Ep. 1027: Performance Data with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
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Volatility Is the Precursor to Profit
Most investors try to run away from the hint of volatility, even when running is not possible. Trend following has greater upside volatility and less downside volatility than traditional equity indicies because it exits losing trades quickly. Hedge fund researcher nicola meden compared monthly standard deviations, volatility as measured from the n and semi standard deviances. She found that although trend following experiences higher volatility, it is often concentrated on the upside positive returns, not the downside negative returns.
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