{"id":27077,"date":"2026-08-26T08:00:00","date_gmt":"2026-08-26T06:00:00","guid":{"rendered":"https:\/\/trendfollowingtraders.com\/en\/?p=27077"},"modified":"2026-08-22T18:14:32","modified_gmt":"2026-08-22T16:14:32","slug":"short-and-long-term-trend-following","status":"publish","type":"post","link":"https:\/\/trendfollowingtraders.com\/en\/short-and-long-term-trend-following\/","title":{"rendered":"How to Make Money with Trend Following: Short and Long Term"},"content":{"rendered":"<div style=\"position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; margin: 1.5em 0;\"><iframe style=\"position: absolute; top: 0; left: 0; width: 100%; height: 100%; border: 0;\" title=\"How to Make Money with Trend Following: Short and Long Term\" src=\"https:\/\/www.youtube.com\/embed\/hZ1AtJj8B2M\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<p style=\"text-align: justify;\"><strong>Short and long term trend following<\/strong> is the way our method sets out to generate profit: we manage risk right away, with small controlled costs every single day, and then give the market the time that profits need in order to mature \u2014 applying the very same logic across two horizons, a handful of large trends over the long run and weekly and monthly objectives over the short run.<\/p>\n<p style=\"text-align: justify;\">This article doesn&#8217;t start from the basics \u2014 instead it tells the house&#8217;s proprietary angle: the &#8220;leverage of time&#8221; as the real engine of profit, exactly as our founder Stefano Mastria explains it in the video, and the way we make it measurable through backtests, MFE and the quant strategies of the community DB Strategie.<\/p>\n<h2 style=\"text-align: justify;\">What is the &#8220;leverage of time&#8221; in trend following?<\/h2>\n<p style=\"text-align: justify;\">When people hear &#8220;leverage&#8221;, almost everyone thinks of financial leverage. In the video we explain that the most important leverage is actually a different one: time. The purpose of trend following is to hook onto a trend with a position that is small in terms of risk, and then let it grow in value as the move develops. But a trend needs time to express itself, and to grant the market that time we cannot afford to be swept out by every adverse swing. It is a principle that, as Stefano Mastria recounts, comes from the books of two reference authors \u2014 Joe Ross and <a href=\"https:\/\/en.wikipedia.org\/wiki\/Larry_R._Williams\" target=\"_blank\" rel=\"noopener noreferrer\">Larry Williams<\/a> \u2014 recommended on the channel ever since it opened, back in 2014: niche texts, old but always current, with lessons that never age.<\/p>\n<p style=\"text-align: justify;\"><img decoding=\"async\" class=\"alignright\" style=\"max-width: 46%; height: auto;\" src=\"https:\/\/trendfollowingtraders.com\/en\/wp-content\/uploads\/2026\/08\/short-and-long-term-trend-following-time-leverage.png\" alt=\"The leverage of time in short and long term trend following: manage risk now, give the market time and let profit mature.\" width=\"360\" \/>The logical sequence of the leverage of time is precise: risk management first, then the time granted to the market, and finally the maturing of profit. This isn&#8217;t a detail \u2014 it&#8217;s the order that makes everything else possible. Administering the small daily costs well \u2014 the controlled losses \u2014 is what gives us access to profits, because it lets us stay in a position long enough to let the wide moves run. These are, at heart, basic rules of trend following that the ordinary retail trader often doesn&#8217;t know: secrets that were always right under our nose.<\/p>\n<blockquote><p>&#8220;The leverage of time is the most important leverage we can use in trading.&#8221;<\/p><\/blockquote>\n<h2 style=\"text-align: justify;\">Why is risk management the core of the method?<\/h2>\n<p style=\"text-align: justify;\">If time is the leverage, risk management is the hand that works it. Our daily job is not to hunt for the perfect trade, but to administer risk precisely and quickly every day, event after event, with small and controlled costs. It is this discipline that builds, piece by piece, the path toward profit: profits need time to mature, but to grant the market that time we need to manage risk.<\/p>\n<p style=\"text-align: justify;\">This is why we say the core of the business is risk management: not the signals, not the perfect entry, but the ability to keep losses small so we can wait for the few moves that pay for everything else. It is the same principle at the heart of sound risk management and money management: manage first, profit later.<\/p>\n<h2 style=\"text-align: justify;\">What is the retail trader&#8217;s mistake?<\/h2>\n<p style=\"text-align: justify;\">The most common retail mistake is to do exactly the opposite of what is needed. Beginners tend to close winning positions right away \u2014 in a hurry to &#8220;bank&#8221; the gain \u2014 and to let losses run, hoping the market will come back. The correct method flips this habit on its head: costs are managed quickly and precisely, profits are left to mature.<\/p>\n<blockquote><p>&#8220;When retail traders start out, they do the exact opposite [\u2026] they close the winning position right away and instead let the costs run.&#8221;<\/p><\/blockquote>\n<p style=\"text-align: justify;\">Then there&#8217;s a second mistake: looking for the one perfect strategy that works for everyone. It doesn&#8217;t exist \u2014 or, if it does, we don&#8217;t know it; even the great trend followers who wrote the books we started from say the same. Everyone has to find their own system and their own strategies according to their needs. And this is where the method splits into two complementary tools that start from the same need \u2014 to profit \u2014 but pursue it in different ways: the long-term tools and the short-term tools.<\/p>\n<h2 style=\"text-align: justify;\">How does long term trend following aim to profit?<\/h2>\n<p style=\"text-align: justify;\">Classic, long-term trend following aims to profit by producing wide or very wide gains after a series of fruitless attempts in which we managed risk well. The profile is typical and has to be accepted in advance: a <strong>low win rate<\/strong> (fewer than half the trades win) but potentially very high returns when the big move finally arrives. In backtest, for example, in a favourable year like 2019 the same logic showed very substantial profits after long stretches of nothing but small costs \u2014 a historical simulation figure, not a result that repeats on command. Backtests describe past behaviour and do not guarantee real or future results.<\/p>\n<p style=\"text-align: justify;\">Each strategy is built with StrategyQuant and then optimized with artificial intelligence, using two different systems. The backtest data we study comes from StrategyQuant, of high quality, computed on a calculation setup comparable to that of a large fund \u2014 not &#8220;homemade&#8221; numbers. On this ground we work on quantitative trading and StrategyQuant, the technical backbone of our short and long term trend following.<\/p>\n<h2 style=\"text-align: justify;\">What is MFE (Maximum Favorable Excursion) and why does it matter?<\/h2>\n<p style=\"text-align: justify;\"><img decoding=\"async\" class=\"alignleft\" style=\"max-width: 46%; height: auto;\" src=\"https:\/\/trendfollowingtraders.com\/en\/wp-content\/uploads\/2026\/08\/short-and-long-term-trend-following-mfe.png\" alt=\"MFE, Maximum Favorable Excursion: the profit a strategy held but did not capture, the basis for optimization in short and long term trend following.\" width=\"360\" \/>MFE \u2014 <em>Maximum Favorable Excursion<\/em> \u2014 is the profit a strategy &#8220;had in hand&#8221; during a trade but did not manage to capture. In the video we also call it &#8220;profit left on the table&#8221;. A teaching example drawn from the backtests: a trade closed with a $200 cost had earlier touched a favourable excursion of $4,900. In other words, the strategy had a large potential profit and did not hold onto it \u2014 these are historical simulation figures, useful for understanding behaviour, not promises of gain.<\/p>\n<p style=\"text-align: justify;\">Studying what a strategy leaves on the table is the ground on which optimizations are built. This is why Stefano Mastria developed, together with artificial intelligence, a backtest analysis platform that makes it possible to see in detail what a system captures and what it lets slip. It is the same work behind optimizing strategies with MFE and AI: MFE turns a vague impression (&#8220;we could have taken more&#8221;) into a measure you can actually act on.<\/p>\n<h2 style=\"text-align: justify;\">How do the short term tools work?<\/h2>\n<p style=\"text-align: justify;\"><img decoding=\"async\" class=\"alignright\" style=\"max-width: 46%; height: auto;\" src=\"https:\/\/trendfollowingtraders.com\/en\/wp-content\/uploads\/2026\/08\/short-and-long-term-trend-following-short-vs-long.png\" alt=\"Short and long term trend following compared: continuity and weekly targets versus magnitude and a few big trends.\" width=\"360\" \/>The short-term tools are designed to produce more within the week and the month, giving more continuity. In the DB Strategie rankings, for these solutions, we no longer look at the years in profit but at the months and the weeks.<\/p>\n<p style=\"text-align: justify;\">One variant we describe in the video sets a weekly objective: when the strategy reaches it, it stops issuing trades until the following week. It can be run fully automatically or semi-automatically, with the operator capturing a profit compatible with their own account and stopping trading for that week.<\/p>\n<p style=\"text-align: justify;\">Another tool is the trailing stop, which shifts the engine&#8217;s activity more toward the short term and improves its yield, while overall earning less than a classic trend-following strategy. In our operations the strategies do roughly 80% of the work automatically \u2014 this is a description of how they work, not a guarantee that automation produces profit.<\/p>\n<p style=\"text-align: justify;\">This is the short-term face of our short and long term trend following, and it has its roots in the tradition of short-term trading pioneered by Larry Williams. The same solutions we use for our own activity are available to community members in the reserved area, as research and production tools \u2014 not as promises of return.<\/p>\n<h2 style=\"text-align: justify;\">Continuity or magnitude: how to choose in short and long term trend following?<\/h2>\n<p style=\"text-align: justify;\">On the scales we always weigh continuity against the big end-of-year profit. If we want more continuity, we accept a smaller profit over the long run but a more frequent one over the short run; if we want a very high year-end result, we have to give up part of the short-term activity. There is no absolutely &#8220;right&#8221; track: short and long term trend following is precisely the art of balancing these two objectives according to your own needs and your own tolerance for risk.<\/p>\n<p style=\"text-align: justify;\">With several well-optimized strategies you can work on multiple markets in parallel, even with more than one prop trading firm, building tools that in certain years \u2014 in backtest \u2014 produced large results. This is a long-term expectation, not a certainty: prop trading and leverage cut both ways and amplify losses as much as profits. The rule stays the one we started from: we manage risk every day with small costs, and let the leverage of time do the heavy lifting. That is how we understand short and long term trend following \u2014 a method, not a shortcut.<\/p>\n<h2 style=\"text-align: justify;\">Frequently asked questions about short and long term trend following<\/h2>\n<h3>What is the leverage of time?<\/h3>\n<p>The leverage of time is the idea, central to our method, that the most powerful leverage in trading is not the financial one but time. Profits need time to mature; to grant the market that time you have to manage risk with small controlled costs, so you can stay in a position long enough to let the wide moves run.<\/p>\n<h3>What is the difference between short and long term trend following?<\/h3>\n<p>The long term (classic trend following) seeks magnitude: few trades, a low win rate, but potentially very wide profits when the big move arrives. The short term seeks continuity: weekly and monthly objectives, more trades, more frequent but on average more contained profits. They are two tracks of the same method, to be balanced according to your own needs.<\/p>\n<h3>What is MFE, the &#8220;profit left on the table&#8221;?<\/h3>\n<p>MFE (Maximum Favorable Excursion) is the maximum favourable excursion a trade had reached before it closed: the profit the strategy &#8220;had in hand&#8221; but did not capture. Studying the profit left on the table helps you understand where a system can be optimized. It is an analysis measure, not a realized gain.<\/p>\n<h3>Do backtest data guarantee future profits?<\/h3>\n<p>No. All the figures cited \u2014 profits, percentages, MFE excursions, months and weeks in profit \u2014 are historical or simulated backtest data. A backtest describes how a strategy behaved on past data and does not in any way guarantee real or future results. Trading carries a concrete risk of losing capital.<\/p>\n<h3>Is this article investment advice?<\/h3>\n<p>No. It is for informational and educational purposes only and recounts the method and opinions of our founder as presented in a video. It is not financial advice nor a solicitation to trade. No result is guaranteed and every decision remains the reader&#8217;s responsibility.<\/p>\n<hr \/>\n<p style=\"text-align: justify;\"><em>The contents of this article are for informational and educational purposes only and report the method and personal opinions of the founder of Trend Following Traders as presented in a video on the channel; they do not constitute financial advice nor an invitation to trade. All figures cited (MFE excursions, profits, percentages of months and weeks in profit, annual results, worst month) are historical or simulated backtest data: backtest results do not in any way guarantee real or future results.<\/em><\/p>\n<p style=\"text-align: justify;\"><em>The references to the community DB Strategie, to the quant strategies, to optimization with artificial intelligence and to prop trading describe research and production tools, not promises of return. No profit is guaranteed: trading and trend following, like the use of financial leverage and prop trading, carry a concrete risk of losing capital.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Short and long term trend following: how the leverage of time, risk management and MFE drive our quant method. Backtest data, not a promise of returns.<\/p>\n","protected":false},"author":2,"featured_media":27096,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","rank_math_title":"How to Make Money with Short and Long Term Trend Following","rank_math_description":"Short and long term trend following: how the leverage of time, risk management and MFE drive our quant method. 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