Category: Trend Following

Feedback in:

Hello Michael,

I am reading your book Trend Following, the fifth edition and I am really enjoying it. From reading the first few chapters I was learning that trend following has greater upside volatility and less downside volatility because traders have set up strategic stop losses to limit the downside. Therefore with these rules in place to protect their capital, I was surprised to learn that there are inventive drawdowns in even the most successful trend traders like DUNN Capital. I am confused about why these trading systems wouldn’t be exited earlier as I thought one of the major goals of trend following was letting your profits run and cutting your losses short. Finding drawdowns of 43%, 40%, and 63% in DUNN capital’s performance does not seem to be cutting losses short. Are these drawdowns more unique to DUNN capital as they are going for absolute return? Or is it inevitable that there are going to be large drawdowns in every system and something every trader has to be comfortable with? I would really appreciate any response.

Best,
Noah

Where do DDs come from? Many small losses that add up. Not from one market alone dropping 50%.

Make sense?

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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 Michael O’Leary. He was on the founding team of Bain Capital’s social impact fund. Previously, he invested in consumer, industrial, and technology companies through Bain Capital’s private equity fund. He has served as an economic policy advisor in the United States Senate and on two presidential campaigns.

The topic is his book Accountable: The Rise of Citizen Capitalism.

In this episode of Trend Following Radio we discuss:

• Corporate Structure
• Warren Valdmanis
• Capitalism
• Business Value
• Gun Violence
• Global Corporations
• Capitalism in America

Mentions & Resources:

• Michael O’Leary
• Accountable: The Rise of Citizen Capitalism
• Jeff Bezos – CEO of Amazon
• Warren Buffet
• accountablethebook.com
• @thisismichaelo

Listen to this episode:

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

Jump in!

Feedback in:

Hey Michael,

I’m really sorry for the late response. I haven’t traded before but I really want to start with trend following strategies. Recently, I read two of your books (The Complete TurtleTrader and The Little Book of Trading) and I loved both of them. I was curious about trend following trading before but after reading your books and after I finished my Masters in Finance this year I decided to get more into it. Thus, I also bought a course on trend following with some strategies to get taught. Anyways, I really enjoyed your books and they motivated me in following this direction. Keep up the good work.

Kind regards,
Thanos

Great!

Keep going!

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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

Please enjoy my monologue Drag Racing, Billions and Guns with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

Listen to this episode:

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

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

Feedback in:

Hi Mike,

My biggest challenge is pretty much exactly what you have laid out in your books; lack of a system built on concrete rules for entering, and more importantly, exiting both winning and losing trades. I have taken profits on winning trades that I should have let run and I have ridden bad trades all the way down to zero which I never should have made based solely on the trend for that particular market. I still can’t believe I lost money shorting Tesla on more than 1 occasion! Lack of that same system causes me take much more time than I have on a daily basis to manage my portfolio. After reading your books, I can see now that I was already trend following after a fashion. When everything fell apart in March I knew that Washington and the Fed would do what they did during the Housing Crisis; debase our currency by printing fiat dollars like the world was ending which would cause precious metals to trend higher. I made the first round of out of the money long call trades in April (late to the party due to no rules) and cashed out with gains similar to the ones below in May when I opened these same positions again out of the money to try to maintain leverage. The only reason I haven’t cashed out of some of these already is thanks to you and your books. Looking back with your system, I believe I would have never closed the original trades and I would have actually been shorting several markets on the way down in Feb and March before the trend turned higher.

You need a system. Objective. Read up here.

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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:

Finding the trend is the most challenging thing for me in trade.

You can’t find a trend until it’s over. That’s your problem. Looking for something that doesn’t exist will be hard. Jump in here and here and here and here.

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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:

Hi Michael,

I have just finished reading your TurtleTrader book here in Italy on holiday and I found it a fascinating read, hence why I then looked at your excellent website.

My biggest challenge by far has been deciding on entry points and to a lesser extent exit points.

Many thanks,

Martyn

You really need this:

• Exact rules for selecting your tracking portfolio.
• Exact rules for entering your trades at the right time.
• Exact rules for exiting your trades with a loss.
• Exact rules for exiting your trades with a profit.
• Exact rules for how much money to bet on each trade.

Right?

More than entry alone. Dive into more.

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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.