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“Why Do You Like My Podcast?”

A recent email exchange:

Listener: Michael, Just found your podcast and I’m really enjoying it.

Covel: Thanks! Why do you like it? Starting steps for more? Go here.

Listener: Why do I like your podcast? If you are actually interested, here is a long answer to a short question:

I have two bachelor degrees (including electrical engineering) and have worked in many fields – air traffic controller, test engineer, applications engineer, marketing, sales, etc. At about age 40 I went back to school and got a masters in operations research and finally found my calling in the analytics field.

Currently I work as a one man analytics department for a medium size credit union doing whatever analytical modeling and reporting work is required – retail credit risk recently.

My experience is that most useful models help an executive make incrementally better decisions at the margins – not huge homeruns every time… but that is enough to be really valuable. In my work with analytics I find that even sophisticated people want to put too much faith in a math model and they expect it to always be 100% correct in answering any possible question. They pour all their spoken and unspoken expectations and hopes into a model and expect that it will be like some computer from Star Trek that thinks for itself and can solve any problem posed.

So, I’ve been in the messy proverbial trenches of day-to-day business analytics which shades my opinion of too good to be true investing approaches. I don’t do any work with investing on a professional basis but I enjoy reading about the topic with the hope of improving my results by a percent point or two over the long haul. I’m not really an adherent to the efficient market theory because simple observation of stock market behavior doesn’t really match the theory.

But, I’ve always been a mostly buy and hold type investor for my personal retirement money because I haven’t seen anything that made sense as a way to particularly outperform except perhaps factor tilt towards value or small cap. Most evidence seems to show that active investment on the whole underperforms.

However recently I’ve become interested in the momentum/trend following approach after reading Wesley Grey’s book DIY Financial Advisor. In fact listening to your interview of Wes is how I got turned on to your podcast. The whole momentum approach is attractive because it seems pragmatic, evidence based and systematic and might provide that incremental edge I’ve been pursuing. In particular I like the potential for reducing tail risk and the big draw downs.

I’ve only listened to a few episodes but I enjoy the podcast because it is educational and because it is interesting to hear different takes on trend following from both you and your practitioner guests.

Sorry for the long email and thanks for the links. I will certainly be tuning in on a regular basis.

You are welcome!

Posted in Trend Following


Feedback in:

By the way, I [forgot to take] the opportunity to really thank you for your multiple initiatives (trend-following website, books and podcasts…) The quality of the interviews and content is really amazing, and your drive to dig deep and to share your understanding with your audience is really great and addictive. As a young retail trader (successfully doing it since 2 years) and entrepreneur I have the impression as if I gained years of experience by “just” reading and listening to what you produced. As you and your guest said during one of your latest podcasts, surrounding yourself with virtual mentors (Steve Jobs, Disney…) and doing your homework is an extremely important step too in the bumpy road of an entrepreneur.

Discovering you and your guests is an important milestone and great moment for me!



Thanks for the passionate feedback!

Michael Covel

Michael Covel

Posted in Trend Following

Follow the Trend…But!

Great rant:

Follow the Trend ……… But!!!

We can never stand in the way of market moves – nobody is big enough aside from those with the deepest of all pockets and even then their luck may just run out?

However the sheer stupidity of market reactions continues to the point that I believe most market participants simply are not accepting we are living in a different World following Trumps win and Brexit.

Take today’s move lower in the Pound [ To be fair a small move lower in the Far East on headlines that May will be outlining her case for a hard Brexit shortly] – The weekend news is quite possibly the most bullish news I’ve seen for Sterling in my 30 year career trading fx markets. Here’s – for dummies – what has really been said over the weekend.

Trump – I will immediately put a sizeable trade deal in place with the UK – front of the que as I am a huge believer in Brexit and as the World’s largest market the U.S will offer Britain free access on favourable terms which will boost jobs, investment and prosperity in the UK massively. As far as Europe is concerned they can go screw themselves – I am not on the same page as Merkel on anything – Europe is heading for a disaster and I am already thinking about tariffs on German products in the U.S. – BMW for example.

Meanwhile the UK government announces that it may slash UK taxes to play hardball with Europe – meaning vast increases in UK competitiveness versus Europe which means anyone else clinging on to the pipe dream that business will leave the UK and relocate to Europe – a socialist / anti-entrepreneurial cesspit of high taxes and bureaucracy then for God’s sake wake up and smell the coffee. That leaves the UK as in its strongest position for decades with the prospect of not only globally driven growth and exports surges but as a safe haven for when Europe falls to pieces and likely to see massive currency inflows into the UK.

It doesn’t get any better than this for the UK which is why my targets for Sterling over the next 3 years are very simply 0.2 for Euro / Stg and 2 for cable – easy peasey – and that’s extremely conservative.

Am I long? No I’m short Sterling right here because the price action is giving no reason to back these views at all – but when it does we will flip that is for sure. Never trade my view or opinion as many of you know but if I’m right then the price action should confirm and the Pound against the Dollar needs to break at least 1.35 to show signs of life.

Meanwhile – for me – quite possibly the second best trade out there is selling the DAX. Global imports on German goods, Germany picking up the bill for a disintegrating Europe and the demolition of German values in future years only point to one direction for the German stock market. I look for a long slow move to 6000 in the Dax with the first signals this move is underway coming when it breaks 10,500 without making a new high in this particular cycle.

And as for the market clinging on t0 2010-2015 “type” solutions with bad news is good news for stocks – just remember when the shit hits the fan – what QE? Trump is a free marketer and if markets need to head a long way lower – then that’s where they should be!

The trend is your friend – but he’s a very insincere one!

Christopher Clarke
Managing Partner and CIO
Lawrence Clarke Investment Management LLP

Price action = severely underestimated by most. Listen to Chris on my show.

Posted in Trend Following

Ep. 520: Take the Lid Off with Michael Covel on Trend Following Radio

Trend Following with Michael Covel

Trend Following with Michael Covel

Subscribe to Trend Following Radio on iTunes

Michael starts the podcast quoting from a recent blog post of Seth Godin’s called “The Candy Diet.” Most people want a Guru or someone to spoon feed them something, anything. They want to be told what will happen in the future. They are on the “candy diet” that Seth Godin speaks to. People want to be baited with quick and easy. Michael reads from the obituary of the late Jay Forrester next. Forrester made the point in one of his classes that not a single one of his engineering students had ever taken the back lid off of a toilet to see how it worked. Looping back to Godin’s candy diet piece: There isn’t enough curiosity out there.

Michael quotes Jameis Winston, quarterback for the Buccaneers next. Jameis was asked if the Buccaneers were playoff contenders. Jameis’ response was that he was just trying to be 1-0 each week. He was living in the “moment of now.” He wasn’t worrying about week five while he was playing a game in week one. This thought process goes for everything in life, especially trading. You need a systematic approach that keeps you in the moment of right now. Otherwise you become bait.

Jared Kushner ran the Trump campaign. He tried to run the Trump campaign on the cheap. He would see what worked, and if it didn’t work then they would cut their losses quickly. If it worked, they would keep that strategy going and scale it up.

Michael finishes up the podcast talking about the new version of his Trend Following book. He points out some edits the publisher wanted him to make to move toward a more politically correct book. Michael brings in a term coined by Nassim Taleb, “intellectual yet idiot,” to explain his stance on making his book more politically correct.

In this episode of Trend Following Radio:

  • Political correctness
  • Curiosity
  • Living in the moment of now

Mentions & Resources:

Want a FREE Trend Following DVD? Get it here.

Posted in Trend Following

Trading Food for Thought: January 15th Edition

Posted in Trend Following

Ep. 519: Another Mega Trend Following Episode with Michael Covel on Trend Following Episode

Subscribe to Trend Following Radio on iTunes

Michael releases another mega episode with three trend following traders: Chris Cruden, Salem Abraham and Brian Proctor.

Chris Cruden has been in the trend following space for over 25 years. In 1988 he became a Director of Adam, Harding and Lueck Asset Management Ltd (AHL) in London, a famed trend following shop. He is currently the head of Insch Capital Management.

Salem Abraham is the President of Abraham Trading Company with a 27-year track record (with much trend following success). Over the years, Abraham has been kind enough to offer Covel fantastic insights. Abraham also appeared in Covel’s film, Broke, and is the last chapter of The Complete TurtleTrader.

Brian Proctor is an original TurtleTrader trained by Richard Dennis and Bill Eckhardt and today is a Managing Director at EMC Capital. He began his futures career in 1982, with experience at both the Chicago Mercantile Exchange and Chicago Board of Trade. Proctor was a participant in the renowned Turtle Program, and managed all trading operations at C&D Commodities through 2000.

In this episode of Trend Following Radio:

  • Price action
  • Trading only currency
  • Benchmark and time period selection
  • Don’t force the system
  • If you can’t measure it, you can’t manage it
  • Markets teach humility
  • Swiss Franc and Crude Oil
  • Asian economics
  • Location independence
  • The Turtle program
  • Diversification
  • Black Swans

Mentions & Resources:

Want a FREE Trend Following DVD? Get it here.

Posted in Trend Following

Dr. Van Tharp: “His work has already given me a few ah-ha moments…”

Feedback in:

Love your podcasts! I listen to them every day on my way to my day job. They have provided me with an endless source of reading material and research projects. Currently reading everything I can find on Dr. Van Tharp. His work has already given me a few ah-ha moments. Wonderful stuff. Keep up the good work.


Posted in Trend Following
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