Can Same Trend Following Strategy be used for Stocks , Commodities , Currency Trading?

Trading
1

One of the trend following strategy I used for back testing looks good although but when we talk of different asset class the risk/ reward and position sizing may differ however If we talk only about technical analysis and trends specifically I think that is same what are your views on this?

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I think so, but only for the short-term basis. Longer-term trending has different nuances among different classes or investments. But short-term fluctuations are usually product of supply and demand for which the indicators predict the same thing across all asset classes.

For longer term trends this changes as you have to factor in the underlying’s cycle and its vol. Say Crude over long term will behave very differently than Gold or USD.and similarly everything behaves differently than Crypto because it has never had a chance to form its own “long term cycle” and is thus considered extremely high vol.

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Better to test the strategy across multiple instruments. You then have a wide number of historical patterns that will test and prove to you the quality of your system.

Also for trend following systems it’s important that we select and trade with instruments that are very likely to trend in future.

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What I have so far observed on different markets , different class of assets differ somewhat on basis of Volatility and the types of cycles as you mentioned, ONE thing that really makes difference for any trend following system is the choppiness of the instruments over a period of long time, more smooth and sustained trends have proved to be the best performer in terms of POP % and absolute returns too.

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5

Instruments that are very likely to trend in future - Have to do a lot with how trending patterns behaved historically ( do you agree with this statement , what’s your experience on this ?)

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Whether something will trend in future would need bit of fundamental outlook.

I trade only in Nifty. India is a developing country so the long term trend is up. But capitalism goes through mammoth crashes every decade on an average. In between there are up and down movements in economy due to variety of reasons. So I think Nifty will keep trending into the future.