Trend Following - British Pound Going To Parity With US Dollar
I had this question Could the British Pound Be Going to Parity with US Dollar posed today by a client? Firstly I do not have a crystal ball nor do I give investment advice other than my Commodity Trading advisor client who have signed and agreed to all kinds of disclosures and are aware of the risks of trading commodities and currencies…
We opened a chart of the British Pound and I asked a very simple question…is the trend up..down or sideways….He answered obviously down….
With him stating it was down….I told him, anything can happen. Anything can happen means the British pound might rally up from this point and to his great dismay it is possible that the British Pound Could Go to Parity with US Dollar.
This is what trend following is…No predictions…just following the trend. Once people internalize this they start their journey of attempting to compound money. Most can not do it. They expect trades to work, and with trend following very few do trend and when they do trend…these people might exit too soon by not having the patience or discipline to let trades work overtime.
The same with investors in CTAS. They want it now. They wan the double digit returns. However most CTAs as well as myself have struggled over the last 5 years. Many famous CTAs threw in the towel. Countless investors bought the 2007 and 2008 highs only to get clobbered in the drawdowns following.
All of this boils down to discipline…expectations..and mostly patience. Clearly a defined trend following plan is needed. Trend Following is never easy…nor is it a weekend course….
Disclosure:The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I may hold ...
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