How to trade the fat tails of the stock market: Tail Watching

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  • Опубліковано 24 вер 2024
  • Free, live Tail Watching signals:
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    Tail Watching is a long-only, trend following model (i.e. Buy positions in trending assets).
    Traditional portfolio strategies follow the idea that asset prices follow a normal distribution. However, the existence of fat tails suggests that asset returns are not normally distributed, but skewed.
    The fat tails indicate that there is a probability (often larger than anticipated), that prices will move beyond 3 standard deviations. The Tail Watching model capitalizes on these tails in trending liquid markets to generate outsized returns.
    Investment philosophy of Tail Watching:
    (1) Don't predict, just ride the trend for as long as you can
    (2) Cut your losers short, let your winners run
    (3) Diversify by asset class, industry & geography

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