Covel, Why Talk? Just Follow the Trend, Right?

I am often asked, “why offer comment on anything when all you have to do is follow the trend?” Famed technical trader Richard Russell was asked that recently too:

“Russell, you say that the news of the day has little or nothing to do with the market, and that the stock market itself is its own best forecaster. If so, then why do you write about anything but market action?”

Russell responded:

“Good question. I write about news, ideas, history, the War, poetry, religion, jazz, dogs, my own life, health concepts, thoughts, all with the goal of keeping myself (and hopefully, my subscribers) interested. The world includes a great deal besides the markets, and I think about those other items. Maybe I should call my writing, “Richard Russell’s Daily Blurbs” or something like that. At any rate, I just keep writing about what interests me, and I guess that includes just about everything.”

I see it similar to Russell. For example, understanding trend following and doing it are two different things. Exploring assorted insights to help people ‘dial in’ and ‘get it’ — is fun for me. Additionally, I enjoy nailing the government. The notion that suits in D.C. should micromanage our lives, when they seemingly have no clue, is insane. Pointing that out is also fun for me.

What will you not find here?

You won’t find me professing a bull market on Monday and a bear market on Wednesday. You won’t find me giving you some fundamental baloney about where the market is headed based on some treasure trove of useless economic data. That stuff is mental masturbation.

But still not everyone agrees with the idea of trying to write about the trend space — even friends. A trend trader, who I think does nice work, wrote me other day summing up nicely why he thinks even talking about trend following is pointless:

1. It is a great threat to the fundamentalist financial establishment so they will do everything possible to not cover trend following and prohibit by any means necessary it’s promulgation.

2. Many investors trade for ego satisfaction and/or thrills and will not follow the enforced discipline of a mechanical trading method.

3. Investors are obsessed with trying to buy at bottoms and sell at tops which trend following not only does not do, but finds that attempt to be a losing proposition.

He has a point!

19 thoughts on “Covel, Why Talk? Just Follow the Trend, Right?

  1. To be s successful trader you have to more than just follow the trend. MONEY MANAGMENT!

  2. “implies inclusion of money management.”

    And the inclusion of money managment is what you sell to people… thats why you dont want to post my shit. Its a lot more sophisticated than yours…

  3. I make the decision to turn people off very rarely, but in this instance it appears to be a wise move. The above individual just sent along an email response:

    “Simple reason why you suck at trading. You have no balls dude. Deleting comments and shit. That’s the way you wanna go down. Can’t defend yourself? Your pathatic man. Your a disgrace to all traders. You’ll hear from my lawyers…”

    Lawyers?! How exciting!


    Note: There has now been another 10+ emails calling me every swear word under the sun from “Nader”. Those were originally posted by me, but I think the point has been made — time to go.

  4. lmfao! Why am I not surprised when a self-professed dip buyer blows a circuit on a day when the primary trend strongly reasserts itself?

  5. And people wonder why success in life is hard…this interchange reminds me of the Afterword in my book “The Complete TurtleTrader.”

  6. on topic ;-)) I enjoy reading your blog. valuable source of no 1001 sheep mainstream news propaganda. Luckily there is internet nowadays.

  7. Michael: This is your site, on your dime and your risks, (so thanks for that). We’re guests here, so it would be nice if we all behave accordingly. As for your postings, keep them coming, I read Russell for his other commentary as well, nothing is done (such as learning) in a vacuum.

  8. Thanks Bryan. In terms of Faith, that was not my experience, nor the experience of many interviewed for the book. You may want to also take a read of my complete book on the turtles.

  9. Michael,

    Remember, when a person has no realistic argument against your position and can’t accept they may be wrong, they resort to name-calling. We see it all the time in government and politics, and we see it in the sideline comments you received as noted above.


  10. You have delete people who can’t have a decent discussion without flaming or swearing. If you don’t your board will go to hell.

    I know it turns me off when I have to scratch around like a chicken looking though idiotic comments like you described. If someone disagrees, disagree and explain why and be done with it.

    I like your work and have found it very useful. I don’t believe “totally” that the trend is all that matters, “at this time anyway”, but I think it can be relied on greatly and it makes sense. I’m still exploring the art of trading. I’m doing OK.

    When markets change and whip-saw Trend Following has the potential to set you back big time. Other approaches might be better in these periods. And I think it would be a little foolish not to think a little about the fundamental of a stock, or pay attention to the news about your stock.

    It’s all just my opinion based on observation. I’m not the type who swallows something hook line and sinker or I’d still believe in God and The Bible… Don’t get me wrong I believe Trend Following works in principle and practice, just, there is room for other approaches.

  11. Herman says “… trend following works in principle and practice, just , there is room for other approaches”.

    No, there isn’t. This requires a prediction (of when to use trend following or a different method) so you are 100% incorrect according to the very definition of trend following.

  12. Every once in awhile I receive a nasty email from a potential subscriber. On one of those occasions I showed it to my wife and asked her how she would respond. She said, “I wouldn’t respond.”

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