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Please enjoy my monologue Integrity with Michael Covel on Trend Following Radio.
In the early 20th century, there was a man who understood the danger of “noise” better than anyone alive today. His name was Jesse Livermore.
By 1929, he had amassed a fortune of $100 million. In today’s dollars, that is roughly $1.5 billion. He did it by shorting the market right before the Great Depression, while the rest of the country was blindly buying.
But it is not what he traded that matters. It is how he traded.
Livermore did not work on a bustling trading floor. He did not host strategy meetings. He did not gossip with other brokers at the lunch club.
He rented a secret office on Fifth Avenue. It was a fortress of isolation.
There was no name on the door. He had a private elevator. He employed a massive bodyguard to sit outside and ensure that absolutely no one could enter.
Inside the office, there was silence. There was no news. There were no newspapers. There was only a massive chalkboard and a stock ticker tape.
One day, a friend managed to get through the security. He burst into the office, excited, shouting, “Jesse, I have a tip on Union Pacific! It’s going to the moon!”
Livermore didn’t say a word. He stood up, walked over to the telegraph machine that fed him the prices, and physically cut the wire.
He looked at his friend and said, “I have to play a lone hand.”
He knew that the moment he let another person’s opinion into his head, his edge was gone.
Collaboration is for Mediocrity
We are raised to believe that teamwork makes the dream work. In corporate jobs, in sports, and in school, collaboration is the key to success. In trading, collaboration is a disease.
When you seek the opinions of others, you are really seeking comfort. You are looking for a consensus to make you feel safe about a risky decision. But the market does not pay you for being safe. It pays you for being right when the consensus is wrong.
If you are in a Discord chat asking, “What do you guys think about Nvidia right now?” you are admitting that you do not have a system. You are crowdsourcing your conviction. The crowd is usually wrong. Therefore, by listening to them, you are importing their failure into your portfolio.
The Price of Admission is Loneliness
To catch a true outlier trend, the kind that turns a small account into a retirement fund, you have to sit through periods of extreme discomfort.
You have to hold a position when it pulls back and your brain screams “Sell!” You have to buy a breakout when the price looks “too high” and your friends say it’s a bubble.
You cannot do this if you are constantly plugged into the hive mind.
Extreme focus requires separation. You must separate yourself from the news cycle. You must separate yourself from the panic of the herd.
Livermore knew that the “ticker”, the price, told him everything he needed to know. The price includes all the news, all the fears, and all the hopes of the market. Anything else is just distraction.
The Modern “Wire”
You don’t have a telegraph wire in your office. You have something much worse.
You have a smartphone.
Every notification is a “tip” trying to break your focus. Every tweet from a macro-economist is a narrative trying to shake you out of a good trade.
Most traders today are addicts. They are addicted to the dopamine hit of information. They think that if they read one more article, they will find the secret.
The secret is that there is no secret information. There is only price action.
To level up, you need to replicate Livermore’s office. You might not be able to hire a bodyguard, but you can build a digital fortress.
Constructing Your Fortress
This is about subtraction, not addition.
Stop following 500 people on social media. Stop watching the pre-market shows. Stop reading the earnings reports.
Replace the noise with signal.
You have to play a lone hand.
Cut the wire. Trust the trend.
Michael Covel
P.S. Livermore killed himself. Study that too. You can have all the rules, but if your mind goes haywire, it’s all over.
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Excellent commentary. I read it several times.
N. Young
Welcome!
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Looks like a good website. May buy a book or two.
Brother, you remind me a great deal of Jeffrey Donovan’s character “Bottles,” from the movie “Shot Caller”.
I, on the other hand, resemble one of the Hanson brothers from the movie “Slapshot”.
Just discovering this whole market thing and have started making my donations to the financial institutions.
Simply glorious!
59 years old, and there’s a whole wide world out there.
May the spirits of Jessie Livermore and Hettie Greene watch after you!
Greetings from Miami chum, and get your butt over to Dulles (if you haven’t already,) and into Udvar Hazy and give my regards to the DO335. Excellence knows no national boundaries.
Proceed nobly.
Joseph M.
Thanks!
How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.
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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.
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Please enjoy my monologue Bubble Time with Michael Covel on Trend Following Radio.
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Dear Mr. Covel,
I hope this message finds you well.
I am a reader of Trend Following – Revised & Extended Fifth Edition, and I want to thank you for writing a book that fundamentally reshaped how I think about markets, risk, and decision-making. Your work helped me understand that successful trend following is not about prediction, but about discipline, rules, and long-term consistency.
I am currently in the process of building my own trend following strategy system, and I would greatly appreciate your perspective on a few questions.
First, from your experience, what are the most important components for an individual trader to focus on when constructing an effective trend following system? In particular, how should one balance simplicity versus robustness when designing rules for entries, exits, and risk management?
Second, I do not have a background in programming and do not write my own code. Recently, I have been using AI tools to help translate clear, rule-based trend following ideas into systematic strategies. In your view, is this a viable approach for a non-programmer, assuming the trader fully understands the logic, risk parameters, and limitations of the system? Or do you believe that deep coding knowledge is essential to developing and maintaining a reliable trend following process?
I fully understand that no tool or technology can replace discipline, proper position sizing, and the psychological strength required to follow a system through drawdowns. My goal is not to optimize or overfit, but to build a simple, testable, and repeatable process that I can execute consistently over the long term.
Thank you very much for your time and for your continued contribution to the trend following community. Your work has been both inspiring and grounding, and I truly appreciate the clarity you bring to this field.
Kind regards,
Xu Xiao
Thanks for the nice note. I address these issues in my training. That’s where you get my personal support. More details.
How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.
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Hi Michael,
The book with Tom Basso was very good.
But does the Elite book come from W.D. Gann?
Do you know the variable value from the micro start waves with the Gann angle to the total macro development time of the trend chaining waves? That is a very important point. Think about this point and you can make big money from 100 million US dollars.
Gann is garbage. Run!
How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.
Also jump in:
• Trend Following Podcast Guests
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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.
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Hi Michael,
Love your stuff. I’ve read your books and enjoy your podcast often. Keep it up, glad you are there. Plus I do like your interviewing style. Well done. Do you have anything with a smaller price tag than the full $3900 program?
Yes. Here.
How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.
Also jump in:
• Trend Following Podcast Guests
• Frequently Asked Questions
• Performance
• Research
• Markets to Trade
• Crisis Times
• Trading Technology
• About Us
Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.