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SI213: Trend Following Records are being set in 2022? ft. Richard Brennan

Top Traders Unplugged

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The Difference Between a Convergent and a Divergent Trader

The difference between the convergent trade of the gambler and the divergent trader effectively boils down to the degree or what form of serial correlation if it exists. So in addition to a quantitative trader as opposed to a visual trader we will be looking at this serial correlation. The only difference is taken from the origin, the random price series and the price series with positive serial correlation in it, they diverge away from each other. It is this divergence which is this momentum that we are looking for which we are targeting with our trend following models.

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