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“What is your biggest challenge you have faced with your Trading? Inconsistency…”

Posted on by Michael Covel

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Inconsistency.

I have been juggling my 9-5 that stresses me TF out, literally want to rip my hair out. I feel exhausted at the end of the day to even think of watching trading videos and skilling up to execute on trades. I always find myself binging Netflix because it’s mindless and does not require too much energy except deciding on whether I want to binge a series (bad idea) or get a quick movie in. I do feel guilty for doing it because I have this feeling that “I have to be productive” so I can leave my day job but it’s challenging and something I am trying to work on.

Alvin

Go read something like Think and Grow Rich.

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“As a portfolio manager for a small start up hedge fund who follows a classical trend trading strategy…”

Posted on by Michael Covel

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Hi Michael,

Thank you for personally taking the time to respond to questions people send you!

As a portfolio manager for a small start up hedge fund who follows a classical trend trading strategy, one thing I am constantly at odds with is matching the trend followers approach to meet investor expectations.

Our business model requires us to crystallize p&l on a monthly basis, the better returns we have the more investment capital we are able to onboard as a generally rule of thumb. Investors like to see consistent returns.

Thus closing out positions in effort to post positive results and adding to them again in effect adds to risk, I am sometimes at odds with myself in deciding when to open and close positions because of this as I would prefer keeping the advantage of having a trade in profit following the rules of classical trend following. Any suggestions as we know it makes sense to hold longer?

Also, brokerage suggestions would be fantastic that are better for trend following, current broker swap fees really add up on the 3-4 month holds.

Cheers,
Name

You need to arbitrarily close positions at the end of the month?

That’s not trend following.

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.

Ep. 968: Robert Cialdini Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Robert Cialdini
Robert Cialdini

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My guest today is Dr. Robert Cialdini, an award-winning behavioral scientist and author. He is the president and CEO of Influence at Work, focusing on live and virtual keynotes, streaming and online corporate training. He is a three-time New York Times bestselling author, with more than 5 million copies sold throughout the world. He is frequently referred to as the “Godfather of Influence.”

The topic is his book Influence, New and Expanded: The Psychology of Persuasion.

In this episode of Trend Following Radio we discuss:

  • Universal Principles of Influence and Persuasion
  • Social Psychology
  • Why Do People Say “Yes?”
  • Commitment and Consistency
  • Authority
  • COVID-19
  • Burnout Prevention
  • Ethical Influence
  • Scarcity Principle
  • Unity, The Newest Principle

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“My biggest challenge in the past several years is finding a trading strategy that is consistently profitable on a daily basis…”

Posted on by Michael Covel

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Hello Michael,

Thank you for the question. My biggest challenge in the past several years is finding a trading strategy that is consistently profitable on a daily basis. I have tried so many methodologies. While some have worked for a while until the market changes, I have yet to find a strategy that is consistently profitable in all kinds of markets. By the way, I heard you speak a few years ago in Las Vegas. I listen to your podcast & have listened to many of your audio books.

Consistently profitable on a daily basis?

How?

Who does this?

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.

Ep. 967: Tom Basso Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Tom Basso
Tom Basso

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My guest today is Tom Basso. He bought his first mutual fund at 12 from funds received from delivering newspapers. From those early days, covering over 50+ years, Tom has extensively traded stocks, bonds, options, commodities/futures and FOREX. Tom’s engineering background with a knowledge of math and computers helped him leverage his time and talents in managing portfolios over his 28 years career. Tom was one of several traders featured in Jack Schwager’s The New Market Wizards and dubbed “Mr. Serenity” by Jack.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • The New Market Wizards – Mr. Serenity
  • Engineering Mindset
  • Trend Following Mindset
  • Covid-19 Data
  • Trend Trading
  • Euphoria and Depression
  • ETR – Enjoy the Ride
  • US Government
  • Media and Government

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“I can’t even figure out what ‘Dollars per point’ means…”

Posted on by Michael Covel

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Michael,

Do I need to know that the authors back-testing the history of the potential success of trend following have their suspicions about the negative contributions of a strong mean-reversion on the prediction of large Sn values, or that they tried to model a non-linear saturation through a hyperbolic tangent, or can I accept that their research shows that their is great potential for making money by trend following.

Would it also be safe to assume that of the remaining ’turtles’ chosen by Richard DENNIS and Bill ECKHARDT, who succeeded in making serious money from trend trading, were NOT your average person, but were ‘savants’ in some way, shape or form; like Benjamin GRAHAM, Warren BUFFET, Jeff BEZOS, Elon MUSK, probably even Bill DUNN (I’m guessing mathematics). Yes, from their perspective, anyone can achieve what they’ve achieved, because they think they’re the ’normal’ person, the ‘average’ guy, when clearly they are not. They are the people that help create the average, else we’d all be at the far right of the normal distribution curve; if that’s statistically possible.

I can’t even figure out what ‘Dollars per point’ means; or how to calculate the Previous Day’s ’N’ (PDN) if you need to calculate the ’N’ in order to calculate the Previous Day’s ’N’.

How was the first ever value of ’N’ ever calculated if there was no PDN.

But, I’ll keep reading, nonetheless.

Regards,
M.

I would stop reading. With that attitude you have no chance.

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
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• 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.

“Putting a big stop loss on a volatile share ahead of trading update only for a disappointing update…”

Posted on by Michael Covel

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The mental aspect of dealing with silly losses is hard to get over…recent drop in bitcoin, 20% drop, I did not have a stop loss and despite getting out with a healthy 100% profit still hurts I could have kept that to 10%. I have only 12 months experience. Grown my portfolio from £17k to £44k in the 12 months steadily, profit is currently £2k (after fees). I was in the red after 6months and since have steadily turned a profit or broken even every month; came out of red in January 2021. I don’t day trade but are fairly active trader (5 – 10 trades in a month, UK and US); most holdings are 3 – 6 months; some held for last 12 months. Losses have come from mainly 5 trades and was in hindsight overweight on these, so losses were big hits. Not putting a stop loss when I thought I should but thought I could react without one. Only for the SP to drop sharply on bad news. Recent Tech stocks drops. I put a stop loss too tight and was taken out only for the SP to gain significantly shortly after. Putting a big stop loss (still at a profit level) on a volatile share ahead of trading update only for a disappointing update to cause the SP to gap below my stop loss and cause a loss (30% profit turned to 10% loss) the SP later in the same day recovered at what would had been a breakeven level; (should have hedged my bets and taken some profit ahead of news).

Enjoying your book, only started this last month to use trend trading principles.

Ricardo

What is your strategy?

My minimum goal is to grow my portfolio to £320k over 10years; adding on average from my fulltime job earnings £1k every month. I calculate that is about 8% compounded annual growth from where I am now. My aspiration is to make this a substantial added monthly income to support my retirement and not be always reliant on current 9-5 job. Strategy started as combination of value (companies hit by the pandemic) and growth (companies doing well from pandemic) largely based on media/news information and genral internet investment sites and magazines. I started passive (buy and hold) but in current volatile market that led to big losses pretty quickly on some stocks I should have sold. Last 6 months, my strategy is still a combination of value and growth but managed more active in terms of cutting losses and adding more stocks. My risk has generally been managed by keeping my initial position small; I tend to start with one of three amounts (£400 – £700 – £1000) depending on confidence level. That is perhaps something I need to change because working with small position means I can tolerate big percentage drops in any one stock without feeling I must sell but when I have multiple small positions these drops quickly add up. It also leads to perhaps too many stocks (over 70) to actively manage and cumulative risk is perhaps higher. I am considering reducing my number of stocks and increasing my positions but manage risk through the use of appropriate stop loss level keeping my risk to £150 per trade and aim for a risk/reward ratio. I started only this month looking at trend following and how I can incorporate the principle in my existing portfolio and going forward.

Ricardo

Why not stop all of that and go trend following?

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.