Trend Following
Trend Following is a type of momentum strategy
- Also known as Time-Series or Absolute
- Formula:
- Ask the following question: Is the current price higher than it was at some defined point in the past
- If the answer is yes, then buy it
- If the answer is no, then sell it, short it or do nothing (if you don't own it)
- Have the benefit of being able to prosper in both bull and bear markets (can follow the trend up or down)