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Trend Investing Whip-Saw Reality

On August 8th, our MA200S trend signal for the German DAX index turned down. The MA200S is not a signal that we normally publish. However, since I am acting on it myself, I think I owe you this type of information for transparency reasons.

 

Yesterday after the big up-swing in European stock market indices, the MA200S for the DAX has turned up again. Thus next week, I will invest again in DAX related index funds.

 

This movement in the DAX and the MA200S trend signal is a typical example of whip-sawing.


This happens. The signal indicated that the long-term trend is moving down. And then the price action reverses and the signal turns back up again within a matter of weeks or months.

 

Not Trend Following But Trend Investing

There is Trend Following and there is Trend Investing. There are similarities and there are differences. Sometimes one is better and sometimes the other one is more feasible.

For Trend Following, the best source is probably the podcast and blog of Michael Covel. For any trader in the financial markets, this is a must listen and read.

In general Trend Following the financial markets has the following characteristics:

 

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How to invest my savings in a reasonable safe way to get good long-term returns on my investments? That is the main problem I wanted to address.

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