Trend Following FAQs: #3

Babe Ruth, Moneyball and Trend Following
Babe Ruth, Moneyball and Trend Following

My main frequently asked questions page is here, but this is another page of questions in from readers:


Q: I’m huge fan of the podcast and I’ve read Trend Following and The Complete TurtleTrader. The idea of trend following, as a trading strategy, resonates with me. Trading all markets and trading human behavior, so to speak, without worrying about the impossible business of predicting future outcomes, is a strategy that makes sense to me. I want to be able to cut out the noise, ignore the fed, prevent emotional decision making, avoid analysis paralysis, but still be able to identify “cheap and hated” sectors where the best money is made. Trend following might help me do these things. What I’m unclear on is what it takes to create a Trend Following system as an individual rookie investor. I’m sick of pitches on “proprietary systems” that beat the market. They all spin a good story. I don’t want to be told what and when to buy and sell. Would the flagship system show me to how to be a trend follower or just give me access to “Covel’s secret system.” I know Michael Covel knows his sh–, but I’m tired of “secret systems.” Has Michael Covel devised a way to sharpen the trend following learning curve? Or is he, in the end, selling recommendations?
A: Flagship is not recommendations. Read more here on how to build a trend following system. See all links in the footer of each page too.

Q: Michael, I just want to say I’m an avid listener and fan and of your podcasts. Please, keep on doing what your doing. Ever since I started listening to you a few years ago I’ve been hooked, I guess even obsessed with the idea of trend following. It just makes sense. I’ve always been a closet financial enthusiast who enjoys learning, listening, and observing the market place. However, I’ve always felt like an outsider largely because I’m immersed in a career that has nothing to do with finance or what I’m truly passionate about. I just turned thirty and have been struggling with the internal battle of whether or not I should end what has been comfortable and familiar to me to take a stab at what I know I want to pursue a career in. I was wondering if you’d be able to offer me some advice? How does a guy, like myself, a real bitch-ass-go-getter, make the leap? I know I’m not the smartest person. I’m not a mathematician or a quant. I don’t have a bachelor’s degree in economics or have worked in the financial industry. I’m just a a young guy who works hard and wants to surround himself with smart and intellectually engaging people established in the CTA space. How do I get involved? It’s a question that’s been in the back of my mind for a while now.
A: Best path:

1. Podcast
2. Books
3. Flagship
4. Resources

Q: I have just recently come across your website and very interested in knowing a it more about your Trading System package. I have viewed your entire website and the Flagship. I am from Australia, and have been studying numerous hours for the last 6-7 years to find something that is going to work for me, so I can trade the markets and become profitable, but until today still nothing is working for me. It feels like I am going round in circles…I have studied cycles and cyclical analysis and astrology but still have trouble making money, using these methods for trading. By using your Trend Following system and knowledge, [is this] going to help me become profitable? And if so, can you please give me some more information on how your system works and what is involved in learning it. Please provide as much information as possible for me to understand your system. Also what are the steps involved in learning your method?
A: Read here and here.

Q: I have read and viewed all of your links and information on all the pages. As I have done so for the last few days before emailing you. Thanks. With me having no knowledge of your trend following program nor no knowledge in trading your way. Is it easy basic to learn and pick up? As I am only 28 years old. And what is the time frame going to be for me to learn the system/knowledge and starting to use it? Eg: 3 months, 1 year etc…? Is there any possibility you can send me a few pages of what is involved in the course so I would be able to see what it looks like and so I can see if it’s going to be suitable for me to understand and follow? How does trend following get used? Using normal shares, CFD’s, futures, options etc.? The reason why I ask all of these questions is because I have lost a lot of money trading mainly by CFD’s and not sure if I should change career paths completely. But then again I have always wanted to become a stock market trader and have been interested in the markets since I was young. I don’t want to give up on a goal I have wanted to achieve, but then again I want to be sure that this is going to be profitable and will make me money. I have studied for nearly 7 years, been trying to find answers and I want something that is going to work for me once and for all. Also does the trend following package get sent all by post straight to my door?
A: One part of package comes FEDEX to your door. Other parts delivered online. You can trade ETFs, Leaps options or futures. It will be a choice. No CFDs are used. Complete beginners are my clients, many much younger than you. Age is not an issue. I give extra resources for beginners beyond trend following too. Most beginners can learn in less than 90 days. I don’t send out a few pages as that would tell you nothing. But as you can see with links (here and here) provided I go the extra mile to describe.

Q: I have considered many times to buy your flagship program. I have read many of your books. My views on finance are shaped by the likes of popper, Hayek, Taleb, Kanheman etc. So I just want to know if any of your clients are in India whom I can talk to clear my apprehensions. Please help me to take the final step.
A: I recently improved the Flagship definition description here. Take a read. In terms of testimonials I do provide 80 pages, but I don’t send random client data out. If my clients give me nice words, I post them.

Q: I just finished “Trend Following” and I’ve been trading for 3 years and this book is exactly what I’ve been discovering the hard way on my own. I’d like to thank Mr. Covel for his insights. I’m interested in the Flagship Program but I’m also using [name]. I’m debating between [name] courses and the Flagship simply because [he] uses [name] so much that it really takes a lot of the excess programming logic out of it for me. I know [name] is COT/Cycle based but he has very specific entry/exit and trend following rules as well. In the FAQ it says, “All systems can be automated” I’m just curious how much excess work this requires on my end? I’m not great at code but I’ve already built multiple systems and I’m not afraid to get my hands dirty and put the hours in, but reinventing the wheel doesn’t sound fun. I’m just wondering how much help we get when going to build our own automated systems off of the statement. I’m also wondering what happens if I get stuck coding my system? Where do I turn? This is pretty much the deciding factor for me at this moment so I’m hoping you can shed a bit of light on this subject to aid my decision.
A: Read.

Q: I am one of the many followers of your work. I will begin by saying “I am going to become a Trend Following Trader” and I want your help in doing so. I have read your books and I am convinced Trend Trading is by best opportunity to be a successful trader. I have listened to almost every podcast you’ve produced. I will be glad to answer any questions you may have about my background to help you help me determine if I am ready or to help me get ready. I hope that makes sense.
A: First steps, here, here, here. Everyone starts there regardless of background.

Q: Assuming that I decide to quit my day job “working for the man” and become a trader, how do I get access to the markets? How do I do research? Do I need to have access to real-time and historical data?
A: You will need a broker and you will need market data (not real time). I help understand on both issues with recommendations.

Q: Michael would probably crush me for asking this, but I’ll ask it anyway: Is trend following a full time job? It is a big commitment and I’d like to know if it can be done part time?
A: You can be part-time. 100%. You will not be day trading. You can trade using daily or weekly closing prices. No other strategy allows this.

Q: The podcasts are very educational. I have only listened to about 80 of them and while I enjoy them enormously, they mostly dive into the human nature. I didn’t hear much about the specifics on trends in the markets. Do I need to buy Michael’s entire system to be able to understand the trends?
A: I give away a ton of free resources, but if you want to go fast and take advantage of my best work my Flagship is the best bet.

Q: Michael, you’ve opened my eyes to the world of trend following, thank you. Your books are fantastic, podcast informative, and I can only imagine that your trend following system will be inline with your other products. I’m writing to find out if your system might be the catalyst for my financial planning practice. I’m 27 and for the last two years I’ve been working with a large financial institution as a financial advisor. I sell my companies products and I repackage their investment process (predominately fundamental) for my clients. But I think I can do better. I’ve always toyed with the idea of going independent (becoming an RIA instead of an IAR) but I’m not confident in the systematic trading that I’ve built on my back-testing program. Would your system provide a solid foundation so I can bring my customers trend following? I’d probably heavily manipulate whatever you provide, and I need to be sure that I can bring this down to the retail investor. For example, What’s the smallest account the system can handle?
A: Read.

Q: I should really introduce myself properly. I was a CEO and shareholder of an investment bank in the Middle East (I’m also a UK chartered accountant and a lawyer). I am now retired (53 not 73) and living in Singapore. I have made millions for myself trading FX but I use a sniper approach (don’t laugh). Very simply put I wait till price hits the most significant support and resistance areas (on weekly charts) and then just assume [the] probability is it will reverse direction. I then observe price action and divergences in the shorter time frames and swing the other way if it all stacks up. However, my positions are very large. Usually up to $15 million. The approach I use is obviously discretionary but I suppose I could try to code it (not sure how this could be done as the support and resistance lines are a visual check). I’m interested in your products because I have a 22-year-old son who wants to get into trading and investment full time and I want him to start his education with the right approach and the right people. You know very well there a lot of ‘useless’ trainers and systems out there in the market. Which brings to the subject of the ‘rules’. Are you providing the actual program codes?
A: Read.


You can read all of my FAQs here.

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