The Thoughtful Feedback

Feedback in from a reader:

Michael, Hello. First of all, thank you for all of your efforts. I have read all of your books and listened to nearly all of the podcast episodes, and am a big fan. Keep it coming! They are really interesting and needed! I like that the podcast have a good amount of “bite” to them. You can tell how much conviction you have about this subject.

Late last year I backed my way into becoming a trend following trader. I lost a lot of money (for me) in a very short period of time (when the government debt-ceiling situation was going on last summer), and stopped trading for months. I told myself, I would not trade until I “figured this shit out.” What I ended up w/ is a trend following, systematic approach. I used to read a ton of news, watch CNBC, take “hot” tips, etc. but have quickly learned that true wealth is not built that way. This year I was lucky enough to find your resources, and am glad I did. It is helping me take the system that I developed last year and build it out completely and with confidence. I’ve truly learned a lot.

Anyhow, I wanted to give you a few ideas for your podcast:

  • I think it would be interesting to interview X amount of traders – half fundamental/news oriented and half system/trend followers. You could do this verbally or via a form… Then, 2 years or so down the road, talk to them again and see what has happened in their trading career and the results they’ve had, etc. The reason I say this is b/c if you had interviewed me from 12 months ago and again now, it would be comical! I had no selling plan (and I am very plan-oriented!) or consistent strategy. It would be a performance battle of fundamentalist vs. technical.
  • Brett Steenbarger is an outstanding author as you know – he would be a great interview.
  • Entrepreneurship vs. our education/factory system that isn’t working – I know you just had one podcast on this (and mention it frequently), but more on this would be great. We, as a country, are not in good shape going forward.
  • Selfishly, I would like to hear more detail on position sizing and risk management – my automated strategy trades only stocks currently, but I have a diversified group and plan to trade international stocks in the near future as I ramp up my trading to my full account value.
  • The relationship between sports and investing/life… I played college football and can relate nearly everything to the sport, just like you can to baseball. I think sports are my most important degree – more so than mechanical engineering and business.
  • Seth Godin – this is a stretch, but he is brilliant. At least talk about “prajna” that he refers to… Central to being a linchpin is the ability to “see things as they truly are” or what the Buddhist might call “prajna”.
  • More about this: in your opinion, can trend following be successful with stocks?

Here are some good articles that you may enjoy: 1, 2, 3.

Also, you’ve mentioned that you attend some conferences; are there any that you would recommend for trend following/system traders? I would love to go to some, but haven’t found anything great just yet. I live in Jacksonville, FL but am mobile.

This is quite funny – one of those “free money” schemes…

Sorry for the long-ass email, but hopefully you have found some value here. Keep up the good work. I have included more information on me in case you’re interested.

[name]

My story in a nutshell:

  • 26 years old
  • Mechanical engineer by degree, minor in Business
  • College football player – team captain, ESPN Academic All District 1st Team, yada yada
  • Currently work for a Fortune 4 “big oil” company.
  • Will not be working for “the man” in the near future – I am no doubt an entrepreneur at heart.
  • I’ve been a version of a trend follower since late last year – I trade different time frames than most of what you do, but everything you teach still applies.
  • I created my own system from using the problem solving method (engineer) – I wrote down everything I hated about the market/trading, and found a solution for each one of those things – ultimately, it came to a programmed trend following system.
  • I have tested it, programmed it myself, and tried to poke holes in it for the last 7 months.
  • I just started my automated trading this week on my own money now that I feel very confident in it and have countless paper results.
  • I believe my personality and skills will allow me to be a successful trader – unemotional, disciplined, logical, calculated, frugal (risk mgmt), ambitious, efficient, I know what I don’t know (self-aware), entrepreneurial, etc…
  • My edge is in the math and in mastering my psychology. I try to take pride in seeing reality, which is so rare in the world.
  • I’ve read well over 100 books in the past 1.5 years – Trend Following and The Complete TurtleTrader are in my top 12. The Little Book of Trading is in my top 30. Excellent books!
  • I don’t even have cable TV and don’t remember the last time my TV was turned on other than when my family is in town – maybe last year. Once you realize that CNBC is a business and entertainment, you can only watch it for the laughs. People really listen to Jim Cramer? I did.
  • Planning to step away from my company within 12 months as I want to be 100% in the investment industry; I want to start my own fund after learning from another great trend following trader for some time… The biggest thing I battle with is if/when to leave my company, but I have a sweet set up now where I am able to trade and learn (work from home!), so I am getting results under my belt at low risk… However, entrepreneurship is inevitable, no doubt about it.
  • Motto on life: ONE

Thanks for the great feedback!

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You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.