On “small” accounts:
Hello Mr. Covel,
I’ve read your books and think they are great. You also have a great web site. I was wondering how your course addresses a small account or small starting capital? I’m considering purchasing your course, but trend following systems typically tend to require a large starting capital according to the majority, yet some of the greatest trend followers only started out with small sums of money. Thank you.
On trend following for stocks:
Do you know of anyone who critiques long term trend following strategies on equities, or would offer advice on improving one if it was shown to them? Thanks for any direction or leads you care to offer.
I started trading the system you taught from Oct 2007, it’s been 15 months and I have been very happy with the results. Returned 9.33% (2007) and 60.85% (2008). Just want to keep you posted of my progress. I am still learning lots about myself on trading and learning to control my emotions better. You are right that it’s us who mess up the system and not the system itself. Thanks.
Peter T., Singapore
I read the book ‘Complete TurtleTrader’ and was blown away. What a great story. I have been trading for a few years and the system they used has clicked the light on for me. I am from Boston and I wanted to look up Jim Melnick and ask him some questions. The story how he moved to Chicago just to meet Richard before the add was even in the paper was remarkable to me. Amazing story that just shows, if you give the right people the tools they will succeed! Any help finding him would be greatly appreciated.
Boston Fire Department
On a trader college:
I am now after 5 years a competent (not yet wealthy, but soon) online FX trader, with trend-following a major component of my technique (thanks to guess who). I somehow found my way 5 years ago to your website with its surplus of posts & general market wisdom & straight talk, instantly grasping that this was essential and an oasis from the endless desert of bullshit, and it has made the difference. The psychological foundation you helped me lay with these collections of market-related info & common sense has been essential in my eventual success. I haven’t yet bought your course (I hope that doesn’t invalidate my gratitude), I just wanted to pass my heartfelt thanks, having returned to look at your website after a while of not visiting it, reminds me of how important & irreplaceable it is with no substitute on the internet. You shouldn’t just sell trading courses, you should start a college for traders…
Dear Mr. Covel,
I am very happy that you decided to following up on and publish information concerning the Turtle experiment. The two books that you published are great and contain a lot of detail that is simply not contained anywhere else! For that, I thank you greatly! However, there are still some questions that I had that perhaps you could assist me with. I understand the original turtle rules but still have a couple of questions. First, do you start counting new highs after the price crosses over the moving average or do you base the count on the price itself? Second, once engaged in a new position and you get stopped out, do you continue to enter again endlessly after a new high or low has been made? I only ask this due to the fact that many trends that the original turtles looked for were not successful. Due to this fact, should a trader continue to to enter the market taking huge losses for a possible trend that may never materialize? Anything that you can do for me in this regard would be greatly appreciated.
Dear Mr. Covel,
I have read both your books ‘The Complete TurtleTrader’ and ‘Trend Following’. I love the both. I remember going to the book store a year or so ago, picking up The Complete TurtleTrader and then putting it back down. I wanted to learn more about investing, trading was of no interest to me. Yet strangely enough a year later in one of my MBA classes a classmate was reading the turtle book, I began talking with him about it and soon found myself going back to the bookstore to get my own copy. I was instantly hooked, and powered through your book in two days. Since that point I have been reading and trying to learn everything I can about trading, futures, trend following and technical analysis. Through my schooling and my job I have been trained to look at companies and investments from a very fundamental perspective, even in the face of the efficient market theory. Your description of trend following made so much sense to me. Your books have exposed me to a world which I find so interesting and I now want to do what people like Salem Abraham have done, I want to make trading my life. I am now to the point where I have a system I want to test. However, I am having trouble with the script writing in Wealth Lab Pro. The drag and drop function does not seem to provide all the necessary variables and parameters I am hoping to use. I am basically clueless when it comes to programming, I have finance and accounting degree, so it is a bit foreign to me. However, I do want to learn. I was hoping that you would be willing a able to provide the script you used for one of the systems you tested in Trend Following using Wealth Lab Pro. I want to use it as an example to learn from. I think if I had a script to look at I would be able to derive how to create my own. Thank you very much for your time and your assistance, as well as writing wonderful books.
I just wanted to say hello and extend my thanks for what I considered an excellent book in ‘Trend Following’. While I have been trading for myself for quite some time now the recent market activity has taken my trading strategies and studies, as well as how I look at the financial markets in general, to new places that I would not have dreamed of a few years ago. Your books have represented a notable portion of that journey and new study. I hope to some day write you again in the future to confirm my success and give my regards once again, despite my past and current successes for now I still consider myself a humble student of trading the markets.
On batting averages:
Hope you are doing well. I came across your website/book when I did a Google search on “trading like a money manager”. Your website came in 4th below the sponsored links. I wanted to let you know that I am a early trader who has made some emotional mistakes during this crazy market that we have be experiencing. I had entered the market sometime in 1995 lost money and left it. Did not think about until this year again. I started out well however got caught up in the hype and lost money again. I started to watch some of your videos and also have been reading some of the blogs. What you describe is a very technical approach. Is there a batting average on this approach? Thanks.
I have read and very much enjoyed both your ‘Trend Following’ and ‘Complete TurtleTrader’ books — how refreshing to find such clear, concise, no bull analysis. I am interested in purchasing the training but want to make sure it is appropriate for the markets I want to begin with. In particular I am most comfortable starting with ETFs (and mutual funds — though I find myself going more with ETFs because of the liquidity). I noted that most of the trend followers were in the commodity markets — but the texts and your site seem to indicate the basic approach would work with ETFs (though the returns may not be as dramatic). Am I correct in my impression? Thanks for your consideration — and thanks again for your work. Please let me know if you need more information to respond to my question.
On day trading:
I have been a big fan of your blog and read ‘The Complete TurtleTrader’ cover to cover and am very interested in purchasing your system available on your Web site. Currently, I am a trader a private equity company, but we do not carry overnight positions and I noticed you said your system is not for day traders. Should I take that to mean I would not gain any benefit from purchasing the trend following system or would be more useful in trading longer time frames than just intra-day?
Thanks a lot,
Dear Mr. Covel,
I am planning to purchase the Trend Following Course w/ Audio CDs and I would like to find out about the student discount. Specifically, how much is the student discount and what proofs of enrollment do you require? I am a Finance/Econ major at the University of Nevada, Reno. I intend to pay via check instead of by credit card on the website, if that makes any difference.
I’ve been and I am studying commodity and futures trading because I want very much to become a trader and I am ready to cope with the difficulties and risks of such a business, but I feel scared and frustrated by such declarations coming from someone who should know the difference between speculation and manipulation. What do you think? Is the futures trading business really in danger of extinction or is it just a witty remark said to look good before a Senate hearing?
Marco G. (Italy)
We spoke Friday thanks for your time. My plan is to buy your course as I have been a big believer in Trend following as it makes intuitive sense and I want to really learn some robust methods. The nagging problem for me is that my experience has been lukewarm with trend following with stocks due to draw downs (some 40% and greater)now I did not use very tight stops as the program did not use them and I got whipsawed a lot. Do your methods discuss this problem of stop placements? What kind of draw downs should one expect? How about compounded annual returns? Monthly? I subscribe to Jim Rohrbach’s letter and over all have been happy with thee downside protection but not so much upside the gains over the last 6-7 tears. Although he has done much better than the market. Do you recommend any other letters that use trend following?
I’m sure you get lots of letters from emotional, maybe almost rabid followers who sing your praises. What I can tell you about myself is, you’re making a difference in my trading and I want to take the time to thank you. I got pretty ill in the 4th quarter of last year – a ruptured appendix that went for 3 days undetected and according to the medical professionals, was 12 to 24 hours away from critical. A serious infection, and two weeks of IV at home twice a day only to be followed up with a surgery to remove my gallbladder and my reality suddenly became something like thoughts of making my wife a widow at 26 years old. We all have stories and different motivations. My motivation was one for change in my life, including selling my business and starting a new life. As a trader, I’m afforded the freedom and flexibility of my time something I cannot easily put a price tag on. What I can tell you is that the prospect of that freedom is not something that I’m going to easily give up on and you’re helping me fight that battle. I can’t thank you enough.
West Palm Beach
On raising money:
I have been reading your post and books since a couple of years. I found them priceless. And I can tell you this from my position of Fund Manager in the Spanish industry of Asset Management. I was the manager of the Fund since January 2008 until the beginning of November 2008. As you can guess because I am writing you, I use mainly trend following strategies applied on many products and different time frames..I just wanted to ask you if it is different around your network. Maybe in USA there is some thirsty for absolute return managers being trend following their core strategy (we use other strategies to “smooth” the volatility). In some way, this letter can be consider as an offer to you. I wanted to write you in another circumstances (maybe in a speech you can give to our Jurassic Spanish Asset Management industry?), but here in Europe our potential clients just think that if you can earn money in any condition, it is because you are another Madoff.
On spreading the word:
My name is Adam A. and I work for a major Swedish bank. Me and four of my colleagues started a manged futures operation within the bank about 2.5 years ago, after spending several years doing research. While we employ a lot of different sub-strategies in our fund(s) I guess it’s fair to say that we are systematic trend followers. Or put differently, we do quantitatively driven, systematic directional trading. What is somewhat (or very) unique with our fund is that we created it with the retail investor in mind. Thus, there is no minimum investment level in our fund…What I wanted to check with you is if this sort of success story is something you would want to write about? Spreading the word that there is a manged futures retail fund out there, sort of speak. Today 90% of our flows come from Swedish customers (in SEK), the rest from Euro-investors (in EUR)…Please let me know if this is something that you would like to do something with.
Thanks to your books and website, I have been enjoying spectacular returns like other trend followers. I am very interested in setting up my own fund, but am confused on the steps I need to take with the regulatory bodies. I’ve been on the NFA and CFTC websites but am unclear on exactly what I need to do. I was wondering if you knew of anyone I could speak to or email back and forth with that could help me out and give me some guidance (almost like a mentor). Right now I have 2 solid years of performance, and wanted to get this year under my belt before setting up my own fund and marketing myself.
Congratulations on a fascinating book. Ever since I read it a year ago I have been inspired and looking and working on my own systems programming and found your suggestions at the end of your book on ‘Trend Following’ for building a system very succinct and helpful. The only problem is that I keep hearing how John W. Henry has managed to build a system that works across all markets and no matter how hard I try I just cant seem to find the answer. I have systems that are good on currencies (back-tested over 30 years) but useless on indexes, or systems that are good on indexes, but useless on commodities. I have tried breakout systems (89 day with 13 day trailing stops) MACD crossovers using long and short moving periods, etc. I am a spot FX day trader profitable until this current period of volatility. I want to go automated. Any help would be greatly appreciated.
If my technique has back tested with a 100+% year last year, a 87% return in 2007 and a 73% return in 2006 I think that the technique is correct or at least on the right track. I have the discipline to follow the technique since I have always traded with a systematic type system. I was just looking for some advice to confirm if my technique is good or not. I wanted to use your expertise since you seem to have the most experience in this area. What then would you recommend for someone like me? I have the FX system and about $10,000 to trade it live. I think this is feasible due to the capabilities to trade mini lots, while using money management techniques. This is the only risk capital that I have. Please advise… Sorry if I am a pain in the neck, but I want to be on the right track as I want to trade (Trend Follow) for a living.
On the early days:
Dear Mr. Covel,
My name is D. L. and I am reading with much interest your book about Turtle traders. I was Pillsbury’s wheat trader in the pits from 1980 to 1983, and traded size with C&D many times. Dennis, Willis, the O’Briens, etc. You are correct – we (Pillsbury) were huge traders, and we had vast amounts of info at our disposal. Pillsbury was deadly when compared to the Cargills of the world in those days because we all had our own profit center trading accounts in addition to working the enormous commercial hedge balances. Cargill and the others had employees, but Pillsbury had traders. They did not stand a chance…I have been drafting my notes…, but frankly am a trading mind, and not gifted with the prose. If you are interested in a true “Trading Places” type event for a book, feel free to contact me. Good job with the book.
On too many traders:
I am a Finnish asset manager and I have to say that I really appreciate your work. I only wish people would not believe you because with too many trend followers around my methods might not work anymore some day.
I am interested in obtaining a price for your in-person seminars. I will be the only person attending your seminar, but, I am not against attending your seminar with some other group. I am not necessarily demanding a strict one-on-one seminar. I must also tell you that I was a stockbroker from 1985-1999, therefore I already have a background in investments. Hopefully, we could skip some of the more basic stuff. I was diagnosed with lupus in 1997 and was forced to retire in 1999. I came into some money recently and I am looking forward to re-opening my trading career. I am interested in knocking some of the rust off of my experience and I figure that the easiest and quickest way to do that would be to attend a seminar. Considering Richard Dennis’ reputation as an investor and having read your book, I figured that your seminar might be the best place for me to start. I am evaluating the price/reward feasibility of your one-on-one seminar as opposed to your ‘Trend Following Trading Systems Course’ with (6) audio CD set. I live near New Orleans so I can attend a seminar at either your San Diego or your Virginia location.
I’ve been “following” the TurtleTrader site for a number of years, and in fact bought your course back in either 1998 or 1999 (it was a while ago). For various reasons, I’ve never followed through with really learning trend following and applying it to my investing. However, I’ve wanted to for the past decade, and now I’m serious about doing it. I know could learn everything from the TurtleTrader course, but I think a one-on-one training situation would be better. Coming to San Diego is no problem for me to do. I would like to know the cost of receiving one-on-one instruction and how to set it up. I should let you know that I am a very quick learner, so the possibility of covering the material in one 8 hour day is possible. However, I would prefer a two day approach depending upon the cost. I have a background in math and science, so there are no issues with understanding the material. I have also been dabbling in futures and options trading for the past decade. It is really more a question of implementation. That’s where I need the help. Once started, I know I can really run with trend following. Please let me know the potential costs and how to proceed. Thanks in advance.
I left you a voice mail on Thursday. I am a former pit trader on the Chicago Mercantile Exchange. After making and losing a fortune in trading, I bought your book “The Complete Turtle Trader”. It piqued my interest because I had been opposite so many Richard Dennis trades in the Eurodollar pit. I have to say that I have completely bought into trend following after reading both of your books repeatedly. I am interested in starting a managed futures fund using trend following strategy. I would like to do as much research as possible and am interested in taking your private seminar. Could you give me pricing breakdown for the seminar for one person coming to San Diego? Would you recommend doing the home study prior to the seminar or is the seminar designed to cover the home study content as well?
A happy new year to you! By way of introduction, I am currently a sophomore studying business and finance at the University of Michigan, with a deep interest in the trend following approach. I finished reading the book sometime in April last year and in the intervening 8 months between now and then, have experienced firsthand the power of the approach, both in trading and in life. This can best be summed up by an experience that I had pitching a trade to members of a trading club in my school. I decided to pitch a trade shorting the S&P 500 sometime in the middle of the financial upheaval, which I had structured using trend following rules. As such, I clearly defined the reasons for my entry based on a Donchian breakout, as well as the stop loss and position size based on the ATR. Before the pitch, I remember feeling very confident that the club members would vote for the trade and invest the club’s funds in it. After all, the down trend was so pronounced and obvious. I was wrong. They disagreed with me on many counts, namely on the size of my stop loss (which I had set at 4 ATR given the volatility of the markets at that time), the usefulness of ATR, and most surprisingly, on the direction of the trade itself. Indeed, many of them were calling a bottom in the index, which amazed me. How could they believe that they could predict the future? While they spurned the approach, I saw and understood why you say in your book that trend following was too simple to be accepted. While they were busy calling bottoms at levels in the index, I understood that they looked, but did not see. While they balked at my stop loss, I understood that they probably will never understand, or shoot for the home run. They just could not wrap their heads around trend following. While I was admittedly disappointed at their negative reaction, I chose not to debate too fiercely for my cause, as it was clear that almost every member had closed their minds and refused to learn more about my approach. Furthermore, I could feel the urge to prove myself right, as my ego just could not stand being bashed in front of 60 other individuals. As such, I decided to hold back my arguments, as I saw that should I begin debating, my focus would be on being right, and not winning. After all, why should I care if I looked stupid, or if they did not believe in my methods, if I knew that it would make me money in the long run? After the pitch, I felt as though I had defined myself as a trend follower, as someone who had broken free of Wall Street and its stranglehold on trading and investing. I felt liberated, as I had found a way of thinking that made perfect sense, and empowered, as I discovered that I had such belief and confidence in it that even being laughed at by the entire club did not cause me to doubt myself. As such, I would like to thank you for writing Trend Following, as it has allowed me to adopt perspectives that I never would have been introduced to. I am sure that it would warm your day to know that your book has made a difference in someone’s life. I would also like to humbly ask for your assistance. Having realized the power of the psychology behind the trend following approach, I have been driven to learn more about it, reading other books on the topic, as well as following your website. In addition, I have built my own trend following system, paper trading it from September ’08 to December ’08. The system worked well given the huge trends generated by the financial turmoil in that period, returning 35% as of new years’ eve. Building and testing the system also helped me realize how much I enjoy the approach, and as a result, I am seriously considering managed futures as a career path. Unfortunately, given Wall Street’s dominance and the general seclusion of trend followers, it is difficult to find any way or means to obtain more experience in the field. Thus, I would be extremely appreciative if you could provide any contacts, or advice, as to where or who I could write in to ask for summer internships, as I realize that in order to further myself, I need to be around individuals who have experience in thinking and trading like a trend follower. Thank you once again, I hope that 2009 goes well for you.
I just finished reading your New Expanded Edition of your “Trend Following” book. I appreciate your effort in synthesizing numerous issues relating to trend following. I’m a business owner with a lot of flexibility in my schedule and want to attend a personalized seminar that would help me develop a trading system. The systems I’ve used in the past have not been too successful. Doyou have any recommendations where I might be able to work with a previously successful and well respected trader on a one-on-one basis? Thanks for your reply.
Almost, I’ll be finish with the “Complete TurtleTrader”. I’ll looking for someone who has been either trained or someone who completely understands Richard Dennis’ philosophy to train me directly. If that’s you, then I would like you to train me, if not I would really appreciate if you could direct me to someone who could train me. Either way I appreciate your time thus far.
Some general responses:
1. Many of the answers to these questions have been posted on my FAQs here. Of course, the writers themselves all received personal responses and the vast majority either are or have become clients.
2. I have tried to be as comprehensive as I can with my books, and there are thousands of pieces of trading wisdom assembled in both, but they can’t be everything to everyone. People have questions. They often want personal support. For readers who want to gain more than my books, home study and personal training that is, I do offer options.
3. I have always had two types of potential clients: those who realize that I provide useful information for a price and those looking for something free. My business serves both of those clients. My websites (and my books) are loaded with free information. Perhaps more unique pieces of trading information are assembled on my sites than any other online location. So, if all you want is “free” there is plenty. That said, free is not everything. My paid assistance can save you time and money over the school of hard knocks (and as we all know the school of hard knocks can be expensive).