I distinctly remember corresponding with another trend following trader, from England, saying that if I had to guess, this event may act as a contrarian signal that would lead to large gains for trend followers, similar to 2008.
And since last November, there are have indeed been some truly extraordinary trends in a wide variety of markets. Using my quadruple moving average system, the foundation of all of my charts, would have generated some clear, objective and profitable trading signals. Below are a few examples:
The chart above shows the Russell 2000. A buy signal was generated near the beginning of December and, since then, the index has blasted higher, much to the frustration and embarrassment of the vast majority of other bloggers out there who have tried to call a top in this market.
The great thing about being a top picker is that you will always end up being right, eventually. The downside, however, is that tend they to lose money over the long run, which is likely why they have to resort to selling newsletters, or cover their website with annoying ads, whereas trend following traders just tend to trade, in silence.
Next, we have a chart of the Japanese Yen. A black and white, unambiguous, objective sell signal was generated in mid-October.
Thirdly, a sell signal was generated in gold near the beginning of December. Since then, gold was simply not buyable for me and I have forgotten about the metal, deploying my capital in more productive areas.
