Guide · Breakouts & channels
Does Clenow Trend work?
Across 375 stocks, Clenow Trend cut the worst fall on 94%, beat buying and holding on risk-adjusted return on 17% and on raw return on 13%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
The model behind Following the Trend: buy a 50-day high when the 50-day EMA is above the 100-day, then ride it with a stop three ATRs below the best close.
- In on a new 50-day closing high while the 50-day EMA is above the 100-day EMA.
- Out when the close falls three average true ranges (20-day) below the highest close since entry.
Breakouts & channels plays bet that when price escapes the range it has held for weeks, the move that follows tends to run. The family guide
How to use it
- Expect to be wrong more often than right: only 30% of its calls worked. Its results come from the size of the winners, so following it means sitting through strings of small losses.
- It sits in cash much of the time (holding on about 35% of days), so judge it on risk-adjusted return rather than on matching a rising market.
- It worked best on Real estate (37% beat holding on risk-adjusted return) and worst on Micro caps (0%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
Clenow Trend did best against holding in the 2008 crash (+39% median gap) and worst in the 2020–21 rally (−35%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| Clenow Trend | +39% | −12% | +23% | −35% | +15% | −14% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Real estate | 37% | -0.10 |
| Financials | 31% | -0.08 |
| Industrials & rentals | 22% | -0.17 |
| Media & telecom | 20% | -0.11 |
| Industrials & materials | 20% | -0.27 |
| Software & devices | 18% | -0.29 |
| Consumer & retail | 18% | -0.33 |
| Energy & power | 17% | -0.20 |
| Big tech | 17% | -0.13 |
| Healthcare | 11% | -0.28 |
| Semiconductors | 9% | -0.44 |
| Metals & mining | 6% | -0.28 |
| Sectors | 0% | -0.31 |
| Indexes & ETFs | 0% | -0.20 |
| Micro caps | 0% | -0.31 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
Clenow Trend holds 69 of 377 names as of the Oct 13, 2026 close.
Changed its call in the last two weeks:
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.