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Category: Psychology

Do You Have A Plan for When It Doesn’t Go Your Way?

Posted on by Michael Covel

Insights:

Through the gentle nudging of general manager Matt Millen — who was, in my opinion, one of the only stand-up guys in that organization — I spent a lot of time with a sports psychologist, trying to figure out how to get my confidence back. In the NFL (and especially at the quarterback position), if you don’t have confidence, you’re done.

There are 100 guys out there who can throw a comeback route, and 100 more who can throw a post. But there are only a handful of quarterbacks who can have the route picked off, then come back and throw it again. Who can get knocked down or get hit in the teeth … and throw it again.

That, to me, is the difference between making it to the NFL, and being great in the NFL.

I’m sometimes asked if I was put in an unfair position in Detroit. My answer is always immediate and the same: No. Saying so implies I was the only one in that kind of a position. Welcome to the NFL. Pick a year, and I’ll give you five guys who were in the same type of spot I was. For all of my prior success — all the balls I had bounce my way through college — I wasn’t prepared to deal with it when things no longer went my way.

If we’re being honest, not a lot of people are.

Trend following, take a loss.

Trend following, take a loss.

Trend following, take a loss.

Trend following, boom–winner.

More.

Source: Joey Harrington, Despite What You May Think, My NFL Career Was A Success. Sports Illustrated, December 21, 2015.

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“…We end up reinforcing the behavior patterns that aggravate the risk in the first place.”

Posted on by Michael Covel

Paul Volker gets it:

Larry summers, who would later serve as treasury secretary to bill Clinton and adviser to Barack Obama, had a theory. Technological and financial innovation, he told the group, had indeed made finance more bubble prone. He sketched out a scenario of how a crisis and deep recession could recur. Still, he concluded, since the Great Depression, the federal government had erected firewalls between the financial system and the real economy where ordinary people worked and invested: the vast federal budget, deposit insurance, and most important, an activist Federal Reserve: “it is now nearly inconceivable that there would be no active lender of last resort in time of crisis.”

The next panelist, Hyman Minsky, a professor at Washington University in St. Louis, for decades had flogged an iconoclastic theory of business cycles that fellow scholars had largely ignored. Since the 1960s, he said, the authorities had staved off another depression by reacting to every crisis with some combination of government borrowing and Federal Reserve lending. But each success, he warned, simply compounded the behavior that made the system crisis-prone. “Success is a transitory phenomenon,” he warned. He conceded, somewhat grudgingly, that “transitory” could last an awfully long time. It had been some fifty years since the last depression.

The last speaker on the panel was Paul Volcker, who had stepped down two years earlier as Fed chairman. He agreed with Summers that the world had more tools for dealing with crises. But his own take was closer to Minsky’s. He drew attention to a cartoon in that morning’s Boston Globe pegged to the Fed’s promise to pump money into the economy. It portrayed a dollar bill marked “United States of Amnesia.” “We seem to be on something of a hair trigger in using these tools,” he observed. “This leaves me with the disturbing question of whether by using these tools repeatedly and aggressively we end up reinforcing the behavior patterns that aggravate the risk in the first place.”

Trend following will be the winner next time. And next time. And next time…

Source: Greg Ip, “Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe.”

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Tom Brady: Trend Following Trading Insights

Posted on by Michael Covel

Sports lessons applied to trading:

Told another time by reporters that Brady attended a Broadway show instead of watching the Jets-Colts playoff game that would determine New England’s next opponent, Ryan quipped, “Peyton Manning would have been watching our game.”

What Ryan and others have never seemed to grasp, one of Brady’s former teammates explains, is that Brady has always been smart enough to accept that it’s impossible to know everything. That’s why he’s the best postseason quarterback of all time. (Brady holds the record for most playoff wins, yards and touchdowns.) That’s why he obsesses over the simple fundamentals of playing catch, drilling for hours and hours in the offseason with guys like Edelman and former teammate Wes Welker on stuff as basic as ball position and splits. A player can study film and look at 10,000 formations on an iPad for as many hours as the eyes and the brain will allow. But ultimately, the human mind is not a computer. Overthinking in tense moments, trying to decode a defense like it’s a sudoku puzzle, is the perfect recipe for hesitation and panic.

“You know, Brady probably doesn’t watch as much film as Manning, and that’s OK,” said Brady’s former teammate. “You know why? Because he’s got coaches that are watching just as much film as [Manning] is. What Brady gets is that he’s the only guy who understands exactly what’s going on down on the field. So when Josh McDaniels calls a certain play, Brady is thinking: ‘I know exactly why he called that play. I know exactly what my read is on this.’ Brady’s genius is that he understands delegation. He trusts the people around him.”

Indeed. More.

Source: Kevin Van Valkenburg, Tom Brady’s big reveal. ESPN, January 22, 2016. See http://espn.go.com/nfl/story/_/id/14615476/new-england-patriots-qb-tom-brady-big-reveal.

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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.

Ray Dalio on Mistakephobia

Posted on by Michael Covel

Wisdom:

Ray Dalio nails the education system well: “I believe that our society’s ‘mistakephobia’ is crippling, a problem that begins in most elementary schools, where we learn to learn what we are taught rather than to form our own goals and to figure out how to achieve them. We are fed with facts and tested and those who make the fewest mistakes are considered to be the smart ones, so we learn that it is embarrassing to not know and to make mistakes. Our education system spends virtually no time on how to learn from mistakes, yet this is critical to real learning. As a result, school typically doesn’t prepare young people for real life—unless their lives are spent following instructions and pleasing others. In my opinion, that’s why so many students who succeed in school fail in life.”

If you got mistakephobia in trading–you will fail. More.

Source: Ray Dalio, Principles. Bridgewater, 2011.

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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.

Three Ways to Be Like Jordan Spieth

Posted on by Michael Covel

Insights:

1. Split the Uprights:

“We do target training,” explains Cameron McCormick, Spieth’s longtime swing coach. “Jordan’s go-to range drill is to pick a left and right boundary — say, a bush and a flag — and envision a football goal post. He tries to land a percentage of his shots between the ‘posts.’ To mirror playing conditions, the goal-post width grows as he goes from his wedges — say, 10 yards wide — up to his driver.”

2. Know How to Miss:

“At the Masters, our plan was to attack the course while knowing where not to miss,” McCormick says. “On No. 3, a 350-yard par 4, Jordan hit hybrid off the tee to set up a full, spinning wedge from 100 to 115 yards out. That way, he could be precise with his approach and avoid the deep trap and the false front — two places you just don’t want to go.”

3. Debrief Post-Round:

“Jordan is great at post-round reflection. He detaches himself from the emotion of the day and asks, ‘What did I do well? What do I need to work on?’ This gives him an unbiased look at his performance, so he can keep improving.”

Trading too. Exact same applies.

Source: Mark Broadie, “What can you learn from a 20-year-old? Plenty. Jordan Spieth’s well-rounded game has made him a PGA Tour star.” June 23, 2014. See http://www.golf.com/instruction/jordan-spieths-well-rounded-game-has-made-him-pga-tour-star.

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. 479: Zen DeBrucke Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Zen DeBrucke
Zen DeBrucke

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My guest today is Zen DeBrucke, an author, consultant, personal coach and inspirational teacher. As the developer of the Internal Guidance System method, Zen has been blessed with the opportunity to build on 20 years of research and study on the subject of spiritual practice, somatic guidance and manifestation. Before founding Ahuma Institute and the Smart Soul Academy, Zen spent four years as Chief Executive Officer of The Netkitchen, an Internet strategy consulting firm. Zen used her expertise in account strategy and client counsel to develop lucrative and innovative Internet campaigns and properties for Fortune 500 companies like Applied Materials, IBM, BP and Electronic Arts.

The topic is her book Your Inner GPS: Follow your Internal Guidance to Optimal Health, Happiness and Satisfaction.

In this episode of Trend Following Radio:

  • Your inner GPS
  • Your inner flow
  • Emotional experiences
  • Neuroplasticity
  • The breadcrumb approach
  • The relationship between stress and disease

Mentions & Resources:

Listen to this episode:

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No Memory Trading Courtesy of TurtleTrader William Eckhardt

Posted on by Michael Covel

William Eckhardt, the great trend-following trader, has spoken forcefully about the idea of not having a memory in your trading:

“Suppose two traders, A and B, are alike in most respects except the amount of money they have. Suppose A has 10 per cent less money but he initiates a trade first. He gets in earlier than B does. By the time B puts the trade on, the two traders have exactly the same equity. The best course of action has to be the same for both of these traders now. Mind you, these traders have very different entry prices. What this means is that once an initiation is made, it does not matter at all for subsequent decisions what the entry price was. It does not matter. Once you have made an initiation, what your initiation price was has no relevance. The trader must literally trade as though he doesn’t know what his initiation price is.”

Don’t forget it.

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.