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“Why has the turtle trend-following system stop working?”

A recent chat thread about “Why has the turtle trend-following system stop working?” [not accurate headline]:

Forum guest: The drawdowns are horrendous for long term trend following systems. Don’t go near them!

Covel: Chris Clarke has good insight on this podcast ep. for those that scream “drawdown” when discussing trend following.

Also, drawdown goes far beyond trend following. Consider an excerpt from PragCap:

Another way to illustrate this is if you look at something like Berkshire Hathaway. BRK has gone down 50% three times in the past (or maybe more). Once in the early 1970′s, once in 1999 and then again during the recent crisis. Of all the investors who owned BRK in 1970, how many have done better than the 20% or so return of the stock over the years by getting in and out of it in order to avoid the 50% drawdowns?

Big returns over time come with big drawdowns. Buffett has also said himself:

“Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.”

No wisdom there (heavy sarcasm).


My thoughts on Michael J clark of Clark Capital Management, one of the Trend Following Legends.


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.

Ep. 372: Letting Your Systems Run with Michael Covel on Trend Following Radio

Letting Your Systems Run with Michael Covel on Trend Following Radio
Letting Your Systems Run with Michael Covel on Trend Following Radio

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue Letting Your Systems Run with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

In this episode of Trend Following Radio:

  • The importance of practice and persistence in trading
  • Finding trends mathematically
  • The importance of not overriding systems
  • Being prepared for drawdowns
  • Looking at the S&P 500 as a trading system
  • Dispelling the myths of the mainstream financial world

“One of the biggest mistakes investors make is they always look up at the stars and think about how much money they’re going to make, they don’t look down first” – Kevin Bruce

Mentions & Resources:

Listen to this episode:

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

Get the foundation to making money in up, down and *surprise markets on the Trend Following mailing list.

Take Responsibility: “Man in the Mirror”

Feedback in:

Hey Michael,

Heard Michael Jackson’s “Man in the Mirror” song this morning after listening to Taylor Pearson’s 368 podcast (which was great). Anyway, I thought this was an appropriate song for a future podcast about the change a person needs to undertake to become an entrepreneur and/or start trading using a TF approach.

Hope you are well!
[Name]

Thanks Jim!


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.

Great Content, Boring Interview!

Feedback in:

Hi Michael,

Love your podcast, but the [Name] interview was excruciatingly painful to sit through. He might be a great research guy, but watching paint dry is more satisfying than listening to him talk. Just my opinion, but he should stick to his investing and stay away from PR.

Just read your TurtleTrader book. Enjoyed!

Thanks,
[Name]

Thanks. Some brilliant guys can’t say it all so eloquently. I say – so what!


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.

Job Seekers: Read Seth Godin’s Linchpin

Feedback in:

Mr. Covel,

First let me just acknowledge I know you instructed me to do more than just email you regarding a research assistant job that requires relocation to Asia and I fully intend to pursue other contact avenues, but I wanted to put something down as a primer for you as I pursue you via phone, etc. I’m also aware that you mentioned this in a podcast from February of 2014, but I’m still so struck with the opportunity and your books that I had to write and hope a position of some kind is still available or something can be worked out between us if you feel I’m a fit.

My background: I’ve been a big fan of your work since reading The Little Book of Trading last summer. I came to find you from watching a [name] DVD of a seminar you spoke at and while I almost immediately dropped [other style], I pursued trend following education immediately. I looked into Ed Seykota’s trading tribe and you’re right. I felt like Yoda was talking at a level far beyond mere markets, but it was something David Harding said about having come up in the business by spending hours hand charting that set me to work drawing market after market and time frame after time frame. This has been a huge help. I’ve since read all of your books and the independent thinker in me is totally taken with the approach. I agree with your opinion about the future state of our workforce being arbitraged away by the internet and technology and I’m doing everything under my power to educate myself.

I would be completely exhilarated to work with you on this research project and also excited to relocate to Asia. I’ve spent the last three and a half years living in NYC, studying market s all day, hand charting and reading everything I can. Previous to this I worked in the entertainment business as I Creative Executive for a film director (hugely research intensive) as well as a writer. Then I got hooked on markets. I took the route with [firm name], spending a lot of money and again, trying to be a daytrader as I erroneously assumed this was the way to riches. I read all the standard books and tried method after method. I was hooked because I’ve always been an individualist and I wanted to carve out my future through my own sweat. I’m now finally cured of this daytrading fever, and the Managed Futures/Quant/Macro Funds are my model of ideal approach to trading, thanks to your work.

Incidentally, I’ve been looking often on over the last six months to find a way to relocate internationally and find something to do to support myself while studying markets, so the opportunity to work with the guy who has sat down with the best of the best and created his own ingenious niche in this business seems like fate. Do please consider me as a candidate, I’m hardworking, endlessly curious and ready for adventure. As I said, I will be pursuing you via phone and other avenues ASAP. Just for reference my cell phone is [#]. I look forward to talking.

Best regards,
[Name]

Thanks for your interest and the feedback.

Note: For everyone on the job pursuit path consider 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.

Ep. 371: Alexander Ineichen Interview with Michael Covel on Trend Following Radio

Alexander Ineichen
Alexander Ineichen

Subscribe to Trend Following Radio on iTunes

My guest today is Alexander Ineichen, the founder of Ineichen Research and Management AG, an independent research firm established in October 2009 focusing on investment themes related to nowcasting and risk management. Alexander started his financial career in derivatives brokerage and origination of risk management products at Swiss Bank Corporation in 1988.

The topics are his books Absolute Returns: The Risk and Opportunities of Hedge Fund Investing and Asymmetric Returns: The Future of Active Asset Management.

In this episode of Trend Following Radio we discuss:

  • Seeing through the market forecasting flash
  • The importance of “check box” methodology
  • Simplification as sophistication
  • The concept of nowcasting
  • Understanding the whole, so you know what can be eliminated
  • Learning to watch for trend reversals

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” – George Soros

Mentions & Resources:

Listen to this episode:

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Get the foundation to making money in up, down and *surprise markets on the Trend Following mailing list.

Trend Following Weekly Moving Averages

Reader: I saw the documentary you posted on Twitter regarding fractals and I am extremely happy to see that you studied the source. There are very rare people that do that. I tested some systems based on weekly moving averages/breakouts in futures markets. The results are very good, but one has to wait the whole week & it requires tremendous patience. What say regarding weekly strategies in futures markets?

Covel: Weekly. Yes! Many top pros do so too. Were you looking for a quick confirm?

Reader: Yes, because I used to trade daily time frames. Never thought of weekly. Now when I tested I found it to be smooth. Although there are sometimes only 4-5 trades a year. Also, in some stock futures I backtested and found the results slightly negative over 10 years. But in combination of overall portfolio it was greatly positive. Also, I think that the majority will not think of weekly time frames while trading futures in this High Frequency world of today.

Covel: I agree. Many agree. It works. Has for decades. Patience is an issue for any strategy.


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.