Cole Wilcox and Eric Crittenden of Blackstar Funds, LLC authored a white paper titled Does Trend Following Work on Stocks? This paper is being released exclusively first on the TurtleTrader collection of sites.

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Money management is like sex: Everyone does it, one way or another, but not many like to talk about it and some do it better than others. But there's a big difference: Sex sites on the Web proliferate, while sites devoted to the art and science of money management are somewhat difficult to find.

Gibbons Burke

1. Bet Sizing Article by Ed Seykota and David Druz
2. Gibbons Burke Article on Money Management (PDF)
3. Seykota Risk Management Resource
4. Kelly Formula and Data Transmission
5. White Paper by Johan Ginyard (PDF)
6. Johan Ginyard Position Sizing Interview
7. Frequency v. Magnitude White Paper
8. Web Resource for Math, Black Jack, Kelly, etc.
9. Edward O. Thorp: Beat the Dealer (PDF)
10. Kelly's Original paper, March 21, 1956 (PDF)
11. The Sharpe Ratio
12. Tutorial Risk-adjusted Return

Another resource to add? Send us an email!

In the twenty-first century it has become fashionable to manage one's own investments, yet few traders implement disciplined, professional money management strategies. During the stock market bubble, limiting risk was an afterthought, but given the recent price action, itâ??s time to get serious about management of money and risk. Professional risk and money management strategies are the foundation for success. Essentially, money management tells you how many shares or contracts to trade at a given point.

Money management is a defensive concept. It keeps you in the game to play another day. For example, money management tells you whether you have enough new money to trade additional positions. Donâ??t confuse money management with stop placement. Stop placement does not address the how much question.

Money management is risk management. Risk management is the difference between success or failure in trading. Trading correctly is 90% money and portfolio management, a fact that most people want to avoid or don't understand. Once you have the money management down though, your discipline and psychology is 100% of your success.

Money management optimizes capital usage. Few have the ability to view their portfolios as a whole. Even fewer traders and investors make the move from a defensive or reactive view of risk, in which they measure risk to avoid losses, to an offensive or proactive posture in which risks are actively managed for a more efficient use of capital. Trend Following risk management formulas and philosophies are key to increasing profits while controlling risk.

Q. What are some issues addressed by money management or bet sizing?
A. For example:

• How much capital do you place on each trade.
• What is the heat of your trading.
• Capital preservation v. capital appreciation.
• When do you experience expectation of success.
• When must you take a loss to avoid larger losses.
• If you are on a losing streak do you trade the same.
• How must you prepare if trading both long and short positions.
• Does a portfolio of long and short allow one to trade more positions.
• How is your trading adjusted with accumulated new profits.
• How is volatility handled.
• How do you prepare yourself psychologically.
• Have you tested your bet sizing.
• More Money Management FAQ

Q. Does money management impact a decision to trade the same number of contracts or shares in all markets?
A. Yes. Money and portfolio management rules dictate the number of contracts or shares. Precise formulas set forth size. A trader who uses a constant trading size gives up an important edge in much the same way a blackjack player does when always betting the same regardless of what cards are on the table. Common single contract/share measures of trading system performance such as win/loss ratio, percent winning trades, etc. are of little value to decision-making when using Trend Following systems (and the Turtle system). Often the best trading approach, when tested on a single contract/share basis, will turn out not to be the best approach when money management strategies are incorporated.

Q. What about short term trading? Isn't short term less risky, and therefore you donâ??t need money management strategies?

A. Short term trading is not, by definition, less risky. Some people may mistakenly apply a cause and effect relationship between using a long term strategy and the potential of incurring large loss. They forget profit and loss are proportional. A short term system will never allow you to be in the trend long enough to achieve large profits. You end up with small losses but also small profits. Added together, numerous small losses equal a big loss. When you trade for the long term, you have a more positive expectation in terms of the size of the move. In the big picture, the larger the move, the larger the validation of the move. If you were trading some short term pattern predictive system you would never be able to participate fully in the big trends. Big trends make the big profits.

Q. How does money management impact drawdowns?
A. All systems have drawdowns. You can't have a profitable methodology, without taking some calculated risks as well as some losses. Trend Following drawdowns are a function of the risk level desired. Risk level among Trend Followers varies depending upon the size of the profit they seek. For example, if you sought 100%+ a year gains you must be prepared for the possibility of a 30% drawdown. Anyone who promises you can make 100%+ with only the possibility of a 5% drawdown is lying. More on Volatility.

Q. Can you manage margin issues?
A. Required margin has little to do with money management considerations. For example, if the margin was dropped from $5000 to $2500 on a particular stock or commodity, must you trade twice as many shares or contracts? Of course not. Margin issues are not money management.

Q. Is slippage a concern with money management?

A. No one wants bad fills. But Trend Following for the long term places far less emphasis on perfect fills for success. In contrast, short term traders' transaction costs and skids on their fills affect their bottom line to a much greater degree.

Q. What is the win/loss ratio of Trend Following management? Can it experience many losses in a row?
A. Trend Following systems (and the Turtle system) trade for the outsized large move. Several big trends a year are your key to success. The strategy cuts your losing positions quickly. Consequently, a few big trades will make up the bulk of your profits and many small trades will make up your losses. Winning trades can range from 35-50%, but that percentage reveals little information since we expect more losses (of smaller value) than winners (of much larger value). Win/loss ratio, while a favorite of the novice trader, has limited use in terms of Trend Following analysis.

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Paul Tudor Jones

The photo in the background of Paul Tudor Jones? office says it all: Losers average losers. Jones? wisdom was obviously lost on James K. Glassman judging from the following excerpt from his Washington Post investing column:

If you had Enron in your portfolio and didn't sell it at $90 or even at $10, don't feel embarrassed. As Alfred Harrison, a money manager at Alliance Capital Management Holding LP, which owned a ton of Enron, put it, 'On the surface it had always seemed to be a fairly good growth stock. We bought it all the way down.'

Glassman and Harrison are both dead wrong. You must feel less cash in your pocket if you average losers, not just embarrassed. Harrison violates a cardinal rule of Trend Following trading. Even worse, as an active money manager for clients, he admits to averaging losers as a strategy. If the trend is down, it's not a buying opportunity. It's a selling opportunity or a time to go short opportunity.

The absolute wisdom is on a simple piece of paper hanging right behind Paul Tudor Jones' head: "Losers average losers". Think about it.

More on Capital

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There is no stated minimum capital to trading as a trend trader. There is no magic number. There are many factors related to starting capital not the least of which is your own personal discipline and ability to stick with a system. Immediately question anyone that promises you a magic number of how much you need to win. No one can guarantee you profits. Rather than focusing on starting capital, decide how you are going to trade since you can trade a wide variety of instruments from stocks to currencies to commodities across exchanges in nearly every major city in the world. A top trader was asked how much money must one have before starting to trade. He responded:

I'd ask a trader who thinks he needs a certain amount before he can trade exactly what amount he would need to stop trading.

His point? There is no dollar amount too little nor dollar amount too much.

• "What you're asking about [are] rates of return, what you can reasonably make. And Iâ??ve found that my trading style with small amounts of money allows around a 300% return." [source: Richard Dennis]
• Ed Seykota, profiled in Jack Schwager's Market Wizards, is a Trend Follower. He traded $5,000 into $15,000,000 in 12 years in his model account.
• "I know of a few millionaires who started trading with inherited wealth. In each case, they lost it all because they didn't feel the pain when they were losing. In those formative first years of trading, they felt they could afford to lose. You're much better off going into the market on a shoestring, feeling that you can't afford to lose. I'd rather bet on somebody starting out with a few thousand dollars than on somebody who came in with millions....This is one of the few industries where you can still engineer a rags-to-riches story. Richard Dennis started out with only hundreds of dollars and ended up making hundreds of millions in less than two decades - that's quite motivating." [source: William Eckhardt]
• Trading equities (through the Nasdaq market) and LEAPS options are viable options for trend trading. Obviously, tech stocks have provided some of the greatest trends of all time.
• FX or currency markets allow traders to use up to 50:1 leverage. You can execute trades up to $100,000 with an initial margin of $2000. However, while leverage allows traders to maximize their profit potential, potential for loss is just as great. A more conservative margin trade would be 5:1 or 10:1, but ultimately it is based on your tolerance for risk.
• Trading commodities can involve high leverage, giving high profit potential (and risk potential). A $1,350 security deposit will control a Silver futures contract which contains 5,000 ounces of silver. So when the price of Silver is at $5/oz. the contract is valued at $25,000. A change in the price of Silver by 1 cent results in a $50 change in the value of your futures contract either for or against you. A Silver price move of 10 cents in your favor makes you $500 in profit.
• Read the bios of the many famous traders listed on TurtleTrader.com. Most got started with very little capital. Ultimately, it's your passion to win and your self-discipline to stick with it that makes a difference. Starting capital has very little impact on your success.

If you don't have enough confidence or capital to start trading, learn how to trade successfully by spending some time each day performing paper trade analysis. Armed with paper instead of your hard earned money, teach yourself the rules and hold off actually trading until your bankroll is sufficient. This is a sensible alternative to wasting money on sub-par trading systems or worse, trading with no system at all. Go to school.

We don't pretend trading isn't risky. It is risky. You win and you lose. But, trading is a zero-sum game. That means the winners take from the losers. A solid plan is the first step toward winning from the mistakes of the losers.

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It may readily be conceived that if men passionately bent upon physical gratifications desire greatly, they are also easily discouraged; as their ultimate object is to enjoy, the means to reach that object must be prompt and easy or the trouble of acquiring the gratification would be greater than the gratification itself. Their prevailing frame of mind, then, is at once ardent and relaxed, violent and enervated. Death is often less dreaded by them than perseverance in continuous efforts to one end.
Alexis de Tocqueville

In an effort to remind traders of the hard work needed to trade right, we include the address below from Charles Sanford. It was given when he was Chairman of Bankers Trust:

From an early age, we are all conditioned by our families, our schools, and virtually every other shaping force in our society to avoid risk. To take risks is inadvisable; to play it safe is the counsel we are accustomed both to receiving and to passing on. In the conventional wisdom, risk is asymmetrical: It has only one side, the bad side. In my experience -- and all I presume to offer you today is the observations drawn on my own experience, which is hardly the wisdom of the ages -- in my experience, this conventional view of risk is shortsighted and often simply mistaken.

My first observation is that successful people understand that risk, properly conceived, is often highly productive rather than something to avoid. They appreciate that risk is an advantage to be used rather than a pitfall to be skirted. Such people understand that taking calculated risks is quite different from being rash.

This view of risk is not only unorthodox, it is paradoxical -- the first of several paradoxes that I'm going to present to you today. This one might be encapsulated as follows: Playing it safe is dangerous. Far more often than you would realize, the real risk in life turns out to be the refusal to take a risk. In other words, the truly most threatening dangers usually arise when you shrink from confronting what only appear to be the most threatening dangers. What is widely regarded as playing it safe turns out not to be safe at all.

What I'm offering here is not a surefire, guaranteed formula for success. No such formula exists. It never will. If anyone ever tries to sell you one, keep your money in your pocket. For life, above all else, is a risk. I'm not trying to dispel that risk with a bottle of Charlie Sanford's Magic Elixir. I can only arm you with a little food for thought. I do have a few suggestions. You may not wish to follow them. But if you'll think about them, I'll consider our time together most productively spent.

We all know that modern civilization owes much to the ancient Greeks. As the 20th century draws to a close, it's difficult to single out a Greek thinker who speaks more directly to us than Heraclitus. All is flux, nothing stays still, said Heraclitus some 2,500 years ago. Nothing endures but change.

Most of us have come to believe that nothing endures but change, but its consequences still deserve some reflection. Obviously, if change is the fundamental rule of life, then resistance to change is folly -- doomed to defeat. Just as obviously, if change is our constant, then uncertainty is an inescapable part of our lives. Uncertainty is unavoidable. Life is unpredictable. The very essence of life is the unexpected and the unintended, the unanticipated turns that we may metaphorically ascribe to Fate or Destiny or Providence.

Therefore, unless we wish to be tossed about like so much flotsam on the waves of inescapable change, we must place ourselves squarely in the midst of change. We must learn to ride the current of change rather than to swim against it -- although people who haven't taken the trouble to learn how the world really works will think we're doing exactly the opposite.

In other words, risk is commonly thought of as going against the current, taking the hard way against high odds. In a world of constant change, however, a world where Heraclitus said we can never step into the same river twice, taking risks is accepting the flow of change and aligning ourselves with it. Remember the first paradox: Risk only looks like reckless endangerment. For those who understand reality, risk is actually the safest way to cope with a changing, uncertain world.

To take a risk is indeed to plunge into circumstances we cannot absolutely control. But the fact is that the only circumstances in this life that we can absolutely control are so relatively few and so utterly trivial as hardly to be worth the effort. Besides, the absence of absolute control -- which is impossible in any case -- does not entail the absence of any control, or even significant control.

There, again, is the paradox: In a world of constant change, risk is actually a form of safety, because it accepts that world for what it is. Conventional safety is where the danger really lies, because it denies and resists the world.

I trust you understand that when I say risk is actually safety, I'm talking about a certain sort of risk. I'm not advising that you leap off tall buildings in the hope that the operation of constant change will reverse the law of gravity in mid-flight. I'm speaking rather of a sort of risk that actually aligns you with the direction of change.

To be more specific, I believe firmly that the sort of risks that put one in a position to control one's lot in a world of incessant change are the risks that attempt to add something of value to that world. To create value, to focus one's efforts on increasing the fund of that which is worthwhile, involves (as we shall see) a sort of risk. And yet, paradoxically, it provides you with the greatest control over a changing world and maximizes your chances to achieve a truly meaningful personal satisfaction.

NOTE: If you want to learn about trend following trading in general there is one definitive text: the bestselling classic "Trend Following: How Great Traders Make Millions in Up or Down Markets" by Michael Covel. If you want to learn about the most famous group of trained trend following traders, the Turtles and their teacher Richard Dennis, "The Complete TurtleTrader" by Michael Covel is the only complete biography (with all of the Turtle rules) available. If you want to learn trend following techniques and systems through advanced home study and or seminars click here.

In the book Critical Thinking the essential thought processes of a Trend Follower are outlined:

Dispositions: Critical thinkers have dispositions that are skeptical and open-minded. They value fair-mindedness, respect evidence and reasoning, respect clarity and precision, look at different points of view, and will change positions when reason leads them to do so.

Criteria: To think critically, you must apply criteria. This means you need to set conditions that must be met for you to judge something as believable.

Argument: Is a statement or proposition with supporting evidence. Critical thinking involves identifying, evaluating, and constructing arguments.

Reasoning: You have the ability to infer a conclusion from one or multiple premises. To do so requires examining logical relationships among statements or data.

Point of View: POV is the way you view the world, which shapes your construction of meaning. In a search for understanding, critical thinkers view phenomena from many different points of view.

Procedures for Applying Criteria: Other types of thinking use a general procedure. Critical thinking makes use of many procedures. These procedures include asking questions, making judgments, and identifying assumptions.

Mindless memorization: Like fattening a goose before slaughter, force feeding students endless content in the form of declarative sentences and then asking them to remember the content is mindless teaching at its best, and mental torture at its worst.

The art of the question: We need questions to jumpstart our intellectual engines. Questions generate more questions until the student takes ownership of the material and focuses thinking on a process to gain the answer. The questions we ask determine where our thinking goes. When learners are asked to memorize facts, itâ??s as if they were told to repeatedly step on the brakes in a vehicle that is parked. Their mind goes nowhere.

Go below the surface: Deep questions drive our thoughts below the surface of things and force us to deal with the complexity of what is real.

Define the task: Purposeful questions force us to define our task. We must begin to evaluate information instead of mindlessly accepting it as truth. We begin to look at our sources of information as well as the quality.

Find Meaning: Questions of interpretation force us to examine how we are organizing or giving meaning to information.

Discover the facts: Questions of assumption force us to examine what we are taking for granted.

Show Direction: Questions of implication force us to follow through on where our thinking is going.

Find Context: Questions of point of view force us to examine our point of view and to consider other relevant points of view.

Focus: Questions of relevance force us to discriminate what does and what does not bear on a question.

Look for truth: Questions of accuracy force us to evaluate and test for truth and correctness.

Look for detail: Questions of precision force us to define details and be precise.

Self examine: Questions of consistency force us to examine our thinking for contradictions.

Put it all together: Questions of logic force us to consider how we are putting the whole of our thought together, to make sure that it all adds up and makes sense within a reasonable system.

http://www.criticalthinking.org

Unfortunately, most students ask virtually none of these types of questions. Instead they ask deadening questions like, Is this going to be on the test?. Their questions imply they have no desire to think. Or they ask no questions, sitting in silence; their minds on both pause and mute. As a result the questions they do have tend to be superficial and ill-informed because they have not taken ownership of the content.

At the same time, most teachers are not generators of enlivening and energetic questions. Most are not seriously engaged in thinking through or rethinking through their own subjects. It is easier for them to teach as purveyors of the questions and answers of other teachers, usually the authors of a textbook.

We must continually remind ourselves that critical thinking about any type of content whatsoever, whether it is trading, history, biology or how to sail a boat only begins when questions are generated by both teachers and students. No questions equals no understanding. Superficial questions equals superficial understanding.

If we want to think critically, we must stimulate our intellect with questions that lead us to even further questions. We must overcome what our previous schooling has done to our way of learning. We must resuscitate minds that are dead when we interact with them either as teachers or fellow students. We must give ourselves and our students what could be called artificial cogitation, the intellectual equivalent of artificial respiration to make dead minds come to life again.

http://www.criticalthinking.org

Critical thinking is deciding rationally what to or what not to believe.
Norris, Stephen P. Synthesis of Research on Critical Thinking.

Critical thinking is the use of those cognitive skills or strategies that increase the probability of a desirable outcome. It is used to describe thinking that is purposeful, reasoned and goal directed - the kind of thinking involved in solving problems, formulating inferences, calculating likelihoods, and making decisions when the thinker is using skills that are thoughtful and effective for the particular context and type of thinking task. Critical thinking also involves evaluating the thinking process - the reasoning that went into the conclusion we've arrived at the kinds of factors considered in making a decision. Critical thinking is sometimes called directed thinking because it focuses on a desired outcome.

Halpern, Diane F. Thought and Knowledge.

The purpose of critical thinking is, therefore, to achieve understanding, evaluate view points, and solve problems. Since all three areas involve the asking of questions, we can say that critical thinking is the questioning or inquiry we engage in when we seek to understand, evaluate, or resolve.
Maiorana, Victor P. Critical Thinking Across the Curriculum.

Broadly speaking, critical thinking is concerned with reason, intellectual honesty, and open-mindedness, as opposed too emotionalism, intellectual laziness, and closed-mindedness. Thus, critical thinking involves: following evidence where it leads; considering all possibilities; relying on reason rather than emotion; being precise; considering a variety of possible viewpoints and explanations; weighing the effects of motives and biases; being concerned more with finding the truth than with being right; not rejecting unpopular views out of hand; being aware of one's own prejudices and biases, and not allowing them to sway one's judgment.
Kurland, Daniel J. I Know What It Says . . . What does it Mean?

Critical thinking is a process which stresses an attitude of suspended judgment, incorporates logical inquiry and problem solving, and leads to an evaluative decision or action.

NCTE Committee on Critical Thinking and the Language Arts.

Critical thinking includes the ability to respond to material by distinguishing between facts and opinions or personal feelings, judgments and inferences, inductive and deductive arguments, and the objective and subjective. It also includes the ability to generate questions, construct, and recognize the structure of arguments, and adequately support arguments; define, analyze, and devise solutions for problems and issues; sort, organize, classify, correlate, and analyze materials and data; integrate information and see relationships; evaluate information, materials, and data by drawing inferences, arriving at reasonable and informed conclusions, applying understanding and knowledge to new and different problems, developing rational and reasonable interpretations, suspending beliefs and remaining open to new information, methods, cultural systems, values and beliefs and by assimilating information.

MCC General Education Initiatives Uses of critical thinking:

• underlies reading, writing, speaking, and listening . . . the basic elements of communication
• plays an important part in social change . . . institutions in any society - courts, governments, schools, businesses - are the products of a certain way of thinking.
• helps us uncover bias and prejudice.
• is a path to freedom form half-truths and deceptions.
• the willingness to change one point of view as we continue to examine and re-examine ideas that may seem obvious. Such thinking takes time and the willingness to say three subversive words: I don't know.

Critical thinkers: distinguish between fact and opinion; ask questions; make detailed observations; uncover assumptions and define their terms; and make assertions based on sound logic and solid evidence.
Ellis, D. Becoming a Master Student

Critical Readers Are:

• willing to spend time reflecting on the ideas presented in their reading assignments
• able to evaluate and solve problems while reading rather than merely compile a set of facts to be memorized
• logical thinkers
• diligent in seeking out the truth
• eager to express their thoughts on a topic
• seekers of alternative views on a topic
• open to new ideas that may not necessarily agree with their previous thought on a topic
• able to base their judgments on ideas and evidence
• able to recognize errors in thought and persuasion as well as to recognize good arguments
• willing to take a critical stance on issues
• able to ask penetrating and thought-provoking questions to evaluate ideas
• in touch with their personal thoughts and ideas about a topic
• willing to reassess their views when new or discordant evidence is introduced and evaluated
• able to identify arguments and issues
• able to see connections between topics and use knowledge from other disciplines to enhance their reading and learning experiences

Schumm, J. S. and Post, S. A. Executive Learning

NOTE: If you want to learn about trend following trading in general there is one definitive text: the bestselling classic "Trend Following: How Great Traders Make Millions in Up or Down Markets" by Michael Covel. If you want to learn about the most famous group of trained trend following traders, the Turtles and their teacher Richard Dennis, "The Complete TurtleTrader" by Michael Covel is the only complete biography (with all of the Turtle rules) available. If you want to learn trend following techniques and systems through advanced home study and or seminars click here.

Download PDF report.

Michael Mauboussin offers clarity on outliers in trading. While Mauboussin concludes standard finance theory has little to say on the subject, we note Trend Followers regularly hunt and win outliers in the trading game.

Bell Curve and Outliers
Full House The Spread of Excellence From Plato to Darwin

NOTE: If you want to learn about trend following trading in general there is one definitive text: the bestselling classic "Trend Following: How Great Traders Make Millions in Up or Down Markets" by Michael Covel. If you want to learn about the most famous group of trained trend following traders, the Turtles and their teacher Richard Dennis, "The Complete TurtleTrader" by Michael Covel is the only complete biography (with all of the Turtle rules) available. If you want to learn trend following techniques and systems through advanced home study and or seminars click here.

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...winning traders can only profit to the extent that other traders are willing to lose. Traders are willing to lose when they obtain external benefits from trading. The most important external benefits are expected returns from holding risky securities that represent deferred consumption. Hedging and gambling provide other external benefits. Markets would not exist without utilitarian traders. Their trading losses fund the winning traders who make prices efficient and provide liquidity.
Lawrence E. Harris (homepage)
Chair in Finance, University of Southern California

Download the Adobe .pdf report. This free report is about zero-sum trading, the single biggest reason Trend Followers win. In the long run, winners profit from trading because they have some consistent advantages allowing them to win slightly more often and, upon occasion, far larger profits than losers. Trend Following provides those consistent advantages.

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Some trend followers made +40% for the single month of October 2008 alone. Think about that. The rest of the world is going under and trend followers are making a killing. Earth to CNBC.

If you are still thinking that buy and hold will bounce back, did you just notice that January 2009 was the biggest drop ever for the stock market in the month of January? Time to learn why trend following made a fortune in 2008.

Several professional trend followers made over +100% returns for 2008. The S&P drops -38% & trend followers make a fortune. Can you afford to not know how they did it?

I think the book [Trend Following] did a superb job of covering the philosophy and thinking behind trend following (basically, why it works). You might call it the 'Market Wizards' of trend following.

Michael Covel's 'Trend Following': essential.

Michael Covel has written the definitive book on trend following...he has captured the essence of the most successful of all trading strategies...This enjoyable and well written book is destined to become a classic.

Michael Covel's 'Trend Following' is a breakthrough book that captures the
essence of what really makes markets tick. Diligently researched and
comprehensive in scope, it will replace The Market Wizards as the must-read bible for a new generation of traders.

Bear Stearns, Lehman Brothers, AIG, Fannie Mae, Washington Mutual, Goldman Sachs, & Bernard Madoff are examples of what happens when you have no exit plan or you don't follow the trend (in their case down). The demise of these firms should cause every investor out there to immediately dump their mutual funds, turn off CNBC and fire their brokers. If you can do that, there is hope. There are alternatives to what has happened. There are ways to make big money. This page is proof that huge returns can be made. If you want to learn how the traders below made fortunes, we can teach you. While no one can promise returns, the philosophies and methods used to generate great returns can be learned.

The following performance reports from trend following traders show the types of returns that can be earned by sticking with systematic trend following trading systems:

• Salem Abraham (PDF)
• Dunn Capital I (PDF)
• Dunn Capital II (PDF)
• Dunn Capital III (PDF)
• Man AHL I; London (PDF)
• Man AHL II; London (PDF)
• Bob Pardo (PDF)
• Eclipse Capital (PDF)
• Liz Cheval; Turtle (PDF)
• Hyman Beck (PDF)
• Millburn (PDF)
• Superfund I (PDF)
• Superfund II (PDF)
• Bernard Drury (PDF)

Those 2008 numbers are record breaking. They are huge. Also, Liz Cheval, another original Turtle, talks about other benefits of trend following trading in this online presentation. If those documents are intriguing and if you want to learn more, we can instruct you.

• Month by Month Data: Salem Abraham
• Month by Month Data: David Harding (Winton Capital)
• Month by Month Data: Bill Dunn (Dunn Capital)
• Month by Month Data: TransTrend (Nederlands)
• Month by Month Data: William Eckhardt
• Month by Month Data: Tom Shanks (Turtle)
• Month by Month Data: Liz Cheval (Turtle)
• Month by Month Data: Bob Pardo
• Month by Month Data: Jerry Parker (Turtle)
• Month by Month Data: Michael Clarke
• Month by Month Data: Bernard Drury

Below are top trend following traders' performance charts compared to major stock indexes:

• Abraham Trading compared to U.S. indexes.
• Abraham Trading compared to world indexes.
• Aspect Capital compared to U.S. indexes.
• Aspect Capital compared to world indexes.
• Chesapeake Capital compared to U.S. indexes.
• Chesapeake Capital compared to world indexes.
• Clarke Capital compared to U.S. indexes.
• Clarke Capital compared to world indexes.
• Drury Capital compared to U.S. indexes.
• Drury Capital compared to world indexes.
• Dunn Capital compared to U.S. indexes.
• Dunn Capital compared to world indexes.
• Eckhardt Trading compared to U.S. indexes.
• Eckhardt Trading compared to world indexes.
• Eclipse Capital compared to U.S. indexes.
• Eclipse Capital compared to world indexes.
• EMC Capital compared to U.S. indexes.
• EMC Capital compared to world indexes.
• Hawksbill Capital compared to U.S. indexes.
• Hawksbill Capital compared to world indexes.
• Hyman Beck compared to U.S. indexes.
• Hyman Beck compared to world indexes.
• Man compared to U.S. indexes.
• Man compared to world indexes.
• Millburn compared to U.S. indexes.
• Millburn compared to world indexes.
• Rabar compared to U.S. indexes.
• Rabar compared to world indexes.
• Saxon compared to U.S. indexes.
• Saxon compared to world indexes.
• Transtrend compared to U.S. indexes.
• Transtrend compared to world indexes.
• Winton Capital compared to U.S. indexes.
• Winton Capital compared to world indexes.

• Chart 1
• Chart 2
• Chart 3
• Chart 4
• Chart 5
• Chart 6

Trend following methods can be used on stocks, ETFs, LEAPs, futures, currencies and all commodities.

• Back Test 1
• Back Test 2

The universal chart example must be read by all.

More examples of trend following performance over the last 30 years are in the book Trend Following.

• Trend following emphasizes diversification (example chart).
• Trend following has little to no correlation with long only stocks.
• Trend following's higher returns compound exponentially.
• Trend following is patient. It waits for opportunities.
• Trend following reacts to real events. No prediction.
• Trend following profits in up and down markets.
• Trend following profits across stocks, commodities, currencies, etc.
• Trend following trades exchange traded instruments. Transparency!

We can not promise you will earn like returns of the traders, charts or examples (real or hypothetical) mentioned within this site. All past performance is not necessarily an indication of future results. Data presented is for educational purposes. This information is not designed to be used as an invitation for investment with any adviser profiled. All data on this site is direct from the CFTC, SEC, Yahoo Finance, Google and disclosure documents by managers mentioned herein. We assume all data to be accurate, but assume no responsibility for errors, omissions or clerical errors made by sources.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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Some people focus on the past results of a trading system to gauge its success. Others only think about what happened last month. Both are wrong.

A great trend following system, adapts to change. Trend Following successfully trades the charts below. Moreover, these 3 charts have no dates or times on them. Why? That information couldn?t matter less. Neither is there any mention of what market is being examined.

Universal Chart Example #1

Universal Chart Example #2

Universal Chart Example #3

Why no specific information on the charts? Why doesn't it matter? Markets trend. They have trended for hundreds of years. If you know markets trend, and the price is the key, why does it matter what market the chart even represents?

Take a close look at 1 and 2 and see if you can guess the market. What's the relationship? It's the Japanese Yen and Cisco from the 1990s and the dot com bubble. There is no relationship, that's the point.