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When the Trend Following Light Bulb Hits

Excerpts from nice feedback in tonight:

Michael, I want to thank you for pursuing your passion for trend following so tenaciously. I consider myself very new to the concept of trend following. I was first introduced to this style of trading and the story of the turtles traders in 2007 by a mentor of mine. I was 25 years old. At the time, I had become very interested in trading, stocks, and the allure of making money in the market. All the “knowledgeable and older” people I spoke to of this passion said there’s no such thing as fast money and it was best to stick with a buy and hold strategy. The message was, I should save 10% of my income and wait 40 years and I’d retire as a wealthy person. During this period, I read a few books on trading, mostly about using fundamental analysis and executing a buy and hold strategy to identify stocks with a high growth potential. I executed a few trades, made some money, lost some money and than walked away from trading believing it just wasn’t for me. I started funding my IRA and 401K using run of the mill mutual funds and put my active trading interest on hold. Fast forward to last summer, I am sitting in a tent in Kandahar, Afghanistan working for the U.S. Air Force. It’s the middle of the night and after reading on the Internet for days about trend following and the turtle traders story, I declared to a partner of mine. “I am going to teach myself how to trade.” He laughed at me and said you’ll likely lose all your money and for Gods sakes don’t buy some canned trading training program. He told me if your going to learn to trade, teach yourself, because that’s probable the only way that’s you’ll be successful. I thought it was good advice and I followed it. By the middle of the summer of 2012, I had become disgusted with the options I had for a executing a traditional buy and hold strategy. I had watched friends and family lose thousands of dollars in the 2008 crash, than gain some of it back, but at the same time, intuitively it didn’t seem right to me that I should be investing my hard earned money in mutual funds knowing those fund managers must be making millions on us “Joe Public”. Do they have my best interests in their hearts? What makes them smarter than me? How come it seems like the game everyone is playing is fixed? Additionally, I felt like having to be an expert in stock picking by reading companies balance sheets, or discerning broad trends, or by identifying hot market sectors through the news wasn’t going to work for me. I thought diversification only meant buying and holding different asset classes based on a defined time horizon. I didn’t understand what technical analysis was. By this time, I was trading here and there, but all the time, I felt like my activity was no better than guessing. I had no idea how much of an equity to buy, how long to hold, or what the function of a stop loss was. I didn’t understand the concept and application of trending following. I’d never heard of an automated trading system. Sitting in that tent, that very night, I went on Amazon bought 3 of your books, had them shipped to me in Afghanistan. I than began reading everything I could find on trending following, the turtle story and alternatives to discretionary trading. After I made this decision to teach myself to trade, it was as though something clicked in my mind. Ed Seykota says “intention = results”. Well I intended to learn to trade and I intended to use trending following as the vehicle. Thanks to the guidance, data, results, and discussions on trading software outlined in your books I’ve been able to make this happen. From your books, I’ve learned 90 percent of what I need to know about trend following and the rest was filled in by additional reading and through though trial and error. I kept thinking back to my past trading successes and failures, and realized I had been blindly making classic trading mistakes. After I made the decision to pursue developing an automated trending following system. I found the work in your books invaluable in solidifying and clearly defining a path to an alternative way of thinking and trading. Something about your descriptions of taking emotion out of the trading process was deeply appealing to my mind. Armed with all the evidence and knowledge from your work, I am now able to confidently say trend following is really the only method for trading that I can see will win in the long term. It was through your work that you lifted the val on this style of trading for me, and I’m sure, many other people like. In closing, I want to thank you for being so passionate about this style of trading. It comes through clearing in your books, on your websites, and in your podcast. Without your dedication and passion for trend trading, I wouldn’t be applying my own passion for being successful in my life. I just wanted to tell my story about teaching myself how to trade; going from zero to an active trading system by sheer determination with an intention to following a different path outlined through your work and others like you. Hopefully, I can endure the inevitable draw downs and second guessing that comes with trend following. Armed with the knowledge outlined in your work, I think I can.


Winners just win. They want it. He wants it.

Recommended Reading and Posts

Table of contents for the Trend Following Book; FAQs round 2, Interview with Alison Gopnik, Buy and Hold Exit Strategy, Erik Wahl Podcast Interview.

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