Turbo Charged Trend Following: Why Capturing the Market’s Biggest Trends Means Embracing High Volatility | Moritz Seibert & Moritz Heiden | Takahe Capital

Trend-following strategies operate by capturing outlier market moves across a diverse portfolio, where successful, long-duration trades offset the frequent, small losses inherent in the process. Position sizing outweighs entry timing in importance, requiring a disciplined approach that allows winning trades to run without interference from discretionary fundamental analysis or over-optimization. Unlike institutional funds that target 8-12% volatility to manage career risk, Takahe Capital employs a higher volatility approach (25-30%) to achieve capital efficiency. By treating price as the primary signal, these models maintain robustness across hundreds of markets, ranging from traditional commodities to equities. This strategy prioritizes systematic resilience over short-term smoothness, accepting drawdowns as a natural byproduct of a methodology designed to capitalize on significant, uncorrelated market trends rather than attempting to forecast specific price tops or bottoms.