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Trading A System: The Thinking Behind Success

Posted on by Michael Covel

Feedback in:

Dear Michael,

I’ve been a long time follower of you and as a huge fan and enthusiast of your work, I HAD to write you to express my sincere gratitude regarding your coverage on the subject of trend following. Your knowledge and breath about the topic is not only refreshing, but incredibly insightful as I grapple a working investment strategy of my own.

I continue to listen to your podcasts and read your books. I was wondering if you could perhaps do a podcast on how one creates a ‘system’? Could you go into detail about how to create a model, what metrics or analytics one should use, look at, or consider? I would love to learn more about the anatomy of ‘the system’ and the psychology and decision-making behind placing trades.

I’m a novice financial guy, but am obsessed with learning and wanting to win. How cool would it be if there was another Richard Dennis type that decided to create a turtle trader-like experiment.

Best Wishes,
[Name]

I have discussed an assortment of topics across hundreds of podcast episodes (many that you raise), all for free. My books? Examples like your desires across them. Much detail. However, for those clients that want even more personal support my products online (Go) are an option. Thanks for your interest and great feedback!

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. 273: Rande Howell Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Rande Howell
Rande Howell

My guest today is Rande Howell. Howell has a therapeutic background combined with personal coaching in the fields of human potential and leadership. He has fifteen years of practice as a licensed professional counselor with a Masters in Counseling.

The topic is counseling.

In this episode of Trend Following Radio we discuss:

  • What the performance mind is in regards to trading
  • Trading, emotions, and uncertainty
  • Why irrational pessimism is deadly in trading
  • Emotional regulation and mastering emotions
  • The blurry line between the casino and trading, particularly in Asia
  • Euphoria vs. fear in a trading context
  • Why what you’re afraid of owns you
  • Jungian archetypes
  • The Myers-Briggs instrument
  • Biological threat vs. psychological discomfort
  • The mistake of using trading to measure your worth
  • Getting your emotions right but your strategy wrong
  • Why success in one endeavor doesn’t necessarily mean success in trading
  • The importance of patience
  • The panther vs. the African lion

Listen to this episode:

Jump in!

Know Thy Risk Factors

Posted on by Michael Covel

Sandy Brasher turned me onto a piece by Harry Long. Some of his article is off target, and a clear misunderstanding of trend following (“The most popular trend following system is the Golden Cross/Death Cross”), but his passage I liked to some degree (it’s not complete):

When examined in this light, it is not actually statistically interesting to determine if trend following is a holy grail. It is statistically interesting to understand that by engaging in trend following vs. buy-and-hold, one is quite literally exchanging one set of risks for another. Strategies are not about trading assets — they are about trading risk factors. And it appears that buy-and-hold risk factors are more widely held in portfolios than trend following risk factors. Markets have cruel methods for correcting such imbalances.

The key: what are those risk factors? That’s what is not complete.

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.

S&P 500 Trading System

Posted on by Michael Covel

Feedback in:

Hi Michael…

Thank you for your comments on the S&P500 in podcast 271. Very good insight into the nature of the index and how it is used (or misused). As one of your guests said, buying and holding is like getting in a car with no brakes. I quote that to my clients frequently. When clients ask me what I think the market is going to do I always reply: “I have no clue what the market is going to do. But I know exactly what we are going to do in response to whatever the market does and that will make all the difference.” Once a client asked me, “Doesn’t the market just always go up?” I replied “Yes, the market always goes up. Sometimes.” This summer I made some road trips with my wife and daughter and I listened to about 2 dozen of the podcasts in the car. I am pleased that my 13-year old daughter got to absorb wisdom from the likes of Walter Williams and others. Your podcasts are a priceless gift to investors. An important benefit that I receive from them is confirmation that I am on the right track. Being a trend follower in a world brainwashed by Modern Portfolio Theory can be lonely. I have attached the first 20 months performance report from trading the S&P leveraged index funds using a trend following strategy.

Thanks for all you do.
[Name]

You are welcome.

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. 272: The Health and Longevity Episode with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Dan Buettner and John Ratey
Dan Buettner and John Ratey

Please enjoy my monologue The Health and Longevity Episode with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

Listen to this episode:

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

Ep. 271: The S&P 500 Trading System with Michael Covel on Trend Following Radio

Posted on by Michael Covel
The S&P 500 Trading System with Michael Covel on Trend Following Radio
The S&P 500 Trading System with Michael Covel on Trend Following Radio

Please enjoy my monologue The S&P 500 Trading System with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

Listen to this episode:

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

Play the Trend Following Game

Posted on by Michael Covel

Trend following trading is a game indeed, but it is terribly important to avoid becoming the game (a game I have explained in a multitude of ways). In general, think about the three types of players in any game:

• Those who know they are in the game.
• Those who do not know they are in the game.
• Those who do not know they are in the game and have become the game.

Within a half hour of playing any game, if you do not know the patsy, you are it. Said another way: You are the game. That is serious talk for the serious game of your financial health and wealth.

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.