Why Trend Following Works | Systematic Investor | Ep.391

Описание: What if trends in financial markets are not anomalies, but the natural consequence of how markets function? In this episode, Niels and Richard explore the structural foundations of trend following. Drawing on research spanning 68 futures markets across four decades, Richard explains why markets exhibit persistent trends, fat-tailed returns, and volatility clustering. The discussion moves from oil market shocks to deeper questions about feedback loops, participant behavior, and regime shifts in financial markets. The conclusion is striking: trend following does not rely on fragile patterns. It aligns with fundamental structural properties embedded in how markets actually evolve.

#toptraders #investing #trendfollowing

Episode TimeStamps:
00:00 - Introduction to the Systematic Investor Series
02:08 - Oil market shock and the structural setup behind the spike
06:10 - Why calm markets can hide explosive potential
11:47 - How oil shocks ripple through inflation and the global economy
15:29 - Why trend followers focus on process, not predictions
22:15 - A changing regime that may favor trend following
24:43 - The research behind The Fractals of Finance
25:25 - Market memory and the meaning of the Hurst exponent
31:22 - Why trends are structural rather than random patterns
36:25 - Fat tails and why extreme market moves are far more common than expected
41:12 - Divergent vs convergent market participants
45:29 - The hidden risks in traditional volatility targeting
49:33 - Phase transitions and regime shifts in markets
55:33 - Why trend following aligns with market structure
59:02 - Oil shocks, inflation risks, and the next potential market regime

Full episode can be found here:
https://toptradsersunplugged.com/si391

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