A reader writes:
“I’m looking at your Flagship Product. As a veteran, I’m a straight up guy who wants straight up answers. Is it worth the investment or by reading all the materials you have published do I already have the knowledge?”
Everyone needs something when it comes to trend following if they are reaching out to me directly. They either need a lot, a little, reinforcement–everyone needs that extra edge for their situation. My support allows a tailoring to what you need. So, yes, I fill in the blanks where you and all of my clients need it.
Q: Who is trend following for?
A: Everyone (almost):
• All new or private traders trading their own account.
• All account sizes.
• Hedge fund managers, commodity trading advisors, floor traders and locals.
• Professional traders looking to establish money management businesses.
• Those that trade 401K, IRA, or other retirement vehicles.
• Those that want to trade all markets with the same rules.
• Those that want to make money in bull, bear and black swan markets.
This is for brand new to pro traders. It is for traders that trade global markets and for those that trade only their home country markets. It is for retirement, speculative accounts, Registered Investment Advisors, fund managers and college students. This is a true location independent, trade on a desert island trading profit-making opportunity.
Q: Who is trend following training not for?
A: For starters:
• Those expecting billions instantly.
• Day traders.
• People who think they can predict tomorrow.
• Anyone who says this: “Identifying and exploiting anomalies in price action fast is the key to profitable trading.”
• If you are not attached to reality we will be a very bad match.
Before the rest of my FAQs, the philosophy.
Trend Following Theory
Trading: Traders are different. They have a defined strategy to profit in all climates. Trend following traders do not care what market they buy or sell as long as they make money.
Absolute Returns: Trend Following™ has above-average performance over the last 7 decades. The potential to compound wealth is huge.
Up and Down Trends: Trend Following™ makes money in up or down markets, bull or bear.
Tail Risk: Trend following strategy performs above average when market bubbles pop, when the Black Swan arrives. For example, trend following made huge money during the Stock Crash (1973–74), Black Monday (1987), Barings Bank (1995), LTCM & Asian Crisis (1998), Stock Crash (2000-02), 9/11 (2001), Great Recession (2008-09), Oil Market (2014-16) and Brexit (2016). Review big events.
Portfolio Diversification: Trend Following™ returns are uncorrelated to traditional passive investments.
Inefficient Markets: Trend Following™ goes against the efficient markets hypothesis (EMH).
Nurture Beats Nature: Winning traders don’t have a special gene, divine gift, innate talent, inside knowledge or huge starting capital. They have a system.
Everything Flows: Trend followers react to market movements and follow along without a story about why.
Statistical Thinking Is Paramount: During a Monday Night Football game, Ron Jaworski nailed it: “Play calling is about probability not certainty.”
Market Bubbles: The mythological 100-year flood happens all the time. Since 1929 there have been 18 market crashes always rooted in irrational exuberance. Read more.
Fundamentals Are Religion: To paraphrase a great trader: “The illusion has been created that there is an explanation for every market move with the primary task to find that explanation.” Trend Following™ does not need news, fundamentals or chart patterns.
The Market Is Never Wrong: People hang on and pray the market will come back if it doesn’t go in their favor. Don’t do that. The market is never wrong.
You Have to Bet to Win: Take big risks if you want big rewards. If you want an average reward, take an average risk. No balls, no babies. However, as Larry Hite said, “Don’t bet your deli to win a pickle.”
Process Beats Outcome: Do you want to be right or rich? You have no control over the results; you have control over your action. You can only control how much you lose.
Think Like Kenny Rogers: If you must play decide upon three things at the start: the rules of the game, the stakes and quitting time. You’ve got to know when to hold ’em. Know when to fold ’em. Know when to walk away. Know when to run.
Behavioral Biases: The lessons of the greatest trading psychology pros are part of Trend Following. See the podcast.
Learn to Love Losses: P.T. Barnum said, “This way to the egress!” If famed trader Amos Hostetter lost 25 percent he’d exit: “Never mind the cheese. Let me out of the trap.”
Technology Is No Mistress: Pablo Picasso said, “Computers are useless. They can only give you answers.” Start by answering your daily market questions in advance. Automating answers is the easy part.
Zero Sum Battles Are Life: If you are going to win, someone else will lose. Does survival of the fittest make you uneasy? Stay out of the zero sum game (PDF).
Hero Worship Kills Accounts: When TV pundits say it’s time to buy Google or dump Apple, millions follow random advice blindly. Don’t drink that Kool-Aid.
Buy and Hold (Hope): Buy and hold works for investors who live forever. It also works for those who believe in magical thinking and pixie dust. Mutual funds and cosmetics: They both sell hope.
No Balance Sheets: It does not matter if you’re trading stocks or soybeans: “Trading is trading, and the name of the game is to make money, not get an A in ‘How to Read a Balance Sheet?'”
No Tops and Bottoms: Trend following aims to capture the middle, or meat, of a market trend, up or down, for profit. You will never get in at the absolute bottom or get out at the absolute top.
Have Markets Changed? Not only have markets changed, they continue to change: “If you have a valid market philosophy, learning to accept that change and flow with it is your greatest asset. No matter how ridiculous market moves appear at the beginning, and no matter how extended or irrational they seem at the end, following trends is the rational choice in a chaotic, changing world.” That’s how the owner of the Red Sox made his trend following fortune. More.
True Reality: “If you want to make money in any market, you need to mirror what the market is doing. Other things being equal, the longer you stay right with the market, the more money you will make. The longer you stay wrong with the market, the more money you will lose.”
Price Makes Markets the Same: “You do not need to know anything about bonds. You do not need to understand different currencies. They are just numbers. Corn is a little different than bonds, but not different enough to trade them differently. Some people have a different system for each market. That is absurd. You are trading mob psychology. You are not trading corn, soybeans, or the S&P. You are merely trading numbers.”
No Discretion: “You cannot test or simulate how you were feeling when you got out of bed 15 years ago when you’re looking at historical simulations. If you’re going to trade using a system, you must slavishly use the system and avoid discretionary overrides. You do whatever the hell the system says no matter how smart or dumb you might think it is at that moment.”
Proper Betting: If you have $100,000 and you want to trade Gold, well, how much will you trade on your first trade? Will you trade all $100,000? What if you’re wrong? What if you’re wrong in a big way and lose your $100,000 on one bet? Not smart.
Prenuptial Agreement: The paramount factor when the market goes against you: “I’m out!” You need a prenuptial agreement with the market. The time to think about when you exit is before you ever get in.
Home Run Trades: A trend following baseball coach would approach it like the former manager of the Baltimore Orioles: “Earl Weaver designed his offenses to maximize the chance of a three-run homer. Weaver did not bunt or want guys who slapped singles. He wanted guys who hit big home runs.”
Frequently Asked Questions
Q: Please define trend following.
A: Read. Trend following does not pick bottoms or tops. You always get into a trend late, and get out late. You cannot predict a trend. The foundation of one of the most profitable insights in the history of market speculation: capture the middle meat of a trend and you can make a fortune.
Q: Is this fancy software and complicated trading strategies that seemingly only rocket scientists can trade?
A: No. The real risk in today’s age is over-doing a trading system. There is so much computing power available and so much data available, but the reality is that trend following rules can be explained on the back of a napkin. You will learn to use rules that anyone can apply for potential profit. Can software help automate trend following strategies? Sure, but don’t let automation fool you. Consider wisdom from Daniel Dennett:
“Here is something we know with well-nigh perfect certainty: nothing physically inexplicable plays a role in any computer program, no heretofore unimagined force fields, no mysterious quantum shenanigans. There is certainly no wonder tissue in any computer. We know exactly how the basic tasks are accomplished in computers, and how they can be composed into more and more complex tasks, and we can explain these constructed competences with no residual mystery. So although the virtuosity of today’s computers continues to amaze us, the computers themselves, as machines, are as mundane as can-openers. Lots of prestidigitation, but no real magic…All the improvements in computers since Turing invented his imaginary paper-tape machine are simply ways of making them faster.“
One of the most accomplished trend following traders of the last 30 years, a man that has made billions, still tracks and automates his world with EXCEL. Nothing fancy. No mental masturbation.
Q: Does your Flagship product come with recommendations?
A: You will know all trades to take for all markets at all times. You won’t need ongoing ‘recommendations’ as you will have all from the start. My trend following systems give you the rules for your ongoing trade signals (what some might call recommendations).
Q: Is trend following trading black box system trading?
A: This is not black box trading. All rules and philosophies taught are fully disclosed.
Q: What is your background?
Q: How did you learn trend following?
Q: What are the origins of trend following?
Q: What are the requirements to start trading?
A: These prerequisites are required either in advance or at the same time. You will also need inexpensive daily and or weekly price data.
Q: Why are there two versions of your product?
A: Flagship Premium gets you there faster.
Q: What are performance examples?
A: For more than 7 decades trend following traders have produced massive profits.
Q: When does trend following work?
A: When markets trend–is the short answer. The investment objective of my trading programs is to extract profits from up, down and black swan markets (rare or surprise events), resulting in an above average return stream. All programs can be applied to long only and long/short portfolios and all rules are best applied in a 100% systematic manner. Think of it like a machine:
Q: What type of markets can be traded?
A: Systems provided are for stocks, bonds, commodities, currencies (FX), energies, agriculturals, metals and softs. Even BTC. Can you trade equities only, for example? Yes.
Q: What market instruments can be traded?
A: Systems provided are for equity ETFs (equities), LEAPs options and or futures.
Q: Success stories?
Q: How detailed is your product?
A: This service is an overall trend following trader education with exact trend following systems that can be applied immediately to your account. That means you will receive:
• 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.
Q: It seems strange that someone is willing to give away a process that works.
A: Most people don’t want to change to something good. They are fine with mediocre results. Most are happy losing.
Q: Are your trading systems just Turtle trading?
A: Michael Covel’s The Complete TurtleTrader explains the Turtle story and system in detail. It is the definitive Turtle trader rules resource, but my Flagship systems and training go much farther. Advanced systems, examples and human interaction with Michael and his staff, the live teaching element within Flagship, is an entirely different experience.
Q: What is the difference between your books and systems & training?
A: The books are great resources filled with thousands of details, and they have helped many traders make money, but my systems and training with support are different. Questions come up. People need help. Personal instruction gives insights. Additionally, many proprietary trading systems are included (not in the books).
Q: Is trend trading only for the USA?
A: My clients are in 70+ countries trading on exchanges from Europe to Asia to the Middle East to South America to North America.
Q: Are your systems and training for the individual investor?
A: Many of my clients are simply individuals trading their own account. Many are with no experience. Some have experience, but the wrong kind. Whether 21 and in college, age 30 working a job, or age 75 in retirement, you can learn trend following trading.
Q: Are your systems and training for market professionals?
A: My systems and training are also used by experienced traders worldwide. Hedge fund managers to CTAs to CFAs to CMTs brokers to financial advisers on every continent.
Q: How were your systems and training assembled?
A: The great traders, along with their trading rules, are not easily accessed. It’s a very closed club. However, I have dedicated my life to assembling trading systems and lessons. I have spent the last 15 years on the inside learning from the greatest traders of our time. View mentors.
Q: The top end of your trading system is expensive.
A: Paying for trading education is far less expensive than losing a fortune with no trading plan (which many do). My price is negligible if you consider it an investment in your future wealth.
Q: Can systems be applied to shorter time frames like hourly or 4-hour charts? Does Day Trading Work in Conjunction with Trend Following?
A: No. Day trading is fool’s gold. My systems and training will be worth millions to you over a lifetime if you simply understand that day trading is a mirage.
Q: Talk about the learning process for your clients.
Q: The right exit strategy?
A: Applying explicit exit rules to limit damage during market declines is the name of the game. Survival! That means having an exit strategy for all of your positions at all times. That means deliberately, consistently and mechanically cutting losses short while letting your winners run.
Q: What starting capital is needed?
Q: This is for retirement accounts?
A: You can trade equities, futures and ETFs in retirement accounts (401ks, IRAs, Keoghs, Seps, etc.).
Q: Trend following works on stocks?
A: Yes. 100%. Trend following is not instrument specific. Trend followers can and do trade all types of instruments. Some trade futures. Some trade ETFs. Some trade LEAPS® options. Some trade commodities. For example, today trend following traders can trade ETFs and get exposure to stock and commodities markets without having to trade futures. You will learn the best option for your situation.
Q: Is trend following risky?
A: Life is risky. You might get hit by a car crossing the street. However, if you have a concrete plan, risk can be managed.
Q: Do university classes assist in trend following education?
A: Most finance departments either are unaware of trend following or ignore it. Many of the greatest traders had little to no experience trend trading before starting. Trend following legend John W. Henry (owner of Boston Red Sox), for example, did not have a college degree.
Q: Speak to behavioral biases.
A: Trend following handles the biases:
Q: How much math is involved in trend following for success?
A: The basics: add, subtract, multiply, divide. Some will have more understanding, and that is fine too.
Q: Do trend followers watch screens during market hours?
A: Some trend followers only trade once a week using weekly bars. There is no need to watch the screen during market hours.
Q: How much time is required to trade as a trend following trader?
A: You can spend a minute or two per market each day. For example, you check prices in the evening, then with one trade in the morning, you place or change any orders in accordance with rules. Flagship trend following trading systems use daily data to determine buy and sell signals. Orders can be placed before the market opens and do not need hourly monitoring. Most top traders manage their trades in 10 to 30 minutes per day. Trend follower Richard Donchian:
“If you trade on a definite trend-following loss limiting-method, you can trade without taking a great deal of time from your regular business day. Since action is taken only when certain evidence is registered, you can spend a minute or two per [market] in the evening checking up on whether action-taking evidence is apparent, and then in one telephone call in the morning place or change any orders in accord with what is indicated. [Furthermore] a definite method, which at all times includes precise criteria for closing out one’s losing trades promptly, avoids…emotionally unnerving indecision.”
Each day you determine entries and or exits for the following day. You can then buy or sell “at the market” on the open the next day.
Q: Can your trend following strategies be automated?
Q: Why is money management needed?
A: Money management, or position sizing, is a critical component of trend following trading success.
Q: Are markets different now?
A: Markets are always the same because they always change. Trend following trading adapts to constant change. That’s the way to look at it. If someone says markets have changed, reach your wallet. You are about to be picked. Alan Watts the philosopher makes the case for how trend following responds to constant change:
“If, when swimming, you are caught in a strong current, it is fatal to resist. You must swim with it and gradually edge to the side. One who falls from a height with stiff limbs will break them, but if he relaxes like a cat he will fall safely. A building without give in its structure will easily collapse in storm or earthquake.”
Trend following has give.
Q: Is 24-hour news needed?
A: You don’t need real-time data or news. In fact, you don’t need news at all to be a trend following trader.
Q: Is leverage used in trend following?
A: All great traders use leverage. It is a tool to be used correctly. However, trend following is not about using reckless leverage (like Wall Street banks).
Q: Once training is completed is a broker or financial adviser needed?
Q: What do you think of Gann and Elliott Wave?
A: Nice version: waste of time. True version: con.
Q: What additional expenses are needed?
A: You need money to trade and daily price data (about $20-50/month). My clients also receive a special 10% discount with CSI Data (a world data leader).
Q: What about breaking into the fund management business?
A: A critical feature of my Flagship is support. You will receive help on introductions, along with hints on how to break into the fund business or just advice on trading your own account.
Q: Do you explain exactly the markets to trade and why?
A: Yes. Diversification across markets is part of the process. Trend following exposure to many markets allows profits to cover losses. Big moves, and the profits from those, offset small losses across a diversified portfolio. You can trade those types of markets via ETFs, LEAPs and or futures.
Q: Are chart techniques used to pick entry levels, exit levels and where to place stop levels? Do you teach a one-size-fits-all method of level picking or do you tailor it to the individual?
A: No chart techniques are used, but you will know exactly your entry, exit and where to place stops. The rules taught can be tailored, absolutely.
Q: Do your rules help to profit during crashes and tail events?
A: Yes. Making money from black swans, surprises, tail events and crashes is core to trend following success. Think about the “edges”:
Q: Is it really possible to compete against the big funds?
A: Yes, but this is not about competition. The big funds don’t stop little guys from trading. The idea that big traders block small traders is nonsense. In fact, smaller traders can trade markets larger traders can’t (due to their overdone size).
Q: Are too many people trading as trend following traders?
A: Broadly speaking the amount of money trading globally applied to trend following methods is tiny by comparison to the mountain of money stuck in buy and hold mutual funds. The opportunity for trend following success is massive.
Q: What are your main criteria to identify a trend?
A: In trend following you don’t do that. In trend following you take entry signals, and have exit signals. After an entry and then exit you can historically identify a trend. Anyone saying they can spot or predict trends in real time is incorrect.
Q: Assuming that I decide to quit my day job working for the man and become a trader, how do I get access to the markets? How do I do research? Do I need to have access to real-time and historical data?
A: You will need a broker and you will need market data (not real time). I help understand on both issues with recommendations. The research? I provide that too.
Q: Michael would probably crush me for asking this, but I’ll ask it anyway: Is trend following a full time job? It is a big commitment and I’d like to know if it can be done part time?
A: You can be part-time. 100%. You will not be day trading. You can trade using daily or weekly closing prices. No other strategy allows this.
Q: The podcasts are very educational. I have only listened to about 80 of them and while I enjoy them enormously, they mostly dive into the human nature. I didn’t hear much about the specifics on trends in the markets. Do I need to buy Michael’s entire system to be able to understand the trends?
A: We give away a ton of free resources, but if you want to go fast and take advantage of my best work my Flagship is the best bet.
The Trend Following Challenge
The Eastern philosopher Alan Watts knew trend following (even if unintentional): “The question, ‘What shall we do about it?’ is only asked by those who do not understand the problem. If a problem can be solved at all, to understand it and to know what to do about it is the same thing. On the other hand, doing something about a problem that you do not understand is like trying to clear away darkness by thrusting it aside with your hands. When light is brought, the darkness vanishes at once.”
Overcoming fear and moving you toward rich is part of my Trend Following™ Flagship process:
Clarity of purpose is investment success.
Eliminating noise with precise trend rules that adjust to any situation, climate or cycle is the goal.
Going on an information diet is mandatory.
Systematic and consistent processes beat fundamental guesses every time. Your investing will be like this video.
Investment stress is a killer. Multitasking with screens, news and nonstop predictions will fry your brain–guaranteed. We will have you focus on the right task, not every last task. Consider this infographic.
The religious rituals of the government, media and finance will bleed you dry: “CNBC really could not care less about the actual content of what is being said. The purpose of CNBC’s game is…to sell advertisements. Nothing evil or wrong about this. It’s what for-profit media companies do. But the content they are producing…needs to be understood as such.”
Deliberate practice is mandatory for excellence. Listen to a podcast with the world’s foremost expert on peak performance.
Trend Following™ does nothing until you have a great move with big profit potential. Patience is paramount, like this video.
The global Deep State governmental authorities don’t want you thinking. They want you in the Matrix: “Those who dominate the educational [system] control who is accepted and who is rejected, not by measure of intelligence or skill, but by their willingness to conform to the establishment ideal. They construct a kind of automaton class, which has been taught not to learn independently, but to parrot propaganda without question. Those of us who do not make the grade are relegated to the role of obliged worshippers; accepting the claims of the professional class as gospel regardless of how incorrect they happen to be. The whole thing is disgustingly inbred.”
Consider a non-trading example that explains the truth of process v. outcome: “Instead of talking about wins and championships, Alabama Head Football Coach Nick Saban speaks about the process. The process is Saban’s term for concentrating on the steps to success rather than worrying about the end result. Instead of thinking about the scoreboard, think about dominating the man on the opposite side of the line of scrimmage. Instead of thinking about a conference title, think about finishing a ninth rep in the weight room. Since Saban has won 5 of the past 13 national titles, the phrase has morphed into the mission statement for Saban’s program-building philosophy. Today everyone is trying to replicate his philosophy and results. Call it the Sabanization of college football.”
Famed contrarian investor Howard Marks speaks to that quest for greatness: “The real question is whether you dare to do the things that are necessary in order to be great. Are you willing to be different, and are you willing to be wrong? In order to have a chance at great results, you have to be open to being both.”
The Trend Following™ race for you is on whether you run or pretend there is no race. One of Michael’s favorite sayings paints the picture: “Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running.”
Ready to start running?
To purchase go here.
Trend Following™ can not promise you will earn the returns of traders, charts or examples (real or hypothetical) stated. All past performance is not necessarily an indication of future results. Data presented is for educational purposes. Our products are also provided for informational purposes only and should not be construed as personalized investment advice. All data on this site is direct from the CFTC, SEC, Yahoo Finance, Google and disclosure documents by managers mentioned herein. Trend Following™ assumes all data to be accurate, but assumes no responsibility for errors, omissions or clerical errors made by sources.
Our testimonials are the words of real clients received in real correspondence that have not been paid for their testimonials. Testimonials are sometimes printed under aliases to protect privacy, and edited for length. Claims have not been independently verified or audited for accuracy. We do not know how much money was risked, what portion of their total portfolio was allocated, or their exact positions. We do not claim that the results experienced by such clients are typical and you will likely have different results.
Trend Following™ is not registered as a securities broker-dealer or an investment adviser. This information is not designed to be used as an invitation for investment with any adviser profiled. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund.
Further, Trend Following™ cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing.
Additionally, Trend Following™ in no way warrants the solvency, financial condition, or investment advisability of any security or instrument. In addition, Trend Following™ accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as a basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.