This week, we discuss whether commodities are more risky to trade than equities, if a stocks-only Trend Following strategy can be profitable in the long run, if a deep drawdown is worse than a long drawdown, and the importance of over-estimating any possible drawdowns implied by a backtest. Questions answered include: should all Trend Following funds be required to provide Crisis Alpha? Is there ever a good time to override your system and trade outside of the rules? Should you always execute trades from your signals immediately, or sometimes wait for an extra confirmation? Is there an edge to be gained from seeking the perfect entry into a long-term trade? How many positions should you have open at any one time? What can be considered a good amount of leverage?
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