Importance of Price Trends to Profitability Sample Clauses

Importance of Price Trends to Profitability. Eclipse Capital applies a trend-following trading technique, which seeks to identify significant price trends soon after they begin and participate in such trends until soon after they have begun to reverse. The profitability of any trend-following strategy depends upon the occurrence of major price moves in some futures contracts traded; generally, the majority of trend-following trades result in small losses, but attempt to achieve gains on relatively fewer trades to offset such losses. There is no guarantee that there will actually be such trends in the future. The best trend-following strategy, whatever elements it may contain, is unlikely to be profitable if there are no trends of the kind it seeks to identify. Furthermore, a strategy which is successful in the case of upward price trends may not be successful in downward trends and vice versa. Any factor which may lessen the prospect of major trends in the future (such as increased government control of, or participation in, the markets) may reduce the prospect that any trend-following strategy will be profitable.
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