Trend Following, by design, leaves money on the table. It does not try to milk every trade for every penny.
It aims for profit, but not greed.
It accepts missing tops and bottoms in order to capture the middle of trends.
We humans love predicting, buying bottoms and selling tops. The cost of these behaviors outweigh the profits, though.
Many people choose not to buy stocks during this 7–8 year bull market because the perfect buying opportunity never occurs. The market never pulls back enough to justify getting in; no one wants to be the sucker who buys the top.
Being a human, myself, I understand this pain. However, waiting for a pullback to get in at “better prices” often times keeps you out of the market altogether and, as a result, you miss the trend. The pain of missing the long-term trend outweighs the pain of overpaying in the short-term.
Blog post: http://www.michaelmelissinos.com/blog/leaving-money-on-the-table/
5: Leaving Money on the Table