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An Investor Checklist

Barry Ritholtz offers an investor checklist of the most common errors investors make:

1. High Fees Are A Drag on Returns
2. Mutual Fund Are Inferior to ETFs
3. Reaching for Yield is Extremely Dangerous
4. Asset Allocation Decisions matter more than stock selection
5. Passive is usually better than Active Management
6. You must understand “The Long Cycle”
7. Behavioral Issues Are Costly
8. Cognitive Errors as well
9. Understand your own risk tolerance
10. Pay Guys Like Me For the Right Reason

White Ritholtz was clearly not writing with only the trend following trader in mind, many of these are spot on for trend following.


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.

Think About the Random Nature of Trends

Trends either up or down are random. You never know when one will hit, but you have to be ready for their unexpected arrival. Here are some recent trend examples:

Chart 1
Chart 2
Chart 3
Chart 4

However, it’s not about one winning chart or two or three. It’s about a portfolio of markets in the context of a complete trend following system. And yes there will be losing charts too.


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. 27: Scott Patterson Interview with Michael Covel on Trend Following Radio

Scott Patterson
Scott Patterson

My guest today is Scott Patterson, an American financial journalist and bestselling author. Patterson has made a career of reporting the subterranean inner-workings of the markets, writing for the Wall Street Journal, Rolling Stone, and Mother Earth News. His first book, The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, was released in 2010.

The topic is his book Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System.

In this episode of Trend Following Radio we discuss:

  • Trace the history of high speed trading and electronic communication networks (ECNs) back to Josh Levine, who founded Island, the computer system that led to the high frequency trading we see today
  • Technological revolution behind Island, and how its transparency led to dark pools – opaque markets where bids and offers are not made public
  • Patterson goes on to propose that the entire market has gone dark
  • The relation of dark pools to the flash crash
  • The regulation of dark pools
  • How the real New York Stock Exchange is in a data center in the countryside of New Jersey

Listen to this episode:

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Geneva Trend Following Insights: Still Ignored

Feedback in:

Hello Michael, Warm greetings here from Switzerland! I thought I would give you some feedback from a conference I attended last week in Geneva: The Opal European Wealth and Family Office Conference. It reminded me again of how much work we need to do to spread the logic of basic trend following amongst this group. The three-day conference was very much focused on issues of feeling, judgements and nothing short of predictions about asset classes, which countries they should be investing in and the general direction of the market. It is genuinely frustrating to find that trend following is still confined to and seen as a specialized CTA strategy, one of many others. Thankfully, there was a short section (discussed in a separate boardroom) about CTAs and their role in a portfolio, and it would appear that there was a greater deal of acceptance of trend following amongst this group. I also cannot help but feel that even though we are all in the same industry, actual fund managers and those who allocate assets (and therefore judge and analyze us) are in fact very far removed from one another. Michael, we are in the process of building our business and diversifying beyond our own single strategy fund. We have planned for some time to create a fund-of-fund of esteemed peers: the qualification simply being systematic trend followers who we respect from both a quantitative and qualitative point of view. As you know, there are some fancy software and websites which allow you to do quantitative analysis on these. However, we kindly want to ask your opinion and suggestions on the handful of funds here in Europe and the UK which you in your experience find to fit well with your idea of systematic trend followers (regardless of trading instruments, asset class or such variables such as AUM). Of course, there are people like [name] and the like, but preferably ones that are not as well-known as the more famous ones. We will treat your suggestions with confidence and will not hold you responsible for your suggestions; they will simply provide an interesting angle from which to begin our analysis, from somebody whose opinion we hold in high regard. Thank you so much and all the best to you Michael. PS: Thank you for the many updates on both your blog and Facebook. Sometimes you are the only reason for going onto Facebook!

Thanks for the insights and feedback!

I am an open book, however. My experience with assorted managers (by name) is across my websites, 4 books, film and podcast episodes.

It’s all transparent.


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 Beat the Odds at Judging Risk

Fast, clear feedback is crucial to gauging probabilities; for lessons, consult weathermen and gamblers:

Most of us have to estimate probabilities every day. Whether as a trader betting on the price of a stock, a lawyer gauging a witness’s reliability or a doctor pondering the accuracy of a diagnosis, we spend much of our time—consciously or not—guessing about the future based on incomplete information. Unfortunately, decades of research indicate that humans are not very good at this. Most of us, for example, tend to vastly overestimate our chances of winning the lottery, while similarly underestimating the chances that we will get divorced.

Psychologists have tended to assume that such biases are universal and virtually impossible to avoid. But certain groups of people—such as meteorologists and professional gamblers—have managed to overcome these biases and are thus able to estimate probabilities much more accurately than the rest of us. Are they doing something the rest of us can learn? Can we improve our risk intelligence?

Yes. One of my better efforts at explaining that yes.

Article Excerpt: Source.


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. 16: Francisco Vaca Interview with Michael Covel on Trend Following Radio

Francisco Vaca
Francisco Vaca

My guest today is Francisco Vaca, the chairman, CEO, a principal trader for Vaca Capital Management, and a commodity trading advisor (CTA) established in 2000. Vaca began his career in the futures industry in 1996 as an executive researcher for C&D Commodities co-founded by Richard Dennis of “Turtles” fame. His responsibilities included the research and implementation of systematic trading strategies for the futures and equities markets. Dr. Vaca holds a Ph.D. in physics from the University of Illinois at Chicago in addition to his undergraduate degrees in both physics and mathematics.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • Bottom of the source of profits in the futures markets
  • Why people who are on the losing side of trades still play the game
  • Importance of diversification
  • Why you should take every signal you can

Listen to this episode:

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Trend Following Little League Team

My first year Little League sponsorship emblazoned TurtleTrader on the uniform, but now a slight shift to be even more trend following inclusive:

Trend Following Little League Team


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.