Ep. 175: Dylan Evans Interview with Michael Covel on Trend Following Radio

Synopsis: Michael Covel talks with Dylan Evans. Evans is a British academic and author. The one subject that really caught Covel’s eye is the idea of “risk intelligence” (see his TED video which is great): expected value, bet sizing, certainty, and process vs. outcome. Evans does a fantastic job of getting at these issues (critical to traders and just about anyone else), and these are the critical issues not only to trading but to life. Covel and Evans discuss expected value, the definition of risk intelligence; optimism bias; correlations between IQ and risk intelligence; the Brandywine Raceway in Delaware and unconscious statistical modeling; probabilities and the nuclear power risk issue; making decisions on uncertain information; the expected value mindset; bet sizing; how luck is always part of the game; knowing when not to bet; the hidden costs of trying to eliminate risk in a system where risk can never be eliminated; and the “calibration test” for risk intelligence. Dylan Evans can be found at projectionpoint.com. Want a free trend following DVD: trendfollowing.com/win.

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. Out April 24th 2017.

3 thoughts on “Ep. 175: Dylan Evans Interview with Michael Covel on Trend Following Radio

  1. Michael, your comment about a trader betting 10% of his bankroll/capital on a single trade or position as being too risky is very inaccurate according to some traders. Those “some” traders happen to be the most successful stock traders ever documented. Like world champion Dan Zanger, U.S. investing champion Mark Minervini, and the stellar founder of IBD, William O’Neil. They all agree that the ideal position size for an individual trader is about 25%. That’s right, just four positions for a fully maxed out account. It’s not done will nilly, but in a very structured and disciplined manner. They’ve written books on the methodology I obviously can’t spell out here in less than many thousands of words, but that’s what they believe. Thanks for hearing me out on the subject. Cheers.

  2. any trader who has taken the proper education would trade 2-3% max for most trades. 5% would really be pushing it out.
    who would trade 10% ? i wouldn’t give my money to anyone to manage if they were risking 10% per trade.
    thats just nuts

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