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Category: Trend Following

Larry Hite on “Being Wrong”

Posted on by Michael Covel

An excerpt from The Little Book of Trading:

One final important gem from Larry Hite is that being wrong is okay. He says he was never very good in school and not much of an athlete either. But he turned that to his advantage because he was able to grasp the idea that he could be wrong. In fact, it came as no surprise to him when he was wrong. Hite recalls with pride: “I’ve always built in an assumption of wrongness [in my trading]. I always ask myself: What is the worst thing that can possibly happen in this scenario? Then I use that worst-case scenario as my baseline. I always want to know what I’m risking, and how much I can lose. And sometimes, when you really look at it, there’s really not all that much risk [which is why you can get rich].”

More on Hite.

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Michael Covel Active Trader Article

Posted on by Michael Covel

My January 2012 article in Active Trader: Trend-following winners are not “lucky monkeys”.

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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.

Pencil and Paper: The Secret to Success?

Posted on by Michael Covel

One of John W. Henry’s associates elaborated on the early days:

“Originally all of our testing was done mechanically with pencil and graph that turned into lotus spreadsheets, which was still used extensively in a lot of our day to day work. With the advent of some of these new modeling systems like system writer, day trader and some of the other things, we’ve been able to model some of our systems on these products. Mostly just to back test what we already knew, that trend following works.”

Had this same conversation this year with one of the interviewees for my book The Little Book of Trading. The difference? He was not talking of thirty years ago, but about being success today!

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.

Alexander Ineichen on Following the Trend

Posted on by Michael Covel

Some research (PDF) from Alexander Ineichen. Nice to see my book Trend Following in the bibliography.

Remember: “The aim of the wise is not to secure pleasure, but to avoid pain.” –Aristotle

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.

“Good Morning Mr. Dennis!”

Posted on by Michael Covel

My book on the Turtles serves up lessons that never go stale. An excerpt:

People were willing to do just about anything to get Dennis’s attention [to get hired as one of his student traders]. Of all the approaches his students took to get themselves admitted to his trading school, Jim Melnick’s was the most extreme and inventive. He was an overweight, working-class guy from Boston who was living over a saloon in the Chicago suburbs. However, Melnick was determined to get as close to Dennis as possible. He actually moved to Chicago just because he’d heard about Richard Dennis. He ended up as a security guard for the Chicago Board of Trade and every morning would say, “Good morning, Mr. Dennis” as Dennis entered the building. Then, boom, the ad came out and Melnick got selected. Dennis, who was loaded with millions and power, took a guy off the street and gave him the opportunity to start a new life. The story of Melnick is pure rags-to-riches. How did he know that getting that close to Dennis could lead to something? He didn’t, of course, but he hoped it would. His self-confidence was prophetic. Another of Dennis’s students described Jim’s “everyman” qualities: “He reminded me of a truck driver and like magic became a ‘Turtle’ and he still couldn’t believe why or how…as far as where he is today, I have no clue at all.” Mike Shannon, a former actor who had left school at the age of sixteen, made it to Dennis’s door, too. He recalled, “I was working as a broker, and I was a very bad commodity broker.” Through a bunch of floor brokers Shannon found out about the ad, but he knew his résumé was problematic. He had a solution to that: “I made up a phony résumé, and I sent it off to Richard Dennis. I used the school of audacity to get the job.” People get fired or, at the very least, don’t get hired because of falsifying a résumé, but that was not how it worked with the eccentric head of C&D Commodities.

Nice.

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.

Amos Hostetter: “Never Mind the Cheese. Let Me Out of The Trap!”

Posted on by Michael Covel

If trend trader Amos Hostetter of Commodities Corporation lost 25 percent, he’d exit:

“Never mind the cheese. Let me out of the trap.”

Everyone gets it?

More.

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.

Sunrise Capital: Lessons In Trend Following Persistence

Posted on by Michael Covel

Gary Davis was just about to turn 34 as he started trading with a trend following program he had learned from author J. Welles Wilder, Jr. He lost on his first 17 trades, but once he made one tweak, which he believed is the only reason he is still trading now, he was back in the game.

Davis [then] came to the conclusion, after a period of rigorous and profitable testing with his own money, that there was significant potential in scaling the size of his trading strat­egies. He sought the help of friends and family for capital to seed a larger pool of money.

Davis founded and launched what would come to be known as Sunrise Capital Partners (known as Sunrise Commodities at the time of inception) in 1980—with the gentle prodding of Ken Tropin (who then was with Dean Witter brokerage, but who today runs one of the most successful trend following firms in the world).

Davis was not super high tech at the time. He pre­ferred handwritten charts and price quotes from the print version of the Wall Street Journal. That should be an inspi­ration for those of you who want to make excuses for not having the perfect this or that. Just do it, right?

Note: Excerpt from The Little Book of Trading.

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.