|A while back, I edited the thread header to include momentum and trend following. Personally, I find that they work well with EW. During periods when confidence in EW forecasts is high, position size can be increased. For example, this happened with Wave 1 of 3 breakout after Brexit last year.|
Another point - even for active traders, "parking" funds not currently used for trading in "relatively" safer trend following systems MAY be satisfying.
Below is an article by Antonacci, summarizing his work on the so called dual momentum (combined relative momentum AND intrinsic, aka absolute, or time series). His (very high) total return numbers, IMO, are skewed by picking year 1974 as the starting point. That was the year of a huge low in the markets - for the most part, it was all up since then. Moreover, absolute momentum works best during bear markets -- and we had 2 big ones, in 2001 and 2008.
Take everything with a grain of salt - especially where dollars are concerned... lol.