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Please enjoy my monologue A Plan for an Uncertain World with Michael Covel on Trend Following. This episode may also include great outside guests from my archive.
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Thanks so much, Michael!
My biggest challenge with trading has evolved over time. When I first started trading currency four years ago, it was that I had no guidance, no feedback on what I was doing, and whether I was even on the right track. So I traded for a year and then stopped for a year, while I searched for training/coaching programs that didn’t cost tens of thousands of dollars. I eventually found Rolf and Moritz of Tradeciety, which offered courses on the swing and day trading, weekly watchlist videos and a forum where you could get regular feedback on your trades. Lifetime access was only several hundred dollars–a remarkable value. Within a few months, my trading started taking off, at which point my biggest challenge became guarding my time and energy and staying focused on a few goals. Because trading was going well, and several other things were going well, I kept on piling on more and more life-goals for myself until I finally hit a wall and all my motivation seemed to evaporate. Not long after this, my mother had a stroke and the next 6 months were taken up with me and my siblings looking after her and making sure she got the best care possible. I learned a lot of unsettling things about how overworked nursing home professionals are, and how easy it is for patients’ needs to be overlooked, and for family members to be very confused about what is actually supposed to be happening. Eventually, my mother had a second stroke and we brought her home to hospice care and spent 8 days taking shifts sitting with her around the clock. Remarkably, she lived for 77 years, 7 months and 7 days.
During and after that season, I spent another 18 months away from trading before I was ready to get back. This past summer, I took a few months to go back through the now updated coursework and began trading again, with the help of a ton of feedback from Rolf and Moritz. At this point, my biggest challenge was being selective and consistent. I was advised to stick to just one pattern–head and shoulder reversals–and learn it until it became second nature. It is surprising how many little variations there can be on a pattern, and how many clarifying decisions you need to make so that your rules about what will constitute a tradeable head and shoulders are “enough”. However, I was getting there, and while during the end of 2019, my trading was all over the place, by the end of January 2020, I was in a total net profit, and getting wonderful feedback from Rolf and Moritz about how far my trading had come, and how consistent my trades were looking.
By February 2020, however, as the Coronavirus became more and more of a concern, the usual mean-reverting setups I would look for and take on currency pairs began to unravel. It started with a string of losses, as typically valid setups I traded were triggered but then reversed and went the other direction, taking out my stop loss. Not long after that, there simply weren’t any valid setups to trade, as the market whipsawed all over the place, or, in many cases, currency pairs just kept on trending and trending and trending with no reversal in sight. So my biggest challenge now was, what to do when the market is in such a volatile phase, and the setups I typically look for simply don’t occur, or at least not with much confidence of follow-through.
I watched as the major indices trended strongly downward, reversing months or years of gain, and realizing that this could have been a MAJOR cash-in opportunity, where I set up for a trend following. I started listening to your Complete Turtle Trader book and decided to get myself set up with a futures account. However, just as with forex trading, I was now in completely uncharted waters again, not even yet understanding how futures markets work, how to navigate contract rollovers, etc., and not having anyone to guide me in the nuances of how one actually engages with trend following in a consistent manner than can deliver. There is so much on the charts that look obvious in hindsight, but when you start trying to work up different scenarios for how you might have walked through that and profited from a trend without getting prematurely stopped out (and then try to apply that to other trends) it quickly becomes clear that this is not at all as easy as it looks.
So with regards to my biggest challenge, that brings me full circle back to where I was several years ago with swing trading: I have ZERO guidance on what I want to be doing and little way of knowing whether I am on the right track or not.
Thanks for reading, and to paraphrase Mark Twain (or was it Blaise Pascal, or Ben Franklin?), I’m sorry for writing such a long email, as I did not have time to write a shorter one.
I look forward to checking out the intro video you sent!
Michael
Swing trading. Day trading. Stop.
An alternative.
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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Hi Michael
I’m a fairly new trader and I feel there’s information overload when it comes to trading and it’s hard to know where to start and begin. I’m nearly 60 but I have a desire to learn to trade profitably.
Every book I read on trading or TA gives you chart reading skills and some money management strategies and they tell you to design your own ‘trading plan’ which is great but what I really need is a ‘trading plan’ that is already developed as there are too many factors that I wouldn’t know how to put together myself with limited experience.
I have purchased your book on the ‘Turtle trend following system’, I’m still waiting for delivery but I’m hopeful that this will have a trading plan written out that I could follow?
After I read it I intend to buy your ‘Trend Following’ book to further my education.
I’m far from lazy or wanting to be spoon-fed but I just can’t seem to be able to write a trading plan that I would feel comfortable following.Perhaps later I might consider doing your ‘turtle’ course but unfortunately, it’s beyond my financial capabilities at the moment and being from Australia our dollar is rubbish and it would cost me nearly double what it costs in the US.
The other thing that I feel is difficult for me is finding out how to sell short and how to trade the different markets such as commodities, futures, different indexes, etc on leverage as I haven’t done that before. I will soon trade my own Super Fund (401k) I think it’s called in the states and I’m told that I must use Saxo brokerage for international shares and probably futures and commodities, is there any advice or tips about how I can learn to trade instruments other than equities, please?
Many thanks for your help
Kind Regards
Peter
Yes. My website, books, and podcast are filled with info.
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.
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Hi Michael,
I am trying to learn to day trade Amazon stock. My greatest challenge is to get on the right trend and get off it if it does not prove good.
Merwan
That sounds like a plan to go broke. Another view.
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.
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Hey Michael,
I am reading your book, in Chapter 5 about the rules.
I am ignorant when it comes to trading and I want to learn. I am a software developer/entrepreneur and want to merge the two. Technology and a scientific approach to trading.
Thanks,
Tom S.
Two links to my world:
www.trendfollowing.com/faqs
www.trendfollowing.com/software
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:
Hi Michael
I just want to reach out to you and say thanks for both your books which I own: Turtle trader and of course Trend Following.
As a result of your books (I manage both my boy’s education stock accounts and our own), I was completely out of the market in January. I am sitting in cash watching this blood bath right now. When the trend turns I will buy back in thanks again and I love your podcast and also discovered Ed Seykota through you and I love his website
Regards
Jason
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.
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:
Hi Michael,
I have found certain strengths and weaknesses at one level as I keep trading. When I say one level, I mean there are different layers of truth as we deep dive into anything. I am sure over the years there’s bound to be some more revelations.
Let’s say I take a position in futures or options, based on my assessment of market weaknesses (or strengths) and which phase of the main trend or corrective trend the market has been in. The biggest challenge so far has been the ‘when’ factor. I expect a reversal and take a position, but the reversal doesn’t happen at our whims and fancies but says it happens later. They say the markets can be irrational longer than one can remain solvent. In hindsight, you could say that I took the position based on expectations before the market ‘confirmed’ it. More often than not have been good at predicting the phase and direction but the when the factor has been tough to master.
I hope I made myself clear.
Regards
Y.
You need a system. Too much guessing in your write-up.
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.