There are a lot of prevailing ideas concerning the most profitable methods of making money through stocks. In these conversations, market trend following doesn’t always get the consideration that it might deserve. To a large extent, the problem many have with it is that it revolves around a very simple philosophy. Some investors may feel that something so straightforward could not possibly be effective in something as complex as the market. That is why it hasn’t been used before this point. What many are missing is that while there certainly was no method that was referred to as “market trend timing”, the principles of market trend following have been successfully used for a very long time. These are the essentials of the origins and beginning of market trend timing strategies.
Even the most studious academic would be hard pressed to find a definite year or date in the sense of a starting point for market investing. The lack of definite facts can partially be blamed on the lack of information available the farther back one looks. But despite the issues regarding time periods and financial markets, there is some reason to believe that market investors who made profits through market believed to some degree in following the trend.
Economists, traders, and investors alike subscribed to some extent to the idea that trading with the trend was a more profitable strategy than doing anything else. Today many investors of all schools of thought would regard this as common sense. In order to profit on the market you do not invest against it.
The point of interest here however is not just the fact that these individuals profited but also that many of them spoke of hanging onto their market positions for as long as possible before exiting. This shows that in the past investors that made money through the market did so by maximizing their profitable positions. An important part of the trend approach to investing.
Using trends to make substantial amounts of money was not something that was done by a select few traders back then even. Many investors, who have achieved some degree of fame due to their profits, probably had differing approaches in terms of entering and exiting transactions. However many of them shared the same overall approach towards the trend. That is they would ride it and then get out when it became apparent that the trend was going to change.
Even though there is no defined starting date for the trend following philosophy, the ideas behind market trend timing strategies have been employed by investors for years and years. Of course in the past there was no “manifesto” of sorts set up by these investors, but there are traders and speculators who took advantage of the concepts of market following when they made their profits and are now talked about today for the money they made.
Everywhere one looks there will be questions and arguments concerning the right time to enter a transaction as well as the proper time to leave a position. Despite these differences however, market timing strategies have the same approach toward trading. That is they try to make it possible to limit losses while maximizing profits through market trends.
There was no clearly written manual on market timing in the past, but nonetheless it is interesting to see that investors who profited were able to do so while staying with the trend. What is also a point to consider is that this philosophy was not present in a mere few investors, but that trading with the trends rather than other means was a fairly common approach taken by investors. When it is looked at from that point of view, those investors can be seen as the origins and beginning of market timing strategies.