Trading the Trend Podcast – EP002 – Prediction vs Reaction

Trading the Trend Podcast – EP002 – Prediction vs Reaction

This week I discuss the difference between the common prediction based approach to the stockmarket and the reaction based approach used by trend followers and trend traders over the past 100 years and more.

We look at why prediction based approaches are so popular, and why sometimes going against the herd mentality is the right thing to do when trading the financial markets. We also look at why I personally use a reaction based approach and how it has helped me to achieve 4 consecutive winning years trading the markets, as well as discussing the neuro-science behind why our brains are wired to crave a prediction based approach to the markets rather than reaction. Remember that most traders lose money in the long run on the stockmarket. As a result, we often need to look outside the norm to find solutions in which we can gain an edge.

The Trading the Trend podcast was created by active trader Chris Chillingworth to share insight, ideas, tips and experience on how to improve as a trend following trader. Self described as a british bearded trend follower who likes metal music, bacon and formula one racing.

Trend Following is a strategy that does not make predictions on the stockmarket, but instead looks at reacting to what the price of a market is actually doing. There is no attempt to be right, on the contrary, Trend Followers expect to be wrong most of the time. They focus on killing losses quickly and letting winners run to ensure profitability.

Trend following does not utilise fundamental data to form opinions on what the markets are about to do. It is all about finding a system that works and focusing your energies on executing it accurately.

To contact me you can reach me at the following:-

Email: chris@chrischillingworth.com

Twitter: @chrischilliuk

Facebook Group: https://www.facebook.com/groups/tradingthetrend/

 

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