Trend Trading / Steve Burns

Exponential moving average crossover signals are one way to capture trends on a chart by entering a long trade when a shorter term moving average crosses over a longer term one, then exiting as the shorter term moving average crosses back under the longer term one. The inverse of this are moving average cross under

Best Exponential Moving Average Crossover Signals Read More »

Nicolas Darvas Box Theory

Momentum Trading, Trend Following, Trend Trading / Steve Burns

The Nicolas Darvas box theory is a trend trading method where a breakout of price is bought and held as ranges build on top of each other. Nicolas Darvas used this process in the 1950’s to make over $2.25 million in a strong bull market. He was a top touring ballroom dancer by profession and

Nicolas Darvas Box Theory Read More »

Flat Top Breakout Trading

Breakout Trading Strategy, Momentum, Momentum Trading, Trend Following, Trend Trading / Steve Burns

The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. Once trades take place above that flat upper resistance level it is considered a breakout above that level. Flat top breakout trading is used by

Flat Top Breakout Trading Read More »

A Monthly Trading Strategy that Crushes Buy and Hold

Trend Following, Trend Trading, trend trading strategy / Steve Burns

Is there a simple moving average monthly trading strategy that crushes buy and hold investing? Buy and hold investing on the S&P 500 index with an exchange traded fund or a low cost mutual fund is a top performing system that few money managers and traders can beat. This is a good core strategy for

A Monthly Trading Strategy that Crushes Buy and Hold Read More »

What is Post Earnings Announcement Drift?

Earnings, Growth stocks, Momentum Trading, Trend Following, Trend Trading, trend trading strategy / Steve Burns

In trading and investing post earnings announcement drift (or PEAD) is the theory that a stock’s price action tends to trend in the same direction as an earnings surprise causes it to go. This effect usually starts with a gap in the direction that it will go for the next few weeks or even months

What is Post Earnings Announcement Drift? Read More »

Trend Following by Michael Covel (Book Review)

Trend Following, Trend Trading / Steve Burns

Trend Following by Michael Covel is the bible for traders interested in learning how trend trading works as a method. This book explains the principles and concepts that you will need to understand for how the best trend following traders made their outsized returns on capital. It will teach you the key principles that the

Trend Following by Michael Covel (Book Review) Read More »

Richard Dennis Price Action Trading Quotes

Price Action Trading, Richard Dennis, Trend Following / Steve Burns

Market Wizard Richard Dennis was a legendary commodities trader nicknamed the “Prince of the Pit.” Early in his trading career in the 1970s, he was loaned $1,600 and is said to have grown it into $200 million in approximately a decade of trend following trading. He traded a lot of breakouts and momentum signals in

Richard Dennis Price Action Trading Quotes Read More »

David Harding Price Action Trading Quotes

Market Wizard, Trend Following, Trend Trading / Steve Burns

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

David Harding Price Action Trading Quotes Read More »

Exponential Moving Average Crossover Backtests On $QQQ

signals, Trend Following, Trend Trading, trend trading strategy / Steve Burns

Moving averages are technical trading indicators for capturing trends. This post shows the backtesting data and system equity curve versus buy and hold using TrendSpider.com. This is the backtest based on buying $QQQ when the 5 day EMA crosses and closes over the 20 day EMA and then selling when the 5 day EMA closes

Exponential Moving Average Crossover Backtests On $QQQ Read More »

Moving Average Trading Strategy That Crushes Buy and Hold

Moving Average Strategy, Moving Averages, Trend Following, Trend Trading / Steve Burns

Buy and hold investing on the S&P 500 index with a low cost mutual fund is a top performing system first made popular by Jack Bogle. Warren Buffett also recommends this strategy as a way to beat the majority of mutual fund managers and hedge fund managers. Most financial advisers recommend this buy and hold

Moving Average Trading Strategy That Crushes Buy and Hold Read More »

Top Five Trend Following Indicators To Use

Trend Following, Trend Trading, trend trading strategy / Steve Burns

Trend following is the process of trading in the direction of the markets price action and staying with the trend until it ends. A trend follower must have a quantified winning process for entering when there is a signal and then either exiting for a small loss when a trend fails to be established or

Top Five Trend Following Indicators To Use Read More »