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“Love your [trend following] work as always…”

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Gday Mike, Love your work as always. I trade for a living and listen to one of your episodes each day… helps to remind me I’m not alone. I still enjoy many of the early episodes, thanks for keeping them on your website. Your ability to interview such a broad range of educated and interesting guests is your strength. Many other trading podcasts are very fixed in their thinking and do not stray from trading. I have recently spoken with Mark Sleeman. I would love to hear him on your show again. Also, I am interested to hear more from traders based in Asia and surrounds. I also trade in many Asian countries as part of my overall diversification. We never hear anything of Indonesia, or Philippines, or even Korea in the western trading media. Also, how about an episode from the Ho Chi Minh stock exchange. A history and a facts etc. Must be some price action guys over there too! Keep up the good work. Love your books and podcasts.

Kind regards,
[Name]

Thanks for the advice and feedback!

Trend Following with Michael Covel

Trend Following with Michael Covel

Posted in Trend Following

Trading Food For Thought: September 28th Edition

Posted in Trend Following

Trend Following Systems: Charts or Not?

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Hello Mr. Covel, I am a follower of yours for several years now since back in the day I read your book Trend Following. In one of your previous podcasts you said something in those lines: that a true trend following system does not require charts or looking at charts. Every aspect of the system can be systematized. This struck me. I totally believe it right. Unfortunately, most systems these days requires looking at charts and charts patterns. So I wonder if you know some trend following systems that do not require charts? And which are they? I know that the [name] system can qualify as one. But are there others?

Thanks.
[Name]

PS. Forgive my poor English, I am French.

My Flagship product does not require charts. If a trend following system “requires” charts its not trend following in my opinion.

Posted in Trend Following

Correlation Considerations in the Trend Following World

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Hi Michael, Again, appreciate everything. You are a great teacher and mentor. I do not miss a podcast.

My only beef is a compliment. More rants needed. Your last I found very insightful. Uncorrelated returns is of particular interest because our fund has demonstrated miniscule correlation to both indexes and peers. We have run a relatively net short healthcare fund since inception 9 years ago, and have managed to survive and perform. The most difficult task has been differentiating ourselves to potential investors while the entire sector rages higher. Fortunately, the right investors have taken notice and our assets have gone from 50M to 230M in 18 months. What I found particularly compelling and coincidental about your rant is that we were recently sought out by a huge institution looking to build a book of 10 managers with track records of double digit annual returns with little correlation. That institution is [name] Capital (did not hear from me). The manager discussed the strategy to us, although not as concise and eloquent as you did in 20 minutes. Would love to see that piece if you have it handy, thanks.

Also, need to make it out to Ho Chi Minh City. You sell the single life out there well.

Thanks for the feedback.

BTW, looks like my single life ended!

Posted in Trend Following

Ep. 488: Never Forget the Lessons with Michael Covel

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Michael reads some of his favorite quotes circa 1920’s/1930’s from a famed trader. These quotes are timeless bits of wisdom. Michael adds commentary throughout.

In this episode of Trend Following Radio:

  • How is the “price” made?
  • You will never know all the fundamentals
  • Speculation
  • Getting mad at the market gets you nowhere
  • Bull and bear markets
  • Entry and exit signals
  • 1920’s wisdom on numbers
  • Always be ready to catch that unexpected move
  • Follow the price action

“When the markets decide to deliver a cleansing flood, it comes without warning.” – Michael Covel

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Posted in Trend Following

Trend Following Requires Discipline: Stick with It!

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Hi Mike, I wanted to thank you again for getting me in touch with [name] so I could access the information I was looking for a few months ago. Secondly, I think you do a FANTASTIC job in getting the trend following story out there. I’ve read all of your books and agree that “price is everything.” I am listening to The Complete TurtleTrader now on audible.com. I do subscribe to [name] and use their [name] to find a list of potential stocks but then use ONLY ALL TIME NEW HIGHS as my trigger to get in. I put 5-7% into a starting position, take losses quickly and profits slowly. I began trading stocks at 19 with $9,000 that I had saved up from working a few summers for my grandfather, an antique broker. From 1989 through the crash of 2000, I ran the $9k to $297k without ever adding another dime, by buying new highs and cutting losses while pyramiding into winners. Unfortunately, after doing so well, I began to think I was smarter than the market. Big mistake! I lost $70,000 in the year 2000, and another $12,000 in 2001. Then I got divorced and had to give half of what was left to my ex. I went back to school, and used most of what was left to pay off debt. I recently graduated school, and with the $79,000 that I have left, I am now beginning to trade again. I’m sure I could get better, so I continue to subscribe to your Podcasts, and read new entries on your site regularly. I guess I have been a trend follower since 1989, also until four or five years ago didn’t know that I was, because I never knew what it was called. I just knew what was working for me. Please continue to do what you do, as you are helping us all continue to learn and get better at trading. I have yet to trade anything other than stocks, and options, but as I continue to learn and I would love to apply the strategies to ETFs and maybe even branch into futures or currencies. Thanks again! Whether you know it or not, you are helping thousands of people with your books, website, podcasts, and your accessibility.

[Name]

Thanks!

Stick with It

Stick with It

Posted in Trend Following

Ep. 487: Robert Cialdini Interview with Michael Covel

Robert Cialdini's 'Pre-Suasion'

Robert Cialdini’s ‘Pre-Suasion’

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Robert Cialdini is on today’s podcast. He is best known for writing “Influence: The Psychology of Persuasion” published back in 1984. Robert is the “go to man” for understanding effective persuasion. Reciprocity, commitment and consistency, social proof, authority, liking and scarcity are his six key principles of influence that he teaches. His new book, “Pre-Suasion: A Revolutionary Way to Influence and Persuade”, introduces a seventh key principle of influence.

Michael asks “How did you start down this path? What was your ‘A-ha’ moment that got you researching for this new book?” Robert says it was a series of recognitions as he was reading the newest work in behavioral studies that made him realize that creating mindsets in people didn’t involve just six principles. He went back to his notes and looked at what the top people in various professions were doing. He realized that they were acting like gardeners. They were preparing the earth before planting the seed. These professionals were priming a persons mind to perceive their idea more fully.

Next, Michael and Robert talk about anchoring a persons perception of what they are paying or asking for. You start off with a higher number or a grander request before hitting the other person with what you really want. “Are there types of thinkers where pre-suasion is not as effective? Or have you found universally across the populations that pre-suasion is just very effective?” Robert says it seems to be a universal operating procedure that is built into us from birth. He uses a study done with 18 month old babies that proves that this is built into our psyche.

Lastly, Michael asks Robert to elaborate on the idea of unity. Robert shares a story of Warren Buffett and unity taken from his book. Michael finishes up the last 20 minutes of the podcast with a presentation on behavior change and the part that social norms play in creating that change, given by Robert. He focuses on how to make people move more towards a environmentally socially responsible role.

In this episode of Trend Following Radio:

  • Establishing trust before asking for anything
  • Rational self interest
  • Anchoring a persons perception
  • Asking for advice rather than an opinion
  • Warren Buffett’s shareholder letter
  • Environmental responsibility

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