The power of Trend investing-catch mega trends before masses

Trend Investing: Invest in the Future, By Spotting Trends Before They Cultivate

Contrary to Popular Belief, Trend Investing is Not Merely Following the Herd, It Involves Discerning the Truth Behind the Façade, and Picking Trends That Haven’t Occurred. Don’t Be Fooled by the Hype, Focus on the Underlying Reality, Not the Perception Types. Dismiss the Crowds, Trust Your Instincts, Analyze the Facts, and Seek the Unseen Paths. So Be a Maverick Investor, and Stand Out From the Rest, By Spotting Trends Before They’re at Their Best.”

The main principle of trend investing is not to focus on the noise factor but to pay attention to the “reality factor”. In other words, trend investing focuses on what is going on minus the morality or judgemental angle.

Stay Ahead of the Curve, by Identifying Trends Before They Emerge

In trend investing, personal opinions and beliefs are considered to be irrelevant and are disregarded in favour of objective market data and analysis. The focus is on identifying patterns and trends in the market and making investment decisions based on that data, rather than relying on personal opinions, emotions, or biases. By doing so, trend investing aims to provide a more systematic and data-driven approach to investing, which can help to reduce the impact of personal opinions and emotions on investment decisions.

Over time it gets easier and easier. Practice and repetition are key to improvement and mastery. This also applies to trend investing, where regularly analyzing market data and trends can help to develop a keen eye for spotting new trends and patterns. Additionally, it is important to maintain a disciplined and objective approach and to avoid allowing emotions and biases to influence investment decisions. By doing so, it becomes easier to identify new trends and make informed investment decisions based on objective data and analysis. So, start practising today, rather than waiting for tomorrow, in order to continuously improve one’s skills and knowledge.

Trend investing: Your Emotions should not dictate what you do

In trend investing, it is important to avoid letting emotions dictate investment decisions. Emotions such as fear, greed, and excitement can cloud judgement and lead to impulsive, ill-advised decisions. By taking an objective, data-driven approach to invest, trend investors aim to minimize the impact of emotions on their investment decisions and instead focus on the reality of the market and its trends. This can help to increase the chances of making informed and profitable investment decisions, rather than decisions based on emotions or personal opinions.

If you want to spot new trends you can’t allow your emotions to do the talking; once your emotions talk, logic goes out the window and stupidity

Trend Investing states that a Trend in Motion Is unstoppable

In trend investing, the idea that a trend in motion is unstoppable is a key concept. The focus is on identifying and investing in established trends, which can persist regardless of any external factors such as news, opinions, or the economy. By doing so, trend investors aim to capitalize on the momentum of these trends and potentially reap the rewards, rather than opposing them and risking losses. The example of the 2020 bull market is a perfect illustration of how trend investing can help investors to potentially profit from established market trends, despite the presence of fake news or misinformation about the economy.

One of the key benefits of trend investing. By focusing on the reality of market trends, rather than the distorted picture portrayed by the media, trend investors can potentially make informed and profitable investment decisions. The strategy of using strong pullbacks as opportunities to open new long positions, rather than shorting the markets, is in line with this approach, as it seeks to capitalize on the momentum of established trends, rather than betting against them. The idea of selling when the masses are dancing and buying when they are nervous aligns with the principle of buying low and selling high, and can potentially help trend investors to buy assets at a lower price and sell them when their value has increased. By doing so, trend investors can potentially increase their chances of making profitable investment decisions.

Trend investing states that the trend is your friend, and everything else is your foe. By following market trends, trend investors aim to profit from established market movements and avoid being caught on the wrong side of the trade. On the other hand, mass psychology often leads investors to act counter to the trend, causing them to miss out on potential profits and potentially incur losses. That’s why trend investing emphasizes the importance of focusing on the trend and avoiding the influence of emotions, news, and popular opinion.

References and links on trend investing:

Investopedia – Trend Investing: https://www.investopedia.com/terms/t/trendinvesting.asp
The Balance – Trend Investing: https://www.thebalance.com/trend-investing-definition-357501
Tradeciety – Trend Investing: https://tradeciety.com/trend-investing/
Wealthfront – Trend Investing: https://www.wealthfront.com/knowledge-center/investing/trend-investing
Tactical Investor – Trend Investing: https://www.tacticalinvestor.com/trend-investing/

Some research papers on trend investing

These papers provide academic research and insights into trend investing, including its performance, persistence, and risk-return trade-offs. They may be useful for those who want to delve deeper into the topic and gain a more comprehensive understanding of trend investing. Note that some of the papers may require access to academic databases to view.

“Trend Following in Commodity Futures Markets” by Richard M. Bookstaber and Keith C. McCullough (2005)

“A Century of Evidence on Trend-Following Investing” by AQR Capital Management (2013)
“Evidence on the persistence of momentum profits” by Narasimhan Jegadeesh and Sheridan Titman (1993)
“Trend Following with Managed Futures: The Role of Trend in Portfolio Diversification” by Elizabeth Tremblay and M. Kelly Cannon (2011)
“Trend-Following Funds, Financial Crises and Systematic Risk” by Sophie Moinas, Stijn Van Nieuwerburgh, and Lasse Pedersen (2013)