Trend Following Trading Education

01

Foundations of Markets & the Trend-Following Mindset Core

6 topics · Why markets trend and how trend-followers think

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What is a financial market?

Price discovery, buyers & sellers, market participants

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Why do trends exist?

Behavioral finance, momentum, institutional flow

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Market structure & macro context

Bull/bear cycles, volatility regimes, rate environments — when trend-following works and why

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Trading psychology — Part I

FOMO, revenge trading, process vs. outcome quality — before real money is on the line

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Rules-based vs. discretionary trading

Why systematic approaches reduce emotional decision-making

🗂️

Reading a price chart

OHLC bars, candlesticks, volume, timeframes

Instructor note: Introduce psychology and macro context here rather than saving them for the end — they're foundational filters for everything that follows. A student who understands why environments matter won't confuse a bad market with a bad strategy.

02

Asset Classes & Instruments Core

5 topics · What you can trade and how each market behaves

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Equities (stocks)

Common shares, sectors, market cap; how equities trend

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Futures & commodities

Contract specs, roll, why Turtle traders used futures

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Forex

Currency pairs, 24-hour market structure, carry

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ETFs & index products

Diversification, leveraged ETFs, sector rotation

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Crypto & digital assets

High-volatility trending markets; unique risks

Instructor note: Anchor each asset class to its trend-following characteristics — not just what it is. Ask students: "Would a 20-day breakout strategy work on bonds the same way it works on commodities? Why or why not?"

03

Screening & Opportunity Identification Core

5 topics · How to find trades before they happen

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Technical indicators for screening

Moving averages, ATR, RSI — as filters, not signals

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Relative strength ranking

Identifying leaders vs. laggards within a universe

🏗️

Chart pattern recognition

Bases, consolidations, VCP (Volatility Contraction Pattern)

📰

Fundamental catalysts

Earnings, revenue growth — the SEPA approach to fundamentals

🛠️

Building a watchlist

Daily scanning routine, tools (Finviz, TradingView, TC2000)

Instructor note: Reinforce that screening is about narrowing the universe to high-probability setups — not predicting the future. Have students build and maintain a live watchlist throughout the course.

04

Entry, Exit, Profit-Taking & Stop-Loss Core

6 topics · The mechanics of getting in and out correctly

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Entry triggers

Breakouts, pullbacks, pivot points; confirming volume

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Initial stop-loss placement

ATR-based stops, chart-based stops, fixed-percentage stops

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Position sizing at entry

Calculating shares based on stop distance and risk per trade

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Trailing stops

Locking in gains as price advances; N-based (Turtle) trailing

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Partial profit-taking

Scaling out at targets vs. letting runners run the full trend

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Full exits

Closing rules: channel breakdowns, system signals, earnings risk

Instructor note: The most common student mistake is inconsistency between planned and executed stops. Role-play the decision under simulated drawdown to make it visceral before it's real.

05

Risk Management & Portfolio Construction Core

6 topics · Surviving long enough to let the edge play out

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⚖️

Risk per trade (R)

Defining R, sizing every trade to a fixed fraction of capital

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Drawdown & recovery math

Why a 50% loss requires a 100% gain to recover; expectancy

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Correlation & diversification

Avoiding concentrated bets; sector & asset class correlation

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Portfolio heat

Total risk across all open positions; max concurrent exposure

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Adding to winners (pyramiding)

Unit-based scaling; Turtle System 2 unit methodology

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Max loss rules & circuit breakers

Daily, weekly, monthly loss limits; when to stop trading

Instructor note: Make students do the drawdown math by hand. The moment they calculate that a 40% drawdown requires a 67% recovery gain is often the moment risk management clicks emotionally — not just intellectually.

06

Trend-Following Strategy Systems Core

3 systems · Complete rule sets for the Turtle, SEPA, and Donchian approaches

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Turtle System 2

55-day breakout entry, 20-day exit, N-based stops & sizing, unit pyramiding, correlation limits

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SEPA (Minervini)

Trend template, Stage 2 analysis, VCP pattern, fundamental + technical confluence, tight stop discipline

📏

Donchian Channel System

N-day high/low channels for entry & exit, ATR sizing, how it relates to Turtle System 1

Instructor note: Present all three systems side by side after students have internalized Modules 1–5. They'll see that the systems differ mainly in their universe and holding period — not in their underlying logic. Assign a paper-trade project where each student picks one system and follows it for 4 weeks.

07

Advanced Topics Most Curricula Skip Recommended additions

4 topics · The details that separate students who succeed from students who quit

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Backtesting & system validation

Running historical tests, avoiding overfitting, walk-forward testing, not deceiving yourself with cherry-picked parameters

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Trading psychology — Part II

Managing real-money loss, overconfidence after wins, following the system when it's losing, journaling practice

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Transaction costs, taxes & account rules

PDT rule, short-term vs. long-term capital gains, commissions & slippage, margin requirements — all of which eat trend-following returns

🌐

Macro environment & strategy fitness

Identifying when your system is likely to underperform; adapting position sizing (not rules) to regime; distinguishing bad luck from bad process

Instructor note: The PDT rule alone will shock most beginners — surface it early rather than at the end. For backtesting, the real lesson isn't mechanics: it's building the habit of asking "Am I fooling myself?" before committing real capital to a system.