Dancing with the Trend

January 2018

Dancing with the Trend

Building a Rules-Based Trend Following Model - 3

by Greg Morris

We are still in the preliminary stages of defining tools that will be used in the rules-based trend following model. Here I want to explain a unique concept I call Compound Digital Measures.  They are an advanced form of the Digital Measures discussed in the BaR-BTFM – 2 (Building a Rules-Based Trend Following Model). Chart A will help you understand how a compound measure works.  First, you need to know that this is not a complex system, as the signals work whenever two of the three indicators are in agreement, the compound measure moves in Read More 

Dancing with the Trend

Did 2017 Meet Your Expectations?

by Greg Morris

Welcome to 2018!  I was born in the 1940s and am delighted to be here.  If you were a trend follower with reasonable stop placement, 2017 was a fabulous year.  If you were a buy and hold investor in most stocks, then 2017 was a fabulous year.  If you were a market timer and always trying to guess the top, 2017 probably wasn’t so great.  I realize there are many other successful categories of investors, but hopefully my message is succinct.  Chart A shows the Nasdaq Composite (red), the Dow Industrials (orange), the S&P 500 (blue), and the Russell Read More 

Dancing with the Trend

Building a Rules-Based Trend Following Model - 2

by Greg Morris

In my first article of this series I outlined the concepts that would be discussed in this series. See HERE.  In this article we need to discuss some of the building blocks that will be used and how to interpret them. Description of Binary and Analog Measures I actually prefer to call them digital measures because they can yield more than two signals.  Binary means that it only gives two signals; it is either on or off similar to a simple digital signal.  Hence, going forward we will call them digital measures as I have a technique of using multiple digital signals that Read More 

Dancing with the Trend

Building a Rules-Based Trend Following Model

by Greg Morris

I’m going to start a new series of articles on building a rules-based trend following model.  For a host of reasons, I cannot provide readers complete details of the trend following model I currently use, but I can simulate most of the concepts in various examples, so you will have a good feel for how it works and what is required.  This article will lay out some of the concepts I plan on covering over the next few months.  I’m quite sure this series will be interspersed with articles on other topics, so I’ll use my normal article titling by adding 2, 3, etc. to the above Read More