Blog

Subscribe to Trend Following Radio on iTunes

My guest today is Mark Rzepczynski. Prior to co-founding AMPHI, Mark was the CEO of the fund group at FourWinds Capital Mgmt. Mark was also President and CIO at John W. Henry & Co., an iconic Commodity Trading Advisor. Mark has headed fixed income research at Fidelity Management and Research, served as the senior economist for the CME, and as a finance professor at the University of Houston Baer School of Business.

The topics are Trading, Economics and Trend Following.

In this episode of Trend Following Radio we discuss:

• How to build a strong trading career
• How does inflation cause distortions
• Inflation in financial markets
• Leverage and portfolio management
• How the FED would protect the stock market
• VUCA: Volatility, Uncertainty, Complexity and Ambiguity
• Accuracy from a trend following perspective

Mentions & Resources:

• Mark Rzepczynski 
• Rudi Dornbusch
• Gerd Gigerenzer
• Gary Klein
• Paul Volcker

Listen to this episode:

• Listen to this podcast on iTunes. (Please leave a rating!)
• Listen on Spotify.
• Listen on Stitcher.
• Libysn RSS.
• Download as MP3 by right-clicking here and choosing “save as.”
• Free Video.

Jump in!

Feedback in:

Hello Michael, First of all, really nice video of yours! Concerning your “What is your biggest challenge you have faced with your Trading?”: What kind of diversification (how many markets and assets?) would be preferable to make a trend Following (TF) system work if you have little cash (let’s say $20 thousand US dollars) and operate in an Emerging Market (I live in Brazil)?

Best regards,
G.

First you need:

• Exact rules for selecting your tracking portfolio.
• Exact rules for entering your trades at the right time.
• Exact rules for exiting your trades with a loss.
• Exact rules for exiting your trades with a profit.
• Exact rules for how much money to bet on each trade.

Read also: www.trendfollowing.com/capital

And: www.trendfollowing.com/markets

---

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.

Feedback in:

Hello Michael, I just have a quick question for you. I understand trend following is ideal for longer term investments, but can it be scaled to use in short time frames suitable for day trading?

Andrew T.

Trend following is not day trading.

---

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.

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue A Share with Michael Covel on Trend Following Radio.

Listen to this episode:

• Listen to this podcast on iTunes. (Please leave a rating!)
• Listen on Spotify.
• Listen on Stitcher.
• Libysn RSS.
• Download as MP3 by right-clicking here and choosing “save as.”
• Free Video.

Want to learn more Trend Following? Watch my video here.

Feedback in:

Michael, Do you know of any good research or discussion / interviews about whether to trim or sell all? It seems the answer depends on 1) your conviction in your trend signal 2) willingness to look different and 3) desired level of protection. 100% long or 100% cash, up or down, buy or sell, makes sense to me. Across many assets, of course. Yes, whipsaws hurt a bit more that way, but so what. Trimming to say 50% seems chicken-shit and too concerned about career risk, looking different than the benchmark. Yes? Let’s say we break down the global stock market into 10 pieces. It doesn’t matter how, could use sectors, could use US/INTL, could use Growth/Value, whatever. But they all add up to “global stock market”, my bogey or benchmark. Then, for simplicity, let’s say they’re 10% each (they wouldn’t be, but.). Do we trade 0% to 10% in each one? 5% to 10% in each one? If ALL were in downtrends, could have 100% cash (so what, right?).

Thanks,
Chris R.

You need:

• Exact rules for selecting your tracking portfolio.
• Exact rules for entering your trades at the right time.
• Exact rules for exiting your trades with a loss.
• Exact rules for exiting your trades with a profit.
• Exact rules for how much money to bet on each trade.

That is a start to solving your issues. You will also need to get beyond stocks alone.

---

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.

Feedback in:

To answer your question, my biggest challenge is to find the bottom of the current bear market.

Regards,
Tamas

No one has that ability. Trend following doesn’t do that.

---

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.

Feedback in:

I’m just finishing up reading the 2017 edition of Trend Following and it occurs to me there may be other mathematical models for trends. Suppose price were not modeled as a statistically random variable but instead as some sort of mechanical vibration. Perhaps the nature of trading is such that price vibration or noise could be modeled by a sine wave with appropriate parameters for different markets. I was thinking a trend would be recognized when the price movement over a given number of time periods exceeded the previous price plus the sign wave value. Perhaps the price could also be required to exceed an expected return plus inflation to meet the definition of a trend. P(t1) >= abs[ P(t0) (1 + x sin(t0) + expected rate of return per time period + rate of inflation per time period)]. Price could be given a speed equal to rate of change per time period and a momentum equal to volume of trading or contracts outstanding times speed. There are also mathematical models from communications theory for signal to noise ratio which might be useful. Modeling price as a mechanical system should enable trends to be analyzed with differential calculus which could be enlightening and rewarding. Perhaps these ideas have been considered already. I have only read the one book. I didn’t see a mechanical modeling approach mentioned. I enjoyed the book. During the 1970’s and 80’s I sat at a desk writing computer programs to do calculations. Applications ranged from management systems to design and analysis of experiments in agriculture. I played with investing formulae on weekends. The experiences of contemporaries described in the book brought back fond memories. Thank you.

Watt

Why do you want to make it more complicated than price alone?

---

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.