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Category: Trend Following

Algorithms and Decision-Making

Posted on by Michael Covel
Algorithms Are Smart
Algorithms Are Smart

Feedback in:

Hi Michael,

You talked about computers and algorithms in a recent podcast.

I just listened to a talk by Brian Christian for the Long Now foundation about using algorithms to support our decision making. Not necessarily using a computer, but rather to help our thinking and decision making process. A great talk which touches on similar issues. I’d love to hear you interview him some time.

Brian Christian is the co-author of “Algorithms to Live By: The Computer Science of Human Decisions”.

Cheers,
[Name]

Thanks! Looks like a good guest.

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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Ep. 468: Irrationality with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Irrationality with Michael Covel on Trend Following Radio
Irrationality with Michael Covel on Trend Following Radio

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Please enjoy my monologue Irrationality 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:

  • Law of demand
  • Behavioral economics
  • Experimental economics
  • How do you make bubbles go away
  • Using algorithms over emotions
  • Noise reduction
  • Statistical thinking
  • Understanding the difference between risk and uncertainty
  • Probability theory
  • Risk Communication
  • Unconscious things that make us fearful

At the beginning of the 20th century, the science fiction author Herbert H. Wells made the following prediction, ‘If we want efficient citizens in a modern technological society we need to teach them three things: Reading, writing and statistical thinking.’ That is, a good way to deal with risk and certainty. Now, today almost 100 years later we have taught in the investment world almost everyone to read and write, more or less, but not to think with risk and uncertainty. – Gerd Gigerenzer

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Ep 467: David Burkus Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
David Burkus
David Burkus

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My guest today is David Burkus, the bestselling author of four books about business and leadership. His books have won multiple awards and have been translated into dozens of languages. Since 2017, Burkus has been ranked as one of the world’s top business thought leaders by by organizations like Thinkers50, Global Gurus, and LeadersHum. As a sought-after international speaker, his TED Talk has been viewed over 2 million times. He’s worked with leaders from organizations across all industries including Google, Stryker, Fidelity, Viacom, and even the US Naval Academy. A former business school professor, Burkus holds a master’s degree in organizational psychology from the University of Oklahoma, and a doctorate in strategic leadership from Regent University.

The topic is his book Under New Management: How Leading Organizations Are Upending Business as Usual.

In this episode of Trend Following Radio we discuss:

  • Re-designing the factory
  • Physical labor vs. Intellectual labor
  • Machines vs. Man
  • Multitasking = Task switching
  • “The customer is always right” mentality
  • Confirmation bias
  • Introverts and extroverts
  • Customer service
  • Non-compete clauses

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Ep. 466: Don’t Worship the Computer with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Don’t Worship the Computer with Michael Covel on Trend Following Radio
Don’t Worship the Computer with Michael Covel on Trend Following Radio

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue Don’t Worship the Computer 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:

  • “Super computers”
  • Systematic trading
  • Creating algorithms
  • Coding
  • Machines replacing humans
  • Breaking down the use of software

“…The power of computers owes nothing (save speed) to the causal peculiarities of electrons darting about on silicon chips…” – Daniel Dennett

“Trend following trader = CPA not AI singularity theorist.” – Michael Covel

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

Confessions of a Confidence Man: Wall Street’s Daily Method

Posted on by Michael Covel

A great reminder:

—

In Confessions of a Confidence Man, Edward H. Smith lists the “six definite steps or stages of growth” of a confidence game:

Foundation Work: Preparations are made in advance of the game, including the hiring of any assistants required.

Approach: The victim is contacted.

Build-up: The victim is given an opportunity to profit from a scheme. The victim’s greed is encouraged, such that their rational judgment of the situation might be impaired.

Pay-off or Convincer: The victim receives a small payout as a demonstration of the scheme’s effectiveness. This may be a real amount of money, or faked in some way. In a gambling con, the victim is allowed to win several small bets. In a stock market con, the victim is given fake dividends.

The Hurrah: A sudden crisis or change of events forces the victim to act immediately. This is the point at which the con succeeds or fails.

The In-and-In: A conspirator (in on the con, but assumes the role of an interested bystander) puts an amount of money into the same scheme as the victim, to add an appearance of legitimacy to the scheme. This can reassure the victim, and give the con man greater control when the deal has been completed.

—

So have you ever been marked?

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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• Frequently Asked Questions
• Performance
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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.

Neurath’s Boat via Robert Seawright

Posted on by Michael Covel

From Bob Seawright:

The world we live in is profoundly complex and is much more difficult for us to navigate than we usually think or assume. According to Dan Kahneman, “We systematically underestimate the amount of uncertainty to which we’re exposed, and we are wired to underestimate the amount of uncertainty to which we are exposed.” Accordingly, “we create an illusion of the world that is much more orderly than it actually is.”

Our ability to forecast the future, much less control the future, is extremely limited and is far more limited than we want to believe. That’s why the planning fallacy is such a constant and monumental problem. We simply misapprehend (or ignore) the data far too often. Instead, we concoct stories — often wonderful stories — to provide an interpretive framework for our forecasts, expectations and decisions. That framework is necessary for us to “sell” our stories and ourselves.

He continues:

We are always tempted and too often swayed by the shiny new object — the next “silver bullet” — that will make things right. Sadly, life doesn’t seem to work that way very often. No matter what our stories say.

Spot on.

Otto Neurath
Otto Neurath

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. 465: Sunrise Capital with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Sunrise Capital with Michael Covel on Trend Following Radio
Sunrise Capital with Michael Covel on Trend Following Radio

Subscribe to Trend Following Radio on iTunes

Please enjoy my monologue Sunrise Capital 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:

  • Brexit and systematic trading
  • Price distribution
  • Price action
  • Directional betting on a coin flip event
  • Preparing for black swan events
  • Are computers good or bad?
  • MAR ratio
  • Diversification

“Systems control the trading ideas. What they do is they give you a statistical edge in creating your trading ideas.” – Chris Stanton

“It’s a bad idea to get the insurance after the catastrophe.” – Jason Gerlach

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