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Category: Black Swan Thinking

If You Can’t Write It Down… How Can You Trade It?

Posted on by Michael Covel

A great line from one of the oldest running trend followers:

“I’m very uncomfortable with black box trading where I’m dealing with algorithms I don’t understand. Everything we do we could do on the back of an envelope with a pencil.”

That “back of an envelope” remark must be a revelation for those people that imagine trading to be wildly complex. The real lesson here is the discipline to stick with rules during tough times.

Write It Down
Write It Down

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. 440: My Sins My Own with Michael Covel on Trend Following Radio

Posted on by Michael Covel
My Sins My Own with Michael Covel on Trend Following Radio
My Sins My Own with Michael Covel on Trend Following Radio

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue My Sins My Own 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:

  • Process vs. outcome
  • Sports and trading analogies
  • Statistical thinking

“Think through all the possibilities, know the probabilities and be ready.” – Michael Covel

“Progress was not in the result, the progress was in the poise.” – Brad Stevens

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

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Ep. 388: Logic Over Faith with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Logic Over Faith with Michael Covel on Trend Following Radio
Logic Over Faith with Michael Covel on Trend Following Radio

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue Logic Over Faith 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:

  • Logic over faith
  • Financial advisors: there to give mutual fund advice
  • Adapting your strategy
  • How quitting can keep you in the game
  • Forcing yourself to make decisions
  • Risk and reward

“What I say is, at what price? If low interest rates were just that simple of a panacea, we would never have recessions. We would never have these crises, we would never have these panics.” – Carl Icahn

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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.

Ep. 387: Gabriel Weinberg Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Gabriel Weinberg
Gabriel Weinberg

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My guest today is Gabriel Weinberg, the CEO and Founder of DuckDuckGo, a search engine. What sets DuckDuckGo apart from other search engines is the privacy that it guarantees its users. DuckDuckGo promises to never track a user’s clicks, or use previous searchers to aid current results. Since creating it 11 years ago, his engine has reached 30 million searches a day in 2018, up 50% from a year before, and is poised to grow even faster since Google added DuckDuckGo as a default search-engine option in its latest Chrome browser in more than 60 markets in March 2019.

The topic is startup entrepreneur.

In this episode of Trend Following Radio we discuss:

  • Reaching your goal, then setting another
  • Resilience: vital to the entrepreneur
  • Committing to your idea
  • Psychology: the main barrier to success
  • Understanding that it’s okay to fail
  • Enjoy the challenge – or go do something else

“And so if you think of your initial product as a leaky bucket – you know, you pour in customers at the top and customers leak out of the bucket because your product’s not good yet…You need a steady stream of cold customers with fresh eyes to tell you where those leaks are, and if you don’t have that when you launch you’re still gonna have leaks more of the time than not.” – Gabriel Weinberg

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The Annie Duke Episode: Poker and Trend Following

Posted on by Michael Covel

There are many correlations between trading and poker. Consider this excerpt from my best selling, Trend Following:

In the book Absolute Returns, Alexander Ineichen stresses that trading is a “game.” He sees no rules for the game except the constant of change, but more importantly, he reminds us that it is crucial to avoid becoming the “game.” There are three types of players in the game:

• Those who know they are in the game.
• Those who don’t know they are in the game.
• Those who don’t know they are in the game and have become the game.

If, within a half of an hour of playing poker (or trading for that matter), you don’t know who the patsy is, you’re the patsy, or as Ineichen calls it “the game.” I have introduced those traders who didn’t know they were in the game and therefore became the game in the big events of the Long Term Capital Management hedge fund implosion, the Barings Bank collapse, and the October 2008 market crash. I introduced those traders and investors who did not know they were in the game pursuing Holy Grails that never panned out. And I introduced trend followers who knew they were in a game and brought an edge to the table every time they played. If you know trading is a game and you want to be a part of it, these are stark choices.

—

Recently I had Annie Duke on my podcast. She is an author, entrepreneur and professional poker player. We discussed several ways in which the psychology of gambling overlaps with that of trading, investment and other aspects of business. The following is brief feedback from that interview:

Mike, loved, loved, loved the Annie Duke episode. My favorite one yet. GREAT STUFF! [Name]

Thanks! More on gaming and betting? Go.

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. 386: Expanding Your Thinking with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Expanding Your Thinking with Michael Covel on Trend Following Radio
Expanding Your Thinking with Michael Covel on Trend Following Radio

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue Expanding Your Thinking 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:

  • Why embracing uncertainty pays big
  • Trend following: it’s human nature
  • Losses: acceptable when you strategize to cover them
  • The sunk cost fallacy
  • Opening your mind to alternative ways of thinking
  • The mistake of blindly accepting the word of “authorities”

“I remind you there is a new kind of special occupation. I refuse to call it a discipline or a field of study. It’s called futurism. The notion here is that there is a way to study trends and know what the future holds. That would indeed be valuable if it were possible. But it isn’t possible. Futurists don’t know any more about the future than you or I. Read their magazines from a couple years ago and you’ll see an endless parade of error.” – Michael Crichton

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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.

Ep. 377: Annie Duke Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Annie Duke
Annie Duke

Subscribe to Trend Following Radio on iTunes

My guest today is Annie Duke, an author, corporate speaker, and consultant in the decision-making space. As a former professional poker player, Annie won more than $4 million in tournament poker before retiring from the game in 2012. Prior to becoming a professional player, Annie was awarded a National Science Foundation Fellowship to study Cognitive Psychology at the University of Pennsylvania. Annie is the co-founder of The Alliance for Decision Education, a non-profit whose mission is to improve lives by empowering students through decision skills education. She is also a member of the National Board of After-School All-Stars and the Board of Directors of the Franklin Institute.

The topic is trading and gambling.

In this episode of Trend Following Radio we discuss:

  • Focusing on the process instead of the outcome
  • Understanding that it’s about your return, not you winning percentage
  • Recognizing that in investing, consistency is unnatural
  • Thinking probabilistically
  • Maximizing your expectancy
  • Understanding that a loss doesn’t necessarily reflect bad thinking

“When you focus on outcome over process you actually reduce innovation in your company.” – Annie Duke

Mentions & Resources:

Listen to this episode:

Jump in!

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