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I am talking about CTAs (Commodity Trading Advisors) which are typically trend-following algos that exaggerate market amplitudes.
They can be very effective during long bull markets. But during volatile bear markets, they become loss-making machines, bidding the highs and selling the lows.
The Market Ear has more.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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