QUOTE(howszat @ Jan 9 2011, 11:30 PM)
In fact, trend following is actually forecasting.
What you are simply doing is spotting some sort of trend in the historical past, and forecasting (hoping) that the trend will continue the same way into the future.
trend following means, at least to me and some people, when the market is confirmed in an uptrend (current) you get in and when the market turns down, you get out. If and when I have a confirmed long term down trend I wont hesitate to get out. I follow the long term trend so I only make my move once every few months or years, depending on the trend itself. But If i focus too much on the past instead, when the trend change direction, i will not move.
At the other extreme, pure forecasting, market is down yet one insists it will go up, the trend is not even proven, or the trader is just guessing. Full of hope, driven purely by market herds mentality, no system in place, frequently gets in too late or out too early, overtrading. Even when the long term trend is down, he/she insists it will come back up soon, holding on to losses as it gets bigger.