Trend Following Frequently Asked Questions
The question is asked: "Why teach?" A Chinese proverb provides an answer:
"When someone shares something of value with you and you benefit from it, you have a moral obligation to share it with others."
You need an edge. This edge should consist of proven entry and exit techniques, proven position sizing, money management and proper trading psychology. That breaks down into many details.
Our trend following training:
- Allows all trading levels from pro to novice to excel.
- Provides a template for beginning traders who need a complete trading method from the ground up.
- Works well for those who don't know where to start.
- Can help establish a money management businesses--if desired.
- Trade markets using a non-emotional system.
- Has credible endorsements.
- Gives relief to those burned by buy-and-hope strategies.
- Decreases the learning curve (read: years).
- Trades all markets with the same rules.
- Can make money in both up and down markets.
- Allows more peace of mind from the markets.
- Embraces uncertainty and makes it work for you.
- Trades for out-sized absolute returns on all markets based on reality--not hope.
- Gives an alternative money making method in today's chaotic world.
- Let's you know daily when and how much to buy and or sell.
- Properly exits profitable positions.
- Leverages technology to make your life easier.
- Trades Gold, but the right way--not the infomercial way.
- Gives step-by-step instructions to execute a trading plan.
- Provides exit points before ever entering.
- Gets more out of your 401K, IRA, and other retirement investments.
Our training is not for:
- Those who have no money.
- Those expecting to make millions instantly.
- Those who only want day trading. This is not day trading.
- Those who play the lottery in hopes for it to provide their monthly income.
- Sheep.
Can you know absolutely when a market will trend? No. Do you have to know absolutely in order to have a profitable business? No. A great number of businesses, like trend following, are based on understanding simple probability laws. If you look at insurance, gambling, and other related businesses, it's obvious that even a small positive edge can generate huge profits. How do you ensure that you are not doomed to failure before you begin? If you have a deep desire to make money and the ability to follow a proven, step-by-step system, then you have the chance for the big money.
What is trend following exactly?
Read.
What are the returns that can be generated as a trend following trader?
You can make above average returns across all markets during bull and bear markets. Review performance numbers produced by trend following over the last 3 decades.
Testimonials?
Read.
Guarantee?
Read.
What are the origins of trend following?
Read.
Is trend trading only for U.S. traders?
No. We have clients in 70+ countries trading on exchanges from Europe to Asia to the Middle East to South America to North America.
Is your training for the individual investor? For the brand new beginner trader?
Yes. The majority of our clients are individual traders and investors. Many are new with no experience. Some have experience, but the wrong kind of experience. Some only know buy and hold. Some only know value investing (i.e., Buffett) or fundamentals. Whether you are age 21 and in college, age 30 working a job, or age 60 in retirement, we can teach you the techniques of the great traders.
Is your training for market professionals?
Yes. Our training is used by experienced traders worldwide. We have trained hedge fund managers to CTAs to CFAs (Chartered Financial Analysts) to CMTs (Chartered Market Technicians) to brokers to financial advisers on every continent.
How was your training assembled?
The great traders, along with their trading rules, are not easily accessed. However, Michael Covel has dedicated his life to assembling their trading systems and lessons. Covel has spent the last 15 years on the 'inside' learning from the greatest traders of our time. View Covel's trading mentors.
Are your trading systems just "Turtle Trading"?
No. Michael Covel's The Complete TurtleTrader explains the Turtle story and system in detail. It is the definitive Turtle resource, but our courses go much farther. Human interaction with Covel and his staff, the live teaching element, is entirely different than a book.
The top end of your trading systems course is nearly $3000. Is it worth it to use so much of my capital on this course?
Paying for trading education is far less expensive than losing a fortune with no trading plan. How much will our trading education cost? Our cost is negligible if you consider it an investment in your future wealth. All of our research effort took time, energy, and money, and we are capitalists, but at the end of the day our instruction gives you the chance to make big money.
What are the differences among your (6) systems trading courses?
You can see a features comparison here.
I'm a business student and I have always disliked the way professors downplay anything but fundamentals. I'm considering ordering your course to continue my education in trading and I just had one question. I'm curious as to whether the systems in your course can be applied to shorter time frames like hourly or 4-hour charts?
No. Day trading is fool's gold. Our training will be worth millions to you over the course of a lifetime if you simply understand that day trading is a waste of time. Want more on the subject? Read.
How do I know you can help me to become a profitable trend trader?
Read.
I am concerned about having the right exit strategy.
Traders without an exit plan always lose. Applying explicit exit protocols to limit damage during market declines is the name of the game. That means having an exit strategy for all of your positions at all times. That means deliberately, consistently and mechanically 'cutting losses short' while letting your winners 'run.' We teach our clients how.
Have your teachings and materials evolved over time?
The core principals of trend following are timeless, but year after year we add to our instructional materials, add new proprietary trading systems and always improve our support to help clients learn more efficiently. Nothing we teach is ever dated.
What starting capital is needed?
Read.
What is the difference between your books and courses?
The books are great resources filled with thousands of details, and they have helped many people learn, but our trading courses with support are different. Questions come up. Clients need help. Our personal instruction gives insights that a book can't give. Additionally, there are many proprietary trading systems in the courses not included in the books.
Will too many trend followers make it less profitable?
No. A great example is 2008. Trend followers made a fortune. The profitability of trend following shows absolutely no sign of slowing down. Also, review chapter 11 of Covel's book Trend Following.
Can I trend follow in my retirement account?
Yes. 401ks, IRAs, Keoghs, Seps, etc. You can trade stocks, futures and ETFs in retirement accounts.
What markets can be traded as a trend follower?
All markets can be traded with trend following methods: stocks, bonds, options, currencies, commodities, ETFs and LEAPS®.
Are you sure trend trading works on stocks?
Yes. Read more.
This is not only for futures trading?
No. Trend following is not instrument specific. Trend followers can and do trade all types of instruments. Some trade futures. Some trade FX (or Forex). Some trade ETFs. Some trade LEAPS® options. Some trade stocks. Some trade commodities. For example, today trend following traders can trade ETFs and get exposure to commodities markets without having to trade futures. We help navigate you through what is the best option for your situation.
Is trend following risky?
Life is risky. You might get hit by a car crossing the street. All trading is risky. However, if you have a concrete plan, risk is manageable. That is the key to the success of great trend following traders. As we have seen in the last decade buy and holders, mutual funds, fundamentals, etc. don't control risk at all.
I am currently a financial adviser and will be going back to school for a 4-year degree in the summer. As far as school is concerned what type of courses would be most advantageous for my to take or learn that would help in trend following?
Most finance departments don't know about trend following. If they do, they call it 'luck'. In fact, many of the greatest traders had little to no experience trend trading before starting. Trend following legend John W. Henry, for example, did not have a college degree. However, the great trend traders have been motivated to learn and work hard.
How much math is involved in trend following for success?
+, -, *, / -- the basics. A degree in math, statistics, or economics is not needed to trade trend following techniques. Staff, premises, and expensive overhead are not required.
Is trend following trading black box system trading?
No. This is not 'black box' trading. All rules and philosophies are fully disclosed.
Will I be able to make money in bull and bear markets?
Yes. The strategies we teach enable profit from both rising and falling markets.
Do the great trend followers watch the markets during the day?
No. Some trend followers only trade once a week. Forget the ridiculous nonsense of day trading and 5 minute bars. Many trend followers trade weekly bars.
How much time is required to trade as a trend following trader?
You can spend a minute or two per market checking up each day. For example, let's say you check prices in the evening, then with one trade on your PC in the morning, you place or change any orders in accordance with rules. Use your iPhone or Blackberry to do it. Our trend following trading systems use daily data to determine buy and sell signals. This is not day trading or high frequency trading. Orders can be placed before the market opens and do not need hourly monitoring. Most top traders manage their trades in 10 to 30 minutes per day. Trend follower Richard Donchian once said: "If you trade on a definite trend-following loss limiting-method, you can trade without taking a great deal of time from your regular business day. Since action is taken only when certain evidence is registered, you can spend a minute or two per [market] in the evening checking up on whether action-taking evidence is apparent, and then in one telephone call in the morning place or change any orders in accord with what is indicated. [Furthermore] a definite method, which at all times includes precise criteria for closing out one's losing trades promptly, avoids...emotionally unnerving indecision." Each day you determine entries and or exits for the following day. You can then buy or sell "at the market" on the open the next day.
Why is money management needed?
Money management, also called risk management or position sizing, is a critical component of trend following trading success: read more.
Are markets different now?
No. Markets are the same since they always change. Trend following trading adapts to change.
Isn't 24-hour news needed?
No. You can use the internet to get closing price quotes. You don't need real-time news. In fact, you don't need news at all.
Is leverage used in trend following?
Yes. All great trend following traders use leverage. It is a tool to be used correctly. We teach how. Keep in mind, this is not the use of leverage that sunk so many Wall Street banks. This is different.
Once I complete your training will I need my personal broker or financial advisor to help me trade successfully?
No.
What do you think of Gann and Elliott Wave?
Waste.
Once training is completed what additional expenses will be needed to start?
You need money to trade and daily price data (about $20/month). We have a special discount set up with a leading provider. All of our clients receive 10% off CSI Data's advertised prices.
I've lost a ton of money in my 401K. Can trend following trading help? Isn't this expensive instruction?
Yes we can help, and we hope our descriptions make that clear, but how is our instruction expensive if you just said you lost a ton? We charge for education, for our time, instruction and expertise, but it is an investment if you think about it correctly. You can always keep buying and holding or trust that Social Security will be there. More on our value proposition.
I'm in the beginning stages of starting a fund and I have a lot of questions, but I really haven't been able to talk to anyone about it, mostly because I haven't met anyone in the business. I was wondering if I put a few questions together if you could forward it to someone you think could be helpful in answering them?
A critical feature of our course is support. These are the types of questions we handle. We can help on introductions, along with hints on how to break into the business or just advice on trading your own account.
I currently work in a Fortune 500 company as a Finance Director. I was reading your book on The Turtles and got more interested and read your web site. I'm interested in your training courses, but I have to be honest, it seems strange that someone is willing to train or give away a process that works. This is one of my questions.
Think about the Turtles. Think about all of the trend followers with decades of trend following trading results. Most people don't want to change. Most people are happy losing with buy and hold. Sad, but true. This issue is also addressed in the last chapter of the book Trend Following. Also, we don't give away our training. We are capitalists who work hard at the training business.
Does your trading systems course explain exactly which markets to trade and why?
Yes. A key to the consistency of trend following is diversification across markets. Trend following exposure to all markets allows profits from trending markets to cover losses from other markets. Big moves, and the profits from those, offset losses. Additionally, using the exact same rules and parameter values across markets is a key factor in keeping trend following trading systems robust.
Are chart techniques and studies used to pick entry & exit levels and where to place stop levels? Do you teach a one-size-fits-all method of level picking and using indicators or do you tailor it to the individual?
We teach how to tailor trend following to each client. We teach you how to make all trading decisions regardless of your situation.
I keep reading about fancy software, red light/green light, and all kinds of complicated trading strategies that seemingly only rocket scientists can trade. Is that what this is?
No. The real risk in today's age is over-doing a trading system. There is so much computing power available and so much data available, but the reality is that great trend following can be explained on the back of a napkin. We help our clients to navigate these issues.
Are there discounts?
Yes.
Do you have critics?
Yes.
