Start with the Trend 📈

"Whatever method you use to enter trades, the most critical thing is that if there is a major trend, your approach should assure that you get in that trend." - Richard Dennis Breakouts ensure you catch every trend, while pullbacks risk missing the move entirely. Systems that patiently wait for breaks of key levels assure participation in big price swings. Don't second guess - have clear rules to run with the herd, not against it.

Ride the Wave, Manage Risks Wisely 🚢

"A good trend following system will keep you in the market until there is evidence that the trend has changed." - Richard Dennis Once in a trade, let profits run by trailing stops with the trend. Loose stops prevent whipsaws but wide buffers allow room for normal retracements within a prevailing drift. Cut losses fast on trends that reverse while letting winners breathe to maximize gains over many trades.

Stick with Your Plan ✅

"When you have a position, you put it on for a reason, and you've got to keep it until the reason no longer exists." - Richard Dennis It's hard watching profits, yet fearing loss more than missing opportunity is a sure path to failure. Exit only on your pre-defined terms, not weak moments of doubt. Consistently apply a tested strategy through thick and thin to reap full rewards over the long-haul.

Expect Surprises, Doubt Conventions 🤯

"You should expect the unexpected in this business; expect the extreme. Don’t think in terms of boundaries that limit what the market might do." - Richard Dennis Markets evolve, so set aside biases to see with an open mind. Question all “truths” and trust evidence from persistent testing alone. Big moves often start beyond where most believe possible. Be willing to take the road less traveled to find your own ascertain.

Follow Rules Relentlessly 💪

"You could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline." - Richard Dennis Formulating strategies is relatively easy - execution when drawdowns strike is another matter entirely. Only true discipline, not willpower or intelligence, ensures rules withstand volatility's test. Trading wisdom distilled over decades show the way for patient discipline's prospects.

In conclusion

Dennis’ lessons highlight evidence-based rigorous systems applied with stoic, unemotional discipline as the path to profitability. His teachings show that consistent rule-following, managing risks wisely, and doubting conventions are timeless principles still highly relevant for traders today.


Some Frequently Asked Questions.

Trading breakouts ensures you will catch every trend since it guarantees you will enter the market as the trend is starting. Pullbacks risk missing the trend altogether if the market doesn't retrace at all. Breakouts are the most reliable way to participate in every trend movement.

The best way to trail a stop loss is to use a wide and dynamic trailing stop that moves with the prevailing trend. This allows the position to breathe during normal retracements while ensuring you stay in a trending market. Using techniques like moving averages or average true range can help traders dynamically trail stops as price moves in their favor.

It's important to stick to your trading plan because emotions often take over when you see profits or losses on paper. Only by adhering to predefined rules for entries, exits and risk management can you ensure discipline over the long run. Sticking to the plan avoids making emotional decisions and locks in the edge provided by a backtested strategy. Consistency is key for success in such a probabilistic endeavor like trading.

A basic trend following strategy is to simply buy markets that are trending up above a moving average and sell those trending down below it. Use awidestop loss to cut losses quickly while letting winners run with a trailing stop or profit target. Apply this uniformly over a diversified basket of liquid futures markets to capitalize on trends across different asset classes. Keep it simple and avoid overoptimization to allow the market's natural trends to play out over time.

A trader can build confidence in a system during drawdowns by thoroughly backtesting it over history to understand its long-term performance and expectational results. It also helps to understand the logic and motivations behind why the system is designed to work in the first place. Traders should enter a system conservatively and have the patience to let it play out over many trades. Cutting drawdowns short due to lack of confidence prevents one from achieving the system's full potential.

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