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Category: Feedback

My Journey to Self Discovery through Trend Following

Posted on by Michael Covel

It has been a long journey discovering trend following. Consider an excerpt from the preface of Trend Following:

Trend Following challenges much of the conventional wisdom about successful trading and traders. To avoid the influences of conventional wisdom, I was determined to avoid being influenced by institutionalized knowledge defined by Wall Street and was adamant about fighting “flat earth” thinking. During my research, starting with an assumption and then finding data to support it was avoided. Instead, questions were asked and then, objectively, doggedly, and slowly, answers were revealed.

If there was one factor that motivated me to work in this manner, it was simple curiosity. The more I uncovered about trend followers, the more I wanted to know. For example, one of the earliest questions (without an answer already) was learning who profited when Barings Bank collapsed. My research unearthed a connection between Barings Bank and trend follower John W. Henry (now the majority owner of the Boston Red Sox). Henry’s track record generated new questions, such as, “How did he discover trend following in the first place?” and “Has his approach changed in any significant way in the past 30 years?” Read more on John Henry Products.

Now for feedback in the same vein…

Hi Michael,

I am a trend following trader and entrepreneur based in Miami and Toronto. I have to tell you that you have become a mentor to me even though we haven’t met. You have helped give me the tools, conviction and confidence to believe in trend following and put it into practice. Admittedly it took me a long time to fight through the noise, particularly because I spent 10 years on an institutional equity desk in NY and Toronto. Ironically a traditional commission based institutional broker/investment bank is the absolute worst place to gain confidence as a trend following trader. The brokerage house is all about “the story” and predicting the future never even touching risk management, position sizing or exit strategies.

I first bought your TurtleTrader course around 2000 after devouring the website and wanting more, but I was 26 and on my way up the corporate ladder at Merrill Lynch. My ego always got in the way and I didn’t have enough quiet time to think and read and gain the confidence that is so critical. I also was still searching for the “holy grail” not knowing I’d already found it.

Years later I picked up my study of trend following again after rereading Reminiscences of a Stock Operator. I then read your books and then ordered your current course. I now turn to the podcasts when I want ideas refreshed or motivation and I look forward to hearing your interviews.

This message could not have asked for a better messenger Michael. You kick ass with your podcasts. You are honest and direct and even funny at times. I’ve even got my girlfriend to listen to a few. The episode with Vernon Smith was particularly powerful. Putting this out there for free is mind blowing and I’m very grateful to you for putting out such an incredible body of work. You are affecting people’s lives and I thank you for affecting mine.

Okay, enough smoke up your ass. Tim Ferriss should be on your podcast and/or you should be on his. In his most recent episode (63), he talks about his investing style toward the end and why he is scared to invest in public markets. He can’t deal with the ups and downs of staring at rising and falling equity so he only invests in startups. What struck me is that he is basically following a trend following risk model in his angel investing. He accepts that less than 50% will be winners and diversifies with the assumption that the winners will more than pay for the losers. Considering Tim’s expertise is in breaking down and mastering skills that have scientific and mathematical track records it seems to me that he would be interested in your work. I find it hard to imagine why anyone who wants to make money in the markets wouldn’t be interested in your work. Anyway, worth exploring even just as a reference in your own podcast.

My question is on constructing a model and automating a fairly basic trading system: is there a data feed you recommend and/or software that can generate signals with a data feed? Do you recommend any particular broker that is very reliable and execution based with competitive fees and an online platform?

Thank you very much
[Name]

After initial interchanges a few months later I heard from the listener again:

Your podcasts continue to be a wealth of education, entertainment and enlightenment and I can’t thank you enough. I don’t think people really appreciate the value you are providing. I have spent approx [number] (courses and books) on your products and I feel like there is more than that value in the podcasts alone and I get those for free. If you’re ever in Toronto or Miami (we split our time) let me know so I can buy you a drink

All the best
[Name]

Thanks!

Related Articles and Podcasts

On Trend Following Trading

Heard it a thousand times

Interview Alison Gopnik

Three times out of ten

Let Your Curiosity Lead the Way

Inspirational Podcasts

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.

Learning the Hard Way… But At Least Learning!

Posted on by Michael Covel

Brazilian feedback in:

Hello, Michael, My name is [Name], I’m Brazilian 51 years old, married for 22 years, and father of five children, two graduates, one studies power engineering and two still in school. At the beginning of my 20’s, I worked for a few years with computer programming. After this, I worked in real estate for several more years, then graduated in law and worked in the consulting business area for a decade. Finally, in the last five years I worked as a branch manager of the largest Brazilian company in the field of power generators. All my jobs could be considered very good (at last, I was earning an annual salary around US$60,000, far above the national average), but did not bring me real personal achievement.

For almost the last two years, I´ve been doing operations in the financial market of Brazil, parallel to my work in power generating company, especially in operations analyzed at night, at home, after my work schedule. I read the Brazilian edition of your book TREND FOLLOWING, earlier this year, almost without stopping! I found it wonderful, but I confess that I could not understand a good deal because I still understood very little about the market… Anyway, I found something in the book that somehow I sought in all my life. Excited by I found on your book, I read some other books and searched for articles and lessons on internet about the market, technical analysis, gold, options etc. But all I found seemed almost fake, systems and techniques that only one quantum physics expert could understand! I think a good system operations should have basic and easy to understand premises, related almost exclusively to the price of assets, and be composed primarily of clear parameters of investment allocation, entry criteria and exit points in case of negative results.

I left my job in the company of power generators four months ago, and my intention was to work exclusively with financial market operations. Although most of my operations made over time, including stocks, options and futures, have generated profit, losses in a few operations exceeded all gain I got.

I´m reading your book for the third time, and this time I can understand everything (I guess!), and it all makes sense. I now realize that I made the elementary mistake of wanting to win first and then learn how to win. I lost a lot of money in senseless operations, some made without the minimum knowledge required and, worst of all, without a risk management system with clear exit points, to limit my losses. I paid a high price, but I think I could learn some important things about the market in this time. I read in your book that Ed Seykota says that “everyone gets what he wants in the market”. Perhaps, what I needed was to know better and to test my strengths (logical-mathematical reasoning, systemic view, willingness to learn) and my weaknesses too (impulsive, lack of discipline, stubbornness).

I need to look for new job. (As I said before, I have five children, and three of them have not yet completed their studies!) I´m going to live with my son who is in the engineering college, in a small town, where the cost of living is much lower. I might study for a public job competition. I am still not sure what I’ll do. I spent almost all my savings [over US$ (number)] in this initial stage full of errors but also of valuable learning. Meanwhile, I´ll start again with the equivalent of just US$ (number). I can say that the challenge of learning how to operate successfully in the market became the biggest goal of my life.

Anyway, I want to thank you for all that your book gave me. Certainly, you did not write because you wanted to show how much you know, but because you want to share with others what you have learned. Thank you so much. Let me ask you not to forget me. I’ll have good news soon. Please, receive my most sincere thanks and cordial greetings,

[Name]
Brazil

Welcome!

Note: Many of my clients are Brazilian based.

Brazil Feedback
Brazil 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.

Jumping from Value Investing to Trend Following, How?

Posted on by Michael Covel

Feedback in:

Hi Michael,

I enjoy the podcasts. I certainly appreciate any tips for someone new in the trend following arena. Coming from a Ben Graham type investing style it is a bit different for me.

Thanks!
[Name]

Sure, start here. And 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.

“I am long overdue in thanking you…”

Posted on by Michael Covel

Feedback in:

Michael, Please forgive me but I am long overdue in thanking you for your fine work and ongoing efforts. (And I live and work in your former back yard no less). I have benefited greatly from your podcasts over the past 4 years or so, sometimes in unusual or un-obvious ways. I tried posting a review to iTunes a few times, but as an Intel/Windows user it didn’t work out so well. I apologize. I love your work with trend followers, hedge fund managers, tactical traders. Too many to mention, but here are a few I recall:

– Interviews with the early CTAs.

– “Dual Momentum” author Gary Antonacci who placed academic rigor behind a similar strategy I’ve developed for our clients over the years.

– Nigol Koulajian of Quest Partners. Through your podcast I researched him, have met at his offices in NYC, and now am deploying client assets to his AlphaQuest AQO strategy. (I am indebted to you for this connection, and so are my clients).

– Plus there have been a few non-sequiturs. The recent 1958 interview you pulled up (from God knows where) with Ayn Rand was crazy.

I never had heard this, really interesting to hear her speak directly. I couldn’t believe how opinionated and leading Mike Wallace was for a supposedly unbiased interviewer. Really displays the times, how thing have changed over the years (you wouldn’t know it from listening to the world-class interviewers at CNBC). Thanks again for your diligence and perseverance. You set a fine example.

I’ll keep listening!

[Name]

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.

How to Start? There Are Many Answers!

Posted on by Michael Covel

A recent email exchange:

Covel: I see you posted an empty comment on my podcast. Questions for me?

Listener: I just purchased your book and was attempting to subscribe to your podcast sorry for the confusion. But, while you’re available, I would love to ask you a few questions. I just finished my Master’s at Harvard and have been trading on average 2,050 equity derivatives contracts per month for 3 years. I am an affiliate member of the MTA and have passed the CMT level 1& 2 and will be taking the level 3 in October. I have my first phone interview with the [Name] Group tomorrow and am committed to a life-long pursuit of being the best trader I can be. Would you have any advice for me? Thank you for your time Mr. Covel

Covel: What’s your goal?

Note: The best that I can be is a mirror. Most everyone knows their answer already. Accepting the answer is the hard part. This particular dialogue next went down the path of employee v. entrepreneur… Tough choices!

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.

“He is so confident in his approach that he offers an extraordinary guarantee: you will never lose money.”

Posted on by Michael Covel
Run to the Hills
Run to the Hills

A listener sent this in:

You’re gonna love this guy. Ladies and gentlemen, the next Bernie Madoff! How Does This Hedge-Fund Manager Make So Much Money?

“Meyer guarantees clients will never lose money with his system.”

Say what?

Run for the hills!

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.

Bullshit Baffles Brains

Posted on by Michael Covel

An excerpt I love:

Bullshit baffles brains. It’s that simple. …When you talk bullshit, it’s like you’ve thrown a baseball at someone – it is up to them to consider what you’ve said, ie. to catch the ball. It is up to them to understand or respond what you’ve said. If your words are made up of some big meaningless words which take your audience time to understand, then you’ve achieved your goal. Most people, who do not want to appear foolish, will happily nod and agree with you just to be seen that they’ve understood to avoid embarrassment. A bit of practice of talking crap and train yourself to reinforce people’s agreement by your own body language (like holding eye contact and gently nodding) will grant you a even more positive response. Of course, the voice level and everything will all come into play. Basically – sound convincing. Like so many other researches have found, actual words are a small part of communication. The body language, appearance, way of talking, etc all form a part of the overall communication process. The paced, non repetitive, confusing but yet convincing words are simply window dressing.

I always think of this when I do a podcast interview.

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.