Noddy's Guide To Trend Following

Jul. 01, 2013 5:00 AM ET

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Seeking Alpha Analyst Since 2013

Anthony Garner is a British national based in London. He left investment banking in 1992 in favour of a long cherished aim to work for himself and since 1995 has been trading financial markets for his own account, as well as having established, run or acted as consultant to a number of hedge funds. For some years now his interest has concentrated on designing, testing and trading mechanical strategies, since his years inside the financial industry convinced him that for the majority, the discipline of systematic trading is a better way to go. He is the author of "A Practical Guide to ETF Trading Systems" published by Harriman House and has also written articles on trading and investment for a number of publications. After education at Westminster School, Oxford University and The College of Law, Anthony qualified and practiced as a solicitor with the leading London law firm of Slaughter and May, specialising in company and commercial law. Anthony then moved to Swiss Bank Corporation International (SBCI), the investment banking arm of Swiss Bank Corporation (now merged with UBS) first as an in-house attorney and then as an analyst, producing institutional research on South East Asian stock markets including Hong Kong, Singapore and Malaysia. Anthony spent a year in Tokyo assisting with the establishment of SBCI’s equity operations in Japan followed by postings to Hong Kong, Singapore and Zurich covering the Asian equity markets.

Say hello to dear little Noddy! Give him a merry wave please as he toddles by in his little red and yellow car on his way to meet Biggy Ears in his little toadstool house. Follow his adventures as he battles with the terrifying Goblins, Sly and Gobbo. Comfort him when he is scolded by severe Mr Plod the local policeman. Meet his friends Bumpy Dog, the Wobbly Man and the rest of the gang.

If you are a Brit, you will know just what I am talking about. Noddy is the delightful creation of Enid Blighton in her charming series of books for toddlers.

What is the relevance to trend following?

Well, like Noddy, trend following is very, very simple. Anyone who tells you otherwise is trying to sell you something. And certainly they are pulling the wool over your eyes. I am going to be writing a series of Blogs over the next few months designed to keep the neophyte away from the voracious and useless systems salesmen and the shark infested waters of trading rooms.

There are doubtless a few genuine people out there who provide some sort of value for money but the overwhelming majority are frauds who do not even trade and yet charge thousands of dollars for curve fitted rubbish.

All the beginner actually needs is the simple guide that I intend to provide, a reliable end of day data source and a good back testing engine. And a few good books. Emphasis on "good" - again there is much bewildering and useless rubbish out there.

Will the trend following trader make money? I don't know - that is up to him, his psychological make up, his discipline, the markets and, frankly, a lot of blind luck. Trend followers have made fortunes over the past few decades. Equally, some have lost fortunes. The markets need to smile on you and you need to be aware that conditions change and so must your systems.

My belief is that Trend Following will continue to prosper once significant and long lasting trends re-emerge after the past few difficult years. But I am a mere mortal and no oracle, Delphic or otherwise. At least however I hope to keep you out of the hands of the greedy and useless world of trading salesmen.

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