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Trend Following Investment System
A trend following system is a set of rules that dictates how to make consistent investment decisions for a long-term edge. Our clients receive proprietary trend trading strategies, the “nuts and bolts” exact trading processes, assembled and curated from most successful trend traders over the last 40 years. We have taught beginners to professionals how to trade trend following methods on stocks, bonds, currencies, commodities, metals, grains, futures, ETFs and LEAPs. An overview of key points:
- Trend following = Fuel (time and money) + Driver (you).
- Trend following’s DNA overcomes behavioral biases outlined in Daniel Kahneman’s research. Exploiting that behavior through financial markets is our aim.
- This works on all markets. You don’t care about fundamentals. Why should you? You just want to profit. You are running a process machine that doesn’t specialize in one market alone. You can trade anything now, and should.
- There is no foolproof system. Great trading is about skill and luck.
- Trend following applies the scientific method to investing. It goes against the economic orthodoxy of efficient markets.
Make no mistake, this is mental sport, and it is sport that can be learned. Forget gambling, great trend following trading is about putting mathematical odds on your side. It is about finding a consistent edge with no guesses, hunches or predictions. You will learn exactly to think and trade with precise systems for above average returns.
Sometimes you may see jargon across our world (all easily learned), but don’t let that concern you. You do not need to be a rocket scientist to be a trend following trader. Charles Ellis makes the point:
“Please keep in mind the observation of two of my best friends, who are at the peak of their distinguished careers in medicine and medical research. They agree that the two most important discoveries in medical history are penicillin and washing hands (which stopped the spread of infection from one mother to another by the midwives who delivered most babies before 1900). What’s more, my friends counsel, there’s no better advice on how to live longer than to quit smoking and buckle up when driving. The lesson: advice doesn’t have to be complicated to be good.”
Q: Please define trend following exactly.
A: Read. Also, consider an illustration that can make you rich:
Trend following does not pick bottoms or tops. You always get into a trend late, and get out late. You cannot predict a trend. That chart might not seem like a great strategy at first glance, but it is the foundation of one of the most profitable insights in the history of market speculation: capture the middle meat and you can make a fortune.
Q: The origins of trend following?
Q: Why are there two versions of your product?
A: Flagship Premium gets you there faster.
Q: Who is trend following for?
A: Everyone (almost):
- All new or private traders trading their own account.
- All account sizes.
- Hedge fund managers, commodity trading advisors, floor traders and locals.
- Professional traders looking to establish money management businesses.
- Those that trade 401K, IRA, or other retirement vehicles.
- Those that want to trade all markets with the same rules.
- Those that want to make money in both bull, bear and black swan markets.
This is for brand new to pro traders. It is for traders that trade global markets and for those that trade only their home country markets. It is for retirement, speculative accounts, Registered Investment Advisors, fund managers and college students. This is a true location independent, trade on a desert island trading profit-making opportunity.
Q: Who is trend following training not for?
A: The list:
- Those expecting millions instantly.
- Day traders.
- People that think they can predict tomorrow.
Q: What are performance examples?
A: For more than five decades trend following traders have produced massive profits.
Q: When does trend following work?
A: When markets trend–is the short answer. The investment objective of our trading programs is to extract profits from up, down and black swan markets (rare or surprise events), resulting in an above average return stream. All programs can be applied to long only and long/short portfolios and all rules are best applied in a 100% systematic manner. Think of it like a machine:
Q: What type of markets can be traded?
A: Systems provided are for stocks, bonds, commodities, currencies (FX), energies, agriculturals, metals and softs. Can you trade equities only, for example? Yes.
Q: What market instruments can be traded?
A: Systems provided are for equity ETFs (equities), LEAPs options and or futures.
A: Review teaching track record here. However, there are critics. If our work made the Fed, CNBC, Wall Street and EMH academia happy–there would be no value. Those institutions after all are the system.
Q: How specific is your product?
A: This service is an overall trend following trader education with exact trend following systems that can be applied immediately to your account. That means you will receive:
- Exact rules for selecting your tracking portfolio.
- Exact rules for entering your trades at the right time.
- Exact rules for exiting your trades with a loss at the right time.
- Exact rules for exiting your trades with a profit at the right time.
- Exact rules for how much money to bet on each trade based on your unique situation.
Q: It seems strange that someone is willing to give away a process that works.
A: There will be no widespread adoption of the rules we teach. Why? People might not feel comfortable once they learn, or they might not like using rules developed by others. Maybe, they adopt the rules we teach, then bastardize them into something else because it momentarily feels good. Markets, bottom line, are huge and with millions of strategies out there, what we teach will be just fine. Additionally, 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 to something good. They are fine with mediocre results. Most people are happy losing. This issue is also addressed in the last chapter of the book Trend Following.
Q: How has your firm evolved?
A: The original focus from 1997-2003 was assisting clients with only Turtle trading. Services have grown to include a much wider expertise in trend following trading. The current Trend Following Premium Flagship edition is our most comprehensive trading solution yet offered.
Q: Are your trading systems just Turtle?
A: Michael Covel’s The Complete TurtleTrader explains the Turtle story and system in detail. It is the definitive Turtle resource, but our Flagship systems and training go much farther. Human interaction with Michael and his staff, the live teaching element with Flagship content, is an entirely different educational experience.
Q: What is the difference between your books and systems & training?
A: The books are great resources filled with thousands of details, and they have helped many people learn, and some never go beyond the books, but our systems and training with support are different. Questions come up. People need help. Personal instruction gives insights. Additionally, many proprietary trading systems are included (not in the books).
Q: Are your systems and training for the individual investor?
A: Many of our clients are simply individuals trading their own account. Many are with no experience. Some have experience, but the wrong kind. Whether 21 and in college, age 30 working a job, or age 60 in retirement, you can learn trend following trading.
Q: Are your systems and training for market professionals?
A: Our systems and training are also used by experienced traders worldwide. Hedge fund managers to CTAs to CFAs to CMTs brokers to financial advisers on every continent.
Q: How were your systems and training assembled?
A: The great traders, along with their trading rules, are not easily accessed. It’s a very closed club. However, Michael Covel has dedicated his life to assembling their trading systems and lessons (as a result of their direct teaching). Covel has spent the last 15 years on the inside learning from the greatest traders of our time. View his mentors.
Q: The top end of your trading systems at $3000 is not inexpensive.
A: Paying for trading education is far less expensive than losing a fortune with no trading plan (which many do). Our price is negligible if you consider it an investment in your future wealth.
Q: Can systems in the training be applied to shorter time frames like hourly or 4-hour charts?
A: No. Day trading is fool’s gold. Our systems and training will be worth millions to you over a lifetime if you simply understand that day trading is a mirage. More on the subject: Read.
Q: The right exit strategy?
A: Applying explicit exit rules to limit damage during market declines is the name of the game. Survival! 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.
Q: What starting capital is needed?
Q: Will too many trend followers make strategies less profitable?
A: A great example is 2008. Trend followers made a fortune. The profitability of trend following will decline only when human nature, greed and fear, disappear. Also, review chapter 11 of Trend Following.
Q: Talk about retirement accounts.
A: You can trade equities, futures and ETFs in retirement accounts (401ks, IRAs, Keoghs, Seps, etc.).
Q: Trend following works on stocks, right?
A: Yes, to say otherwise is to express profound ignorance.
Q: This is not only for futures trading?
A: Trend following is not instrument specific. Trend followers can and do trade all types of instruments. Some trade futures. Some trade ETFs. Some trade LEAPS® options. Some trade commodities. For example, today trend following traders can trade ETFs and get exposure to stock and commodities markets without having to trade futures. You will learn the best option for your situation.
Q: Is trend following risky?
A: Life is risky. You might get nailed by a car crossing the street. However, if you have a concrete plan, risk can be manageable and upside is unlimited.
Q: Do university classes assist in trend following education?
A: Most finance departments either are unaware of trend following or ignore it. Many of the greatest traders had little to no experience trend trading before starting. Trend following legend John W. Henry (owner of Boston Red Sox), for example, did not have a college degree.
Q: Speak to behavioral biases.
A: Trend following handles the biases:
Trend following actively seeks to mitigate those biases from the ground up.
Q: How much math is involved in trend following for success?
A: The basics: add, subtract, multiply, divide. Some will have more understanding, and that is fine too. However, never forget Oscar Wilde’s insight:
“Life is not complex. We are complex. Life is simple, and the simple thing is the right thing.”
Q: Is trend following trading black box system trading?
A: This is not black box trading. All rules and philosophies taught are fully disclosed.
Q: Do trend followers watch screens during market hours?
A: Some trend followers only trade once a week using weekly bars. Day trading is not trend following. There is no need to watch the screen during market hours.
Q: How much time is required to trade as a trend following trader?
A: You can spend a minute or two per market each day. For example, you check prices in the evening, then with one trade in the morning, you place or change any orders in accordance with rules. Flagship trend following trading systems use daily data to determine buy and sell signals. 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.
Q: Fancy software and complicated trading strategies that seemingly only rocket scientists can trade, is that your world?
A: 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 trend following rules can be explained on the back of a napkin. You will learn to use rules that anyyone can apply for potential profit. Can software help automate trend following strategies? Sure, but don’t let automation fool you. Consider wisdom from Daniel Dennett:
Here is something we know with well-nigh perfect certainty: nothing physically inexplicable plays a role in any computer program, no heretofore unimagined force fields, no mysterious quantum shenanigans. There is certainly no wonder tissue in any computer. We know exactly how the basic tasks are accomplished in computers, and how they can be composed into more and more complex tasks, and we can explain these constructed competences with no residual mystery. So although the virtuosity of today’s computers continues to amaze us, the computers themselves, as machines, are as mundane as can-openers. Lots of prestidigitation, but no real magic…All the improvements in computers since Turing invented his imaginary paper-tape machine are simply ways of making them faster.
One of the most accomplished trend following traders of the last 30 years, a man that has made billions, still tracks and automates his world with EXCEL. Nothing fancy. No mental masturbation.
Q: Can your trend following strategies be automated?
You want the fewest moving parts (less parameters and less system rules) in your system. Primitive and simple grinding out profits over the long term. It’s not how profitable a system is, but rather that it is profitable. Money management takes the positive expectation, moneymaking system, and performs the real magic.
Q: Are markets different now?
A: Markets are always the same because they always change. Trend following trading adapts to constant change. That’s the way to look at it. If someone says markets have changed, reach your wallet. You are about to be picked. Alan Watts the philosopher makes the case for how trend following responds to constant change:
If, when swimming, you are caught in a strong current, it is fatal to resist. You must swim with it and gradually edge to the side. One who falls from a height with stiff limbs will break them, but if he relaxes like a cat he will fall safely. A building without give in its structure will easily collapse in storm or earthquake.
Trend following has give.
Q: 24-hour news is a ruse?
A: Of course, it is a ruse. You don’t need real-time data or news. In fact, you don’t need news at all to be a trend following trader.
Q: Is leverage used in trend following?
A: All great trend following traders use leverage. It is a tool to be used correctly. However, trend following is not about using reckless leverage (like Wall Street banks). Very different animals.
Q: Once training is completed no broker or financial adviser will be needed?
A: You will not need those people in your life.
Q: What do you think of Gann and Elliott Wave?
A: Some people enjoy junk science.
Q: What additional expenses are needed?
A: You need money to trade and daily price data (about $20-50/month). Our clients also receive a special 10% discount with CSI Data (world data leader).
Q: What about breaking into the fund management business?
A: A critical feature of our Flagship is support. You will receive help on introductions, along with hints on how to break into the fund business or just advice on trading your own account.
Q: Do you explain exactly the markets to trade and why?
A: Yes. Diversification across markets is part of the process. Trend following exposure to many markets allows profits to cover losses. Big moves, and the profits from those, offset small losses across a diversified portfolio:
You can trade those types of markets via ETFs, LEAPs and or futures.
Q: Are chart techniques used to pick entry levels, exit levels and where to place stop levels? Do you teach a one-size-fits-all method of level picking or do you tailor it to the individual?
A: No chart techniques are used, but you will know exactly your entry, exit and where to place stops. The rules taught can be tailored, absolutely.
Q: Speak to non-USA markets, i.e. China, Malaysia, Singapore, Brazil, Indonesia, etc.
A: Trend following is for all markets, all countries. Our clients are in 70 plus countries. A map of where our clients live.
Q: Is it really possible to compete against the big funds? Like Bridgewater and Winton?
A: Yes, but this is not about competition. The big funds don’t stop little guys from trading. The idea that big traders block small traders is nonsense. In fact, smaller traders can trade markets larger traders can’t (due to their overdone size).
Q: Can trend following be applied to day trading?
A: No. Anyone that speaks of trend following intra-day, 5-minute bars, etc. is a bullshit artist. That is something else, but it’s not trend following.
Q: Are too many people trading as trend following traders?
A: Broadly speaking the amount of money trading globally applied to trend following methods is tiny by comparison to the mountain of money stuck in buy and hold mutual funds. The opportunity for trend following success is massive.
Q: What are your main criteria to identify a trend?
A: In trend following you don’t do that. In trend following you take entry signals, and have exit signals. After an entry and then exit you can historically identify a trend. Anyone saying they can spot or predict trends in real time is incorrect.
Q: What makes your product different than others?
A: We don’t care to compare to unnamed others. Our one of a kind product is not a commodity. You can only receive it here. Review our books and podcast (and review every last link on this page).
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Trend Following™ can not promise you will earn the returns of traders, charts or examples (real or hypothetical) stated. All past performance is not necessarily an indication of future results. Data presented is for educational purposes. Our products are also provided for informational purposes only and should not be construed as personalized investment advice. All data on this site is direct from the CFTC, SEC, Yahoo Finance, Google and disclosure documents by managers mentioned herein. Trend Following™ assumes all data to be accurate, but assumes no responsibility for errors, omissions or clerical errors made by sources.
Our testimonials are the words of real clients received in real correspondence that have not been paid for their testimonials. Testimonials are sometimes printed under aliases to protect privacy, and edited for length. Claims have not been independently verified or audited for accuracy. We do not know how much money was risked, what portion of their total portfolio was allocated, or their exact positions. We do not claim that the results experienced by such clients are typical and you will likely have different results.
Trend Following™ is not registered as a securities broker-dealer or an investment adviser. This information is not designed to be used as an invitation for investment with any adviser profiled. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund.
Further, Trend Following™ cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing.
Additionally, Trend Following™ in no way warrants the solvency, financial condition, or investment advisability of any security or instrument. In addition, Trend Following™ accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as a basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.