The Quantopian Podcast

Quant Radio: Does Trend Following Still Work on Stocks?

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Jan 20, 2025
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ADVICE

Stock Selection and Entry

  • Find liquid stocks priced above $10 with sufficient average daily volume.
  • Enter a trade after a stock hits a new all-time high to ride momentum.
ADVICE

Trailing Stop-Losses

  • Employ trailing stop-losses to exit trades, using the average true range (ATR).
  • This dynamic stop-loss adapts to market volatility, providing an exit strategy.
ANECDOTE

Crash Examples

  • Despite crashes after all-time highs (e.g., Lehman Brothers, Enron), the strategy yielded profits.
  • Trailing stop-losses protected against significant downturns.
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