Category: Trend Following

Feedback in:

Hey Michael,

I know you get a lot of emails, but I had to tell you how I laughed at your description of SBF with his flabby man boobs. I’m like come on dude at least try to be respectable, but one look at that guy and I knew he was a fraud.

Ok question. I buy skandisk. It’s up 15% in a few weeks. How do I logically set a stop loss?

Enjoy your podcasts a lot.

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You need a full system, not a partial guessing process.

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
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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.

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue F*** Dark Times with Michael Covel on Trend Following Radio.

Listen to this episode:

• Listen to this podcast on iTunes. (Please leave a rating!)
• Listen on Spotify.
• Libysn RSS.
• Download as MP3 by right-clicking here and choosing “save as.”
• Free Video.

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Hello Mr. Covel,

Like you, I wasn’t born into royalty; just the son of a car mechanic and a secretary for a welding supply company. But I had a huge run of luck on the right side of a trend (although I didn’t know it at the time) and became financially independent in 2020-2021 in my early 40s.

My journey into trading is too long to describe here, but Jack Schwager and his Market Wizard series got me to believe that I could make it in the markets and introduced me to characters like Larry Hite and Ed Seykota. And Nassim Taleb (as well as other traders) helped me to better structure my thinking on how to make decisions under conditions of uncertainty. And through Hite’s “The Rule” I found you and your Trend Following book.

I just want to say ‘thank you’ for making such an excellent guide to life. Using primarily outcomes to make decisions rather than theory/”knowledge,” and immediately cutting out what is not working while trying to find and perpetuate things that do work has been a very useful philosophy/strategy for my life.

I just listened to one of your podcasts last night with Ed Seykota, and you mentioned Alan Watts. His “The Wisdom of Insecurity” is in my opinion a truly top notch book, very relevant to trading and letting go and “feeling” one’s way through life, following major trends, rather than trying to control everything. For me, Trend Following is the future way of thinking.

So again, just wanted to say ‘thank you.’ Books like yours have greatly enriched my life.

Sincerely,
Brad J.

Welcome!

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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.

There is an old Japanese legend that carries more weight than any Ivy League finance degree. It says that if you find yourself on the wrong train, you should get off at the nearest station.

It sounds like common sense. But in the markets, common sense is the rarest commodity. Most people treat a wrong trade like a marriage. They realize they’ve entered a position that is moving against them. The “story” they bought into isn’t coming true. But instead of getting off, they stay in their seat. They start looking for a reason to stay.

The Cost of the Return Trip

They think, “If I just wait long enough, it will turn around.” Or, “I can’t leave now, I’ve already lost 10%.”
The longer you stay on the wrong train, the more expensive the return trip becomes. This isn’t just about geography. It is about your capital, your time, and your psychological health. In trading, the “return trip” is the profit you need to make just to break even.

If you lose 50%, you don’t need a 50% gain to get back to zero. You need 100%. That is the math of the “Big Boy” trap. It is the belief that you found a secret door to wealth that doesn’t require discipline or the acceptance of loss.

The Discipline of the Exit

Trend followers don’t wait for the conductor to explain why the train is going the wrong way. If the trend breaks, we exit. We take the small loss. We don’t protect our ego. We protect our capital.

Precision is for surgeons. In the markets, precision is a trap. Most people are paralyzed by the fear of being wrong. They want to be perfect before they start. But the legends don’t win because they have a secret map to the truth. They win because they fail more than you do. They simply have the discipline to get off the wrong train before it takes them to a place they can’t afford to be.

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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.

Subscribe to Trend Following Radio on iTunes

My guest today is Ross Greene. He is a clinical child psychologist. Greene’s research has been extensively published in academic journals and he and the CPS model have been mentioned in popular media. He advocates against punitive, exclusionary disciplinary practices, including detention, suspension, expulsion, corporal punishment, restraint, and seclusion.

The topic is his book The Kids Who Aren’t Okay: The Urgent Case for Reimagining Support, Belonging, and Hope in Schools.

In this episode of Trend Following Radio we discuss:

• American education system challenges
• Meeting kids where they are
• Meritocracy vs equity
• Behavioral issues and classroom disruption
• Nature vs nurture in learning

Mentions & Resources:

• Ross Greene
• The Kids Who Aren’t Okay: The Urgent Case for Reimagining Support, Belonging, and Hope in Schools
• Lives In The Balance

Listen to this episode:

• Listen to this podcast on iTunes. (Please leave a rating!)
• Listen on Spotify.
• Libysn RSS.
• Download as MP3 by right-clicking here and choosing “save as.”
• Free Video.

Jump in!

Feedback in:

Hi Michael,

Thank you for your email. I’ve been listening to some of your podcasts and I wanted to learn more about your strategy.

What’s your biggest trading challenge right now? What’s keeping you from achieving the consistent profits?

Well I suppose it is having a system, strategy or process that actually shows growth. I have been trading for over 14 years. I have been on trading courses, read trading books, signed up to traders’ programmes, and I have nothing to show for it. My investment pot is smaller now than when I started. I have tried forex, crypto, shares, indices, day trading, long term trading. Everything has failed.

I’m hoping that your Trend Trading strategy can be the one to give me faith that I can be a successful investor. And it needs to happen soon because I’m not in the prime of my life, but it would be nice to see that I can provide for my family a bit more than a pension.

Marce C.

I’m here to help!

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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.

Feedback in:

Dear Michael,

“Trend Following” and “The Complete TurtleTrader” shaped how I think about systematic trading — the idea that a clearly defined, mechanistic edge, executed with discipline, can compound into real returns over time. Your podcast, with over 1,300 episodes featuring everyone from Ed Seykota to Jerry Parker, is the most comprehensive oral history of systematic trading that exists. You’ve spent two decades documenting what separates real systematic edges from noise.

I’m [nmae], 16, from McKinney, Texas. I’ve analyzed 16 years of CBOE S&P 500 options data and found that daily changes in IV skew (25-delta put minus ATM call) predict index returns at 1-5 day horizons with a t-stat of -3.87. The Q5-Q1 quintile spread is 14.2 bp/day. The mechanism: dealer gamma hedging of institutional put demand creates temporary directional pressure on the underlying.

The signal I’ve found operates at a much shorter timescale (1-5 days) than the trend-following systems you’ve written about, but the underlying philosophy is identical: identify a persistent market structure that creates predictable price behavior, define rules around it, and execute systematically. The mechanism — dealer hedging forcing directional moves — is structural, not behavioral, which is why I believe it persists. Your books emphasize that the best systematic strategies exploit a counterparty who trades for reasons other than profit (hedgers, index rebalancers). In my signal, the counterparty is options dealers who hedge not because they want to, but because risk management requires it. That’s exactly the kind of forced, non-discretionary flow that creates durable edges.

I’m actively seeking a summer internship at a CTA, systematic trading firm, or quant fund. Through your podcast and your teaching across 76+ countries, you’ve built relationships with hundreds of systematic traders and fund managers worldwide. If you know of any firm that might consider a high school student with completed systematic trading research, I’d be deeply grateful for any introduction or guidance.

Thanks for the nice note, but I have no connection to that time frame. Zero!

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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.