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Strategy

Trend Following

Systematically follow established trends.

Medium-termActiveRichard Donchian, Turtle Traders

Core idea

Trend following assumes that established up- or downtrends tend to persist for a while. You enter when a trend is confirmed and exit when it breaks — usually based on technical signals.

How it works

Signals come from moving averages, breakouts from trading ranges or other technical models. Risk management (stop-loss, position sizing) is central.

Pros

  • Rules can be very clear
  • Can perform strongly in powerful trends

Cons

  • Many small false signals in sideways markets
  • Requires discipline and ongoing monitoring
Known for
Richard Donchian, Turtle Traders

For educational and informational purposes — not investment advice, not a recommendation to follow this strategy.