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Ep. 246: David Ryan Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
David Ryan
David Ryan

My guest today is David Ryan. Ryan was famously first featured in Jack Schwager’s “Market Wizards” book. Ryan has been the U.S. Investing Champion for 3 times and also worked for William O’Neil. 

The topic is market wizards strategies.

In this episode of Trend Following Radio we discuss:

  • How Ryan got his start walking up to the front door of O’Neil’s offices
  • How Ryan would describe his approach to trading today
  • CAN SLIM trading, and buying the breakout vs. buying the dip
  • Enjoying trading without clients
  • Some good CAN SLIM winners in the past two to three years from Ryan’s perspective
  • Big picture-wise, the max loss that Ryan is willing to take on a position
  • The type of winning percentages that Ryan really sees
  • The uneasiness about the overall market system since the 2008 financial crisis and how Ryan looks at how the situation has unfolded
  • High frequency trading
  • How the market can be humbling; and getting your ego out of the market

Listen to this episode:

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David Ryan

The “System” Wants You to Believe in “Security”; Run from Any Man That Promises Such

Posted on by Michael Covel

Consider:

It must be obvious, from the start, that there is a contradiction in wanting to be perfectly secure in a universe whose very nature is momentariness and fluidity. But the contradiction lies a little deeper than the mere conflict between the desire for security and the fact of change. If I want to be secure, that is, protected from the flux of life, I am wanting to be separate from life. Yet it is this very sense of separateness which makes me feel insecure. To be secure means to isolate and fortify the “I,” but it is just the feeling of being an isolated “I” which makes me feel lonely and afraid. In other words, the more security I can get, the more I shall want. To put it still more plainly: the desire for security and the feeling of insecurity are the same thing.

Want security in your investments? That’s what you crave? That’s your number one goal?

Hint: You will never get there.

Accept that the desire for security and the feeling of insecurity are the same thing, and you are on your way to making some money. Start here.

Source: Watts, Alan W. (2011-11-16). The Wisdom of Insecurity (Vintage) (pp. 77-78).

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.

5 Minute Bar or Weekly Bar: The Same Thing! Not Exactly the Same

Posted on by Michael Covel

Consider as a foundation to this post:

“The window on analysis is shrinking. People are moving so fast now that they don’t have time to think. They’re scanning, swiping, clicking, liking, tweeting and moving on at full velocity. They’re making decisions based on feelings, not facts. They are often choosing not because of what they think, but because of how something makes them feel.”

So, I was having a conversation with a guy online. A video out there had made the declarative statement that good trading was about switching between time frames: 5 minute bar to weekly bar to whatever. The video implied it’s all about switching. I said to this guy: “It sounds plausible to switch from 5 minute to weekly bar?” He offered:

Let’s say my trading approach is to trade when a particular technical pattern appears. Is it not plausible that I might look on a number of timescales to find instances of that pattern (either manually or getting a computer to do the spade work)?…However, personally I don’t think that published stats are the be all and end all [made in response to my call for empirical data]. For example, if someone who seems plausible tells me that they have traded the (say) the five minute chart using a particular method and made a profit over thousands of trades, I regard that as evidence. Also, I’m more interested in the theoretical underpinnings of a methodology than the empirical evidence, given that markets change and are designed to remove edges over time.

Try to make a system out of those feelings. Try to code those feelings. This inane interchange brought to mind a great line from Graham Greene’s The Quiet American:

“He was impregnably armored by his good intentions and his ignorance.”

Indeed. A failure to communicate:

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
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• Performance
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• Markets to Trade
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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. 245: Jerry Parker Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Jerry Parker
Jerry Parker

My guest today is Jerry Parker, an original Turtle, trained by Richard Dennis. However, since then he has very successfully run a managed money firm called Chesapeake Capital.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • Mean reversion trading
  • What the definition of momentum trading is compared to trend following
  • Why “good enough” is more rigorous than any metric
  • How the intervention of the Fed has broken up trends and made volatility drop in markets
  • How the idea of uncertainty and talking in probabilities makes people uncomfortable
  • The difference between managed futures and trend following
  • Why buy and hold is predicated on trust of the Fed
  • Why trend followers don’t look to “beat” the market

Listen to this episode:

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jerry parker chesapeake capital

Paraphrasing Richard Feynman on “Price” Importance

Posted on by Michael Covel

Trend followers trade the “price”. It’s the number that can’t be faked, the real indicator of the past, now and the future. Richard P. Feynman adds:

“You can know the name of a bird in all the languages of the world [think of all those so-called market fundamentals], but when you’re finished, you’ll know absolutely nothing whatever about the bird…So let’s look at the bird and see what it’s doing — that’s what counts.”

What is the market doing right now? That’s what counts. The price.

richard feynman

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.

Trend Following 101: “When You Are Caught in A Strong current, It Is Fatal to Resist”

Posted on by Michael Covel

Consider:

If, when swimming, you are caught in a strong current, it is fatal to resist. You must swim with it and gradually edge to the side. One who falls from a height with stiff limbs will break them, but if he relaxes like a cat he will fall safely. A building without “give” in its structure will easily collapse in storm or earthquake, and a car without the cushioning of tires and springs will soon come apart on the road. The mind has just the same powers, for it has give and can absorb shocks like water or a cushion. But this giving way to an opposing force is not at all the same thing as running away. A body of water does not run away when you push it; it simply gives at the point of the push and encloses your hand. A shock absorber does not fall down like a bowling-pin when struck; it gives, and yet stays in the same place.

Trend following philosophy 101.

Source: Alan Watts.

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.

Give Me the Data; Don’t Whine

Posted on by Michael Covel

You have a trading strategy that works? Prove it. Give me the empirical data. Or you can go this direction:

When people see something they love is under threat, their first reaction is to build an “impenetrable” wall, a Maginot Line–and just to be extra safe they decide to enclose a bit more territory, a buffer zone, inside its fortifications. It seems like a good, prudent idea. It seems to protect us from the awful slippery slope, the insidious thin edge of the wedge, and as everyone knows, if you give them an inch, they’ll take a mile. Dig the moat! Build the wall! And as far out as you can afford. But this policy typically burdens the defenders with a brittle, extravagant (implausible, indefensible) set of dogmas that cannot be defended rationally–and hence must be defended, in the end, with desperate clawing and shouting.

Start with the data. Then clawing and shouting go away.

connectome

Source: Dennett, Daniel C. (2013-05-06). Intuition Pumps And Other Tools for Thinking (p. 204). W. W. Norton & Company. Kindle Edition.

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.