Top Traders Unplugged

SI361: The Four Faces of Trend Following ft. Richard Brennan

11 snips
Aug 15, 2025
Guest
Richard Brennan
Richard Brennan, a trend-following expert, shares his insights on redefining trend following by exploring four distinct archetypes. He discusses the trade-offs of various strategies, such as static sizing versus volatility targeting and speed versus patience. Brennan demonstrates how some strategies require diversification for optimal performance and emphasizes the necessity of aligning strategies with investment objectives. This conversation not only offers clarity on trend-following methodologies but also challenges listeners to rethink their portfolio designs.
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INSIGHT

Trend Following Is Not One Thing

  • Trend following covers multiple archetypes with different purposes, not a single unified strategy.
  • Objective dictates design choices like markets, sizing, and metrics for each archetype.
ADVICE

Match Metrics To Strategy Purpose

  • Ask a manager what their explicit objective is before judging performance by common metrics.
  • Match evaluation metrics to the strategy's purpose instead of using one-size comparisons.
INSIGHT

The Four Trend Archetypes

  • Brennan defines four archetypes: replicators, core diversifiers, crisis risk offsets, and outlier hunters.
  • Each archetype has different market breadth, sizing and operational trade-offs aligned to its purpose.
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