Trend Setters: The Mechanics of Trend-Following
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The Difference Between Tail Hedging and Diversifying Strategies
Otto: I think we've seen returns in some kind of random periods where they've just long sustained moves and FX don't seem to impact the market for one reason or the other. In many ways what you're talking about with trend is you're put for crises but with some kind of positive return over time which is a sharp distinction between tail hedging and diversifying strategies. Trend-forming strategies share some characteristics with say a long straddle position in that it does well when there's big moves because often those moves are achieved in some trending type way. Big trend up or big trend down means ultimately it's a big move in either direction.
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