There are no hollow promises [on TurtleTrader.com]. Instead, every statement asserting the power of these methods is backed up with empirical data and coupled with the caveat that the key to trading success is discipline, trading the markets every day and money management (or to ‘preserve capital until more favorable price trends reappear’). This site offers no comfort to those who are looking for a quick buck or the Holy Grail, and the proprietors don’t seem to suffer fools gladly. The message is open, honest, straightforward and makes no hyped-up promises. It sticks to the facts; it is one of the best system trading sites for futures traders I have seen.
Gibbons Burke – Futures Magazine Review
Director of Technical Analysis Products
Dow Jones Markets
Effort is looked at by all and judged by few correctly. You are judged as with good intentions and integrity.
for Phantom of the Pits
Mr. Covel, ‘The Complete TurtleTrader’ book was the first trading-related book that I stumbled upon, so I remember it well. Since then, I have spent countless hours reading and researching the markets and trading ideas. I have looked at many different methods, but I keep coming back to trend following as the best long-term method for investing in the markets. Your trend-following book provides ample evidence and reasoning regarding the timeless principles trend following employs, and I think it should be an essential read for any aspiring trader. Your free newsletter is one of the newsletters that I always read, especially since the “comments” section usually contains robust conversations. I have also watched your film Broke; as a college student graduating in May, I wish the film was shown in every economics class.
Dear Mr. Covel, Between last Christmas and the New Year I reviewed my trading in 2009. My main account trades options delta neutral, theta positive strategies and it went flat. I have to say this result is really not bad as it’s mostly a trending year. I have a famous mentor on this and have seriously traded it for three years and am still not successful. I realized the market has many chances to do unexpected moves. That’s why neutral income trading is hard to do consistently. My second account is a small Forex account utilizing trend following strategies and that performed extremely well, up 400% with less than 20 trades. And I spent only about 5% of the time for this compared to the main account. I wonder if it’s only luck, for such a good performance. After the annual review I thought I need to do more research on trend trading. So I went to Amazon.com searching for books regarding trend following and found your book ‘Trend following’. I was really exciting while reading it as every chapter is so wonderful. It exposes many great trend followers and their long term performance data. That greatly convinced me that trend following is a valid strategy. From the book, I learned successful trend followers only trade technical, make no predictions, follow big trends, have good money management and are very disciplined. I then read your book ‘The Complete TurtleTrader’ and that is amazing too. It makes me more confident that everyone could become a successful trend follower if he or she works hard on it. Thank you so much, Mr. Covel. Your books give me great education and confidence on trend following. I won’t forget you if I would be successful in the future.
Michael, I have only read your books but I think they are as good as they come in finance. They are as good, if not better, than the Market Wizards books by Schwager and Leferves “Reminiscences of a stock operator”. They are an absolute read for anyone with a job in finance. I recently quit my job after 10 yrs as a trader at Morgan Stanley to start my own hedge fund, together with a colleague of mine. A majority of the risk in the fund will be allocated to trend following concepts in various time frames of stocks, sector and index futures.
Michael: As a subscriber to your original course, and occasional fan writing in, I must say, what a great text! I am referring to the latest edition of ‘Trend Following’. After it came in the mail, I devoured it over the course of the last couple of days, and what coincidental timing, it served as a refresher, and has helped me stay on track with my own trading (Yes, in the past I’ve taken “hits”, but I turn them around, an outcome less due to me and more due to the risk management stressed by the trend follower approach). A few years ago, that would have been a devastating loss of a limb as opposed to the temporary pain of a pulled muscle, all in service to the ego and the desperate need to be “right”, even when the account equity says you’re “wrong”. In fact it was just such a loss several years ago that led me to your course over three years ago, which, funny enough, as I think about it’s “great expense”, has repaid itself many times over in various trades. As for what some reviewer noted on your website, dismissive of trend following, it’s very clear he didn’t do his homework (As an aside, may I say you have no need to defend your work with retorts or responses, so please consider what Mr. Ed Seykota might say about your exchange with him and ask yourself what you are getting out of any “back and forth” exchanges). We know such reviewers get a paycheck no matter what, and are therefore indifferent to your work, and produce “critical” reviews lacking critical thought, driven by conventional thinking and a deadline, which are a disservice to all. Your work, and the results of it’s most focused and disciplined practitioners have, and will speak itself in favor of trend following. Those who can’t think for themselves might not be among your potential readership anyway. As an aside, I recall a chart you presented once about Mr. Dunn’s results, during his rough patch earlier this decade, and I was reminded by your coverage of Mr. Dennis’ trading history in your work, and what some of his students and successors were counseling in terms of the trading sizes… that anything is possible, a temporary “bad patch” might have been encountered by his system. And indeed it was proven to be the case, just temporary. So, even if such empirical “proof”, as Mr. Dunn’s brief downturn, might be used by those who were too lazy to read your books and dismiss you, you would see in due time overwhelming proof to trump such data cherry-picking of drawdowns and brief “rough patches”. The bucking bronco that shakes a trend follower about at times eventually leads us to greener pastures. Could we say that for the latest incarnation of LTCM? Recent news of a new bond arbitrage fund, a third go-around for its founder, after bombing over a decade ago and prompting the first of many Moral Hazardous bailouts, followed by a closing of a second-firm in 2009, might succeed (anything is possible) but may I point out that Mr. Dunn and others like him (Jerry Parker and Salem Abraham) never needed a “bailout” or a fresh (re)start, just time and the risk management disciplines of true trend following. Thank you for your fine work, it helped give me tools to navigate through market waters both calm and/or treacherous.
I have been an avid follower of Michael’s work for many years. I have all of his books, his trading course, as well as 3 market Wizard DVD’s. I can unequivocally say I feel like I have got MASSIVE value out of all of these. Michael’s teachings and practical advice have kept me grounded and focused in an environment where most are paralyzed by “noise”. As a fairly new player in the industry, it has sped my learning curve. Never mind how much money these teachings have made me, their biggest benefit so far has been how much they have SAVED me. The principals of position sizing/risk management and reacting to what IS happening (without the egotistical need to explain why) helped me sail through the GFC relatively unscathed in terms of my portfolio. Mike’s writing is professional and informative, his DVD’s inspirational and professionally made. He truly has access to some of the greatest trend following minds around, no mean feat given the majority of these players shun the public eye. I have find his guidance from afar extremely helpful.
Michael Covel has been the major influence for me in my search for the investment strategy that fits my beliefs. As a lot of investors [do] i started out searching for a holy grail method, but after a lot of losses in mutual funds i bought Michael’s ‘Trend Following’ and ‘TurtleTrader’ book and the concepts just jumped of the page and struck a chord with me. As markets move downwards roughly 1/3 of the time who wants to be in a ”vehicle” that can travel only one way? Keep up the great work Michael and thanks again!
Christian van den Boogaart
Dear Michael, I have been a follower and a student of Trend Following since 1998. I was first introduced to Trend Following by a friend of mine working as a proprietary FX trader for a global American investment bank who had an office in my home town of Sydney Australia. He has since moved on from being a proprietary gold Bullion trader, to now becoming the principal of his own Hedge fund. I was introduced by this friend to “the Turtle Trader” rules at the same time, and have gone on to prosper and generate an incredible and awe inspiring life for myself and now my young family. This has all come about through firstly instilling all the rules,principles,and psychology of the system known as “Turtle Trader”. The principles and system of technical Analysis based system trading has made an impact on many areas of my life, including: financial,spiritual, and physical improvements. This has come about by what I personally believe is the “complete” commitment I desired and now have to live a completely satisfied and grateful lifestyle. I believe I would not be in the fortunate position myself and my Family are in today if it was not for people like yourself Michael. Your contribution to Trend Trading is such a marvelous basket of awe inspiring products, which can only benefit those who really believe in creating contribution to those around them, like ourselves. Gone forever from my life is the “Blah Blah Blah”, of thinking that I will “never be satisfied” with my current position in my life. Living life with my favorite Commandment: Thou shalt Not Judge. As I am a true believer in Technical Analysis based System Trading. I thank you for keeping the flame well and truly alight on spreading the Gospel of Trend Following.
From Down Under,
Trend Trading Disciple
Dear Michael, Here’s my testimonial for your trading system course: Many years ago, before I learned about how Richard Dennis and William Eckhardt breed traders like “turtles” and Michael Covel educated the World on the “trend following way”… I was a losing trader and cursed – “cut my profits short, hold onto the losers” all the time. Soon I found trading like that could bankrupt me very quickly, then I found out about Mike’s Turtle Trader website and his trading system course. I have to thank Mike for his in-depth research on this subject and a proven way for traders to make money – simply by following the trends (not that simple for most, really). Today, I could make profits from the market better than I could ever imagine, using my own developed trend-following based methodology. And I must admit that Mike’s trading system course has made positive contributions to my success in trading and managing my students’ money.
Dear Michael, I just finished reading ‘Trend Following’ and thoroughly enjoyed it. The timing was pretty interesting: I actually bought the book (the latest edition) about six months ago, and it had been sitting on my shelf along with a bunch of other investing books. I had never opened it, and for some reason I thought it was a lot more “technical”, as I have been reading a bunch of TA books. Those were GOOD, I was just a bit burned out on the subject. Besides, I’d adopted a trading strategy “of my own” that incorporated some basic TA techniques (moving averages, mostly, and trend analysis/crowd psychology), some value investing fundamentals (Peter Lynch-style), aggressive risk management, Internet message boards (believe it or not, lol) and my own previous several years of miserable failure (as good experience of what NOT to do if I want to make money I could probably write the book on the most possible ways of losing money.) So I was actually reading Ken Fisher’s book The Only Three Questions That Count at the airport cell phone lot while waiting for my daughter to call from the pick-up area. When she called, I hastily stuck the book down by my left foot (I drive a Boxster — there wasn’t much room for it elsewhere) and took off to pick up my daughter. Of course, when I got out of the car to help her load up, the book fell out. I realized when I got home it was gone, and I need to read something, so I grabbed Trend Following off the shelf, and WOW. As I turned the pages, I found a really good description of pretty much what I had been doing for the past year in the market with simple stocks. Granted, the market has gone straight up, but it did take a modest amount of cojones to get in last March at the bottom, and then stay in despite some nice gains (and it wasn’t that I had no fear of losing them.) I “got it” about trend following, before I knew that label. Even the risk management part was there, except I’ve done it all by seat-of-the-pants rather than computerized signals. And I’m even a computer geek, but ironically, I’ve never used computers for anything financial. I wrote and sold system software (a C compiler for 8-bit microcomputers that I wrote in 1979), and kept all my sales records by hand in a paper book. Go figure. So, basically, the book has validated for me everything I had concluded about what actually works when it comes to trading, and I no longer feel like I’ve just been “lucky” (although luck has definitely played a big part in my Peter Lynch-esque discovery of stocks like GMCR four years ago). Instead, I know that if I keep applying the philosophical principles that have been working for me, much as you outline in the book, I’m likely to keep on doing pretty well. Great stuff.
St. North Reading, MA
As a trader for 5-6 years I am still learning new and important things every day. This is why I looked into Michael’s ‘Trend Following’ Book. I must admit that my expectations for it were not too high, but it not only exceeded my expectations, it dusted them. The content was very well written and its importance is undoubtedly immense. This led me to purchase his Turtle Trader Book and this is also well worth reading, even though I prefer the Trend Following Book! Since I like his books and think his turtletrader.com website is awesome, I had to also check out his DVD and I can wholeheartedly recommend it to anyone who is serious about getting some quality info about the credit crisis and how you can profit from it. Mike, keep up the great work!
Michael, I am not a well known trader, but I do credit your two books, along with Jack Schwager’s first two Market Wizards books, as being essential to my transformation into a consistent, winning trader. Back in 2008, I was a recent college graduate employed at the world’s largest mutual fund company. While earning my Series 7 license, my job was to talk to students all day on the phone and provide them with whatever service they required. Consequently, I was the reassuring, “voice of reason” they would hear when they called us during the Fall 2008 market collapse. I spent those days talking to retirees who were losing their life savings, confused traders who up to that point had never experienced a bear market quite like the one we were experiencing, and uninformed, American workers asking me why their 401ks were down so much. We were told to feed them lines like, “You haven’t really lost anything until you have sold” and “Prices going down just means it is a better time to buy.” I heard the fear and pain in our students’ voices and, even then, I knew I wasn’t helping by telling them what they wanted to hear, but I did not know what else to tell them. As a result of this experience, I vowed never to let myself get into that situation. I knew that with so many people losing money, there had to be investors out there making that money on the other side. My mission then became to find out who these winning traders were and what they did to put themselves on the right side of the trade. I left that company, and with it, the “buy and hold” mindset they employed. I started doing my own research and reading, and one day came across your book Trend Following in the bookstore. I was immediately drawn to its subtitle describing how I could learn to make millions in up or down markets, and left the store with the book in hand. Over the next couple of days, I devoured its contents, feeling like I had stumbled across the secret I had been searching for. This was the winning philosophy I needed to study. Around that same time, I also read Jack Schwager’s Market Wizards books, and particularly enjoyed the Richard Dennis interview which described how he taught a group of traders how to become systematic trend followers. Once I saw that you had written another book telling the story of these “Turtles”, I immediately started reading it and saw for the first time how a very simple strategy could yield consistent, high profits. This was my turning point. Fast forward to the present day. I am free. I am no longer a slave to the markets or the financial media. While it seems the majority of the trading world is still obsessed and fretting over what the market will do next, I relax in knowing that the price and my systems will lead the way and put me on the right side of any major move, and I have your two books to thank for helping me get to this point. My goal is to become a “Market Wizard” myself, and it is trend following that will get me there.
St. Petersburg, FL
Michael, I have read both of your books and it wasn’t until I had, that I understood position sizing, using volatility based risk parameters and equalizing all trades regardless of the instrument, i.e., coffee, T-notes, Gold, etc. I had read both Market Wizard books many times looking for the information you so clearly presented. I have been a trader for over 20 years and am constantly confronted with the idea that the more I learn, the less I know. Your books and Mr. Taleb’s have contributed to that learning. I purchased Van Tharp’s book on Definitive Position Sizing and now have a firm grasp on using volatility to determine risk. Your web site is excellent. I have been following you for several years and the content as well as the ease of maneuverability are first rate. Keep up the good work!
I first met/listened to Michael speak at an investors’ conference several years ago, and that was one of the most useful sessions I have ever sat in at ANY conference (and I’ve been to quite a few in my career)! I had previously read books like Market Wizards by Jack Schwager; but it was only after listening to Michael and reading his book on trend following that I fully appreciated how/what/why trend following should be greater considered in investing. I am still a novice and trend following doesn’t come naturally to a traditional/”fundamentals”-based stock investor, but Michael’s work has definitely been an eye-opener.
I have read and studied both ‘Trend Following’ and ‘The Complete Turtle Trader’ and have been inspired to take action and begin trading following trends. What really convinced me to follow this path is I recently met a private independent trader that has been successfully trend trading for over five years using your methods. He even showed me his dog-eared copy of ‘Turtle Trading Techniques’. Thank you for making me aware of the ultimate retirement plan.
Michael: As trendfollowers, we have always found your website to be informative, instructive and when the chips are down (as happens some of the time) a source of comfort and encouragement. The website is a virtual smorgasbord of information on trend following, neatly sliced and diced, to make it convenient and easily digestible. I am not aware of any other source on the net that provides as much access to the tools that are essential to be a successful trend following trader.
Director Lamron Analysts Pvt Ltd.
I have attended numerous Investment workshops across the country. Out of all the trainers, Lecturers and “Gurus” I believe that none are better than Michael Covel in making complicated concepts clear and understandable. My friends and I have always looked forward to hearing Mike speak as he delivered great CONTENT and communicated on our level. I consider Mike to be the “Best of the Best”. I don’t care how much you know until I know how much you care and I believe that Mike truly cares about his students and wants us to succeed.
Thank you Mike for Sharing.
Barry Neal, CA
Several years ago, when almost no one wanted to read what I wrote, Michael Covel published one of my pieces on Trading Psychology. He did more than that. He offered to help me with writing in a way that would be simple and easily communicated to traders and investors worldwide. Now, my writings travel around the globe and end up in places I never would have imagined. Thank you, Michael!
Janice Dorn, M.D., Ph.D.
I have been thinking quite a bit about your requests for testimonials. I just want to share the impact that your website and two books both The Complete TurtleTrader and Trend Following have had on my thinking and aspirations. When I took an original interest in investing I read a biography of Warren Buffett, I then sought to follow in his footsteps. I bought numerous books on Value Investing; I was determined to become a CFA. When I originally checked out your website, I was very skeptical. However, when I read the review by Bill Miller, I decided to see what this was all about. I read The Complete TurtleTrader first. I couldn’t believe it. I was just as average as some of these people. I thought “Hey, I can really do this!” This was almost shocking that these people with two weeks of training were able to make so much so easily. I read Trend Following next. It was even more revealing. The most shocking thing was the shear number of traders who are trend followers. Their returns are just as good as Buffett and other famous fundamental investors, but I had never heard of them. They simply don’t seem to have the respect of the media. I also realized that this wasn’t as simple I had thought, but it was entirely learnable. This book and website are the starting points. I have a new direction to take with my investing. I have to say that it was the most refreshing read on investing I have ever read. I look forward to later this year purchasing your course and learning even more. I hope to turn all of this into a career soon. Thank you for creating your company, so that others can learn to be turtles as well.
Michael, I wanted to start by thanking you for writing the book The Complete TurtleTrader. It was very insightful and taught me a lot that I am implementing into my investment strategy for my students and myself. The strategy that I am using, much like what you had said many of the turtles had to do in the private sector, is much more conservative than what they were implementing in Chicago. Also, I am not using futures for investments because they are not available with the investment vehicle my associates and I are using. Thanks again Michael! As a 29-year-old financial rep I feel like your books and ideas have given me a huge leg up on my competition now and going into the future!
Dear Mr Covel, To be honest, I had no idea what trend following was all about, nor had I ever heard anyone talk about it before attending one of your talks. As I found out after listening to your presentation, it’s been around for quite some time, and practiced by many successful investors/traders. It sounded like it was one of the best kept secrets in town! Everyone is always looking for that “magic bullet” or a “sure way” to make money, but as your books/work has shown, nothing beats sheer hard work, countless hours of testing and trading based on one’s own systems and theories, and most importantly, learning to stick to such a system rather than rely on one’s own whim and fancies. I always thought it was about who had the brains, but that only gets you so far in getting to be a great trader. Thank you very much for your excellent books, website and work to “spread the word”.
Best wishes from Singapore,
Hi Michael, I started trading the system you taught from Oct 2007, it’s been 15 months and I have been very happy with the results. Returned 9.33% (2007) and 60.85% (2008). Just want to keep you posted of my progress. I am still learning lots about myself on trading and learning to control my emotions better. You are right that it’s us who mess up the system and not the system itself. Thanks.
Peter T., Singapore
Hi Michael, I read the book ‘The Complete TurtleTrader’ and was blown away. What a great story. I have been trading for a few years and the system they used has clicked the light on for me. I am from Boston and I wanted to look up Jim Melnick and ask him some questions. The story how he moved to Chicago just to meet Richard before the add was even in the paper was remarkable to me. Amazing story that just shows, if you give the right people the tools they will succeed! Any help finding him would be greatly appreciated.
Boston Fire Department
Dear Michael, I am now, after 5 years, a competent (not yet wealthy, but soon) online FX trader, with trend-following a major component of my technique (thanks to guess who). I somehow found my way 5 years ago to your website with its surplus of posts & general market wisdom & straight talk, instantly grasping that this was essential and an oasis from the endless desert of bullshit, and it has made the difference. The psychological foundation you helped me lay with these collections of market-related info & common sense has been essential in my eventual success. I haven’t yet bought your course (I hope that doesn’t invalidate my gratitude), I just wanted to pass my heartfelt thanks, having returned to look at your website after a while of not visiting it, reminds me of how important & irreplaceable it is with no substitute on the internet. You shouldn’t just sell trading courses, you should start a college for traders…
Dear Mr. Covel, I am very happy that you decided to following up on and publish information concerning the Turtle experiment. The two books that you published are great and contain a lot of detail that is simply not contained anywhere else! For that, I thank you greatly! However, there are still some questions that I had that perhaps you could assist me with. I understand the original turtle rules but still have a couple of questions. First, do you start counting new highs after the price crosses over the moving average or do you base the count on the price itself? Second, once engaged in a new position and you get stopped out, do you continue to enter again endlessly after a new high or low has been made? I only ask this due to the fact that many trends that the original turtles looked for were not successful. Due to this fact, should a trader continue to to enter the market taking huge losses for a possible trend that may never materialize? Anything that you can do for me in this regard would be greatly appreciated.
Dear Mr. Covel, I have read both your books ‘The Complete TurtleTrader’ and ‘Trend Following’. I love the both. I remember going to the book store a year or so ago, picking up The Complete TurtleTrader and then putting it back down. I wanted to learn more about investing, trading was of no interest to me. Yet strangely enough a year later in one of my MBA classes a classmate was reading the turtle book, I began talking with him about it and soon found myself going back to the bookstore to get my own copy. I was instantly hooked, and powered through your book in two days. Since that point I have been reading and trying to learn everything I can about trading, futures, trend following and technical analysis. Through my schooling and my job I have been trained to look at companies and investments from a very fundamental perspective, even in the face of the efficient market theory. Your description of trend following made so much sense to me. Your books have exposed me to a world which I find so interesting and I now want to do what people like Salem Abraham have done, I want to make trading my life. I am now to the point where I have a system I want to test. However, I am having trouble with the script writing in Wealth Lab Pro. The drag and drop function does not seem to provide all the necessary variables and parameters I am hoping to use. I am basically clueless when it comes to programming, I have finance and accounting degree, so it is a bit foreign to me. However, I do want to learn. I was hoping that you would be willing a able to provide the script you used for one of the systems you tested in Trend Following using Wealth Lab Pro. I want to use it as an example to learn from. I think if I had a script to look at I would be able to derive how to create my own. Thank you very much for your time and your assistance, as well as writing wonderful books.
Mr. Covel, I just wanted to say hello and extend my thanks for what I considered an excellent book in ‘Trend Following’. While I have been trading for myself for quite some time now the recent market activity has taken my trading strategies and studies, as well as how I look at the financial markets in general, to new places that I would not have dreamed of a few years ago. Your books have represented a notable portion of that journey and new study. I hope to some day write you again in the future to confirm my success and give my regards once again, despite my past and current successes for now I still consider myself a humble student of trading the markets.
Greetings, I have read and very much enjoyed both your ‘Trend Following’ and ‘Complete TurtleTrader’ books — how refreshing to find such clear, concise, no bull analysis. I am interested in purchasing the training but want to make sure it is appropriate for the markets I want to begin with. In particular I am most comfortable starting with ETFs (and mutual funds — though I find myself going more with ETFs because of the liquidity). I noted that most of the trend followers were in the commodity markets — but the texts and your site seem to indicate the basic approach would work with ETFs (though the returns may not be as dramatic). Am I correct in my impression? Thanks for your consideration — and thanks again for your work. Please let me know if you need more information to respond to my question.
Dear Michael: I have been a big fan of your blog and read ‘The Complete TurtleTrader’ cover to cover and am very interested in purchasing your system available on your Web site. Currently, I am a trader a private equity company, but we do not carry overnight positions and I noticed you said your system is not for day traders. Should I take that to mean I would not gain any benefit from purchasing the trend following system or would be more useful in trading longer time frames than just intra-day?
Thanks a lot,
Michael, I’m sure you get lots of letters from emotional, maybe almost rabid followers who sing your praises. What I can tell you about myself is, you’re making a difference in my trading and I want to take the time to thank you. I got pretty ill in the 4th quarter of last year – a ruptured appendix that went for 3 days undetected and according to the medical professionals, was 12 to 24 hours away from critical. A serious infection, and two weeks of IV at home twice a day only to be followed up with a surgery to remove my gallbladder and my reality suddenly became something like thoughts of making my wife a widow at 26 years old. We all have stories and different motivations. My motivation was one for change in my life, including selling my business and starting a new life. As a trader, I’m afforded the freedom and flexibility of my time something I cannot easily put a price tag on. What I can tell you is that the prospect of that freedom is not something that I’m going to easily give up on and you’re helping me fight that battle. I can’t thank you enough.
West Palm Beach
Dear Michael, I have been reading your post and books since a couple of years. I found them priceless. And I can tell you this from my position of Fund Manager in the Spanish industry of Asset Management. I was the manager of the Fund since January 2008 until the beginning of November 2008. As you can guess because I am writing you, I use mainly trend following strategies applied on many products and different time frames..I just wanted to ask you if it is different around your network. Maybe in USA there is some thirsty for absolute return managers being trend following their core strategy (we use other strategies to “smooth” the volatility). In some way, this letter can be consider as an offer to you. I wanted to write you in another circumstances (maybe in a speech you can give to our Jurassic Spanish Asset Management industry?), but here in Europe our potential students just think that if you can earn money in any condition, it is because you are another Madoff.
Michael, Thanks to your books and website, I have been enjoying spectacular returns like other trend followers. I am very interested in setting up my own fund, but am confused on the steps I need to take with the regulatory bodies. I’ve been on the NFA and CFTC websites but am unclear on exactly what I need to do. I was wondering if you knew of anyone I could speak to or email back and forth with that could help me out and give me some guidance (almost like a mentor). Right now I have 2 solid years of performance, and wanted to get this year under my belt before setting up my own fund and marketing myself.
Hi Michael, Congratulations on a fascinating book. Ever since I read it a year ago I have been inspired and looking and working on my own systems programming and found your suggestions at the end of your book on ‘Trend Following’ for building a system very succinct and helpful. The only problem is that I keep hearing how John W. Henry has managed to build a system that works across all markets and no matter how hard I try I just cant seem to find the answer. I have systems that are good on currencies (back-tested over 30 years) but useless on indexes, or systems that are good on indexes, but useless on commodities. I have tried breakout systems (89 day with 13 day trailing stops) MACD crossovers using long and short moving periods, etc. I am a spot FX day trader profitable until this current period of volatility. I want to go automated. Any help would be greatly appreciated.
Hello, If my technique has back tested with a 100+% year last year, a 87% return in 2007 and a 73% return in 2006 I think that the technique is correct or at least on the right track. I have the discipline to follow the technique since I have always traded with a systematic type system. I was just looking for some advice to confirm if my technique is good or not. I wanted to use your expertise since you seem to have the most experience in this area. What then would you recommend for someone like me? I have the FX system and about $10,000 to trade it live. I think this is feasible due to the capabilities to trade mini lots, while using money management techniques. This is the only risk capital that I have. Please advise… Sorry if I am a pain in the neck, but I want to be on the right track as I want to trade (Trend Follow) for a living.
Dear Mr. Covel, My name is D. L. and I am reading with much interest your book about Turtle traders [The Complete TurtleTrader]. I was Pillsbury’s wheat trader in the pits from 1980 to 1983, and traded size with C&D many times. [Richard] Dennis, [Tom] Willis, the O’Briens, etc. You are correct – we (Pillsbury) were huge traders, and we had vast amounts of info at our disposal. Pillsbury was deadly when compared to the Cargills of the world in those days because we all had our own profit center trading accounts in addition to working the enormous commercial hedge balances. Cargill and the others had employees, but Pillsbury had traders. They did not stand a chance…Good job with the book [The Complete TurtleTrader].
Hi Michael, I am a Finnish asset manager and I have to say that I really appreciate your work. I only wish people would not believe you because with too many trend followers around my methods might not work anymore some day.
You [Michael Covel] may be interested in a study on CTAs [trend followers] that I published. I basically find that there is one dominant trading style in all CTA funds. That style has been called trend following style. It is not surprising that big moves occur in equities, bonds, currencies, and commodities at the same time. They are responding to the same set of economic fundamentals. I think the biggest selling point for Trend Followers is not so much that they make money, but they make money during down markets in equities. [Also] It is interesting that, when equities move down, there seem to be more and bigger trends in other markets for Trend Followers to capture. Because the profits captured by Trend Followers during these times are greater than during other times!
David A. Hsieh Duke University
While TurtleTrader.com is obviously devoted to Trend Following, what makes the method work is not the genius of the website developers, nor the genius of Richard Dennis or other traders identified with Turtle trading. In some ways, the secrecy to which many original Turtles were sworn has confused the issue of Turtle trading, making the methodology seem more clandestine and complex than it really is, while providing an unfortunate platform for less scrupulous promoters to offer the secret of Turtle trading to aspiring, yet unsuspecting, traders. As one of the administrators of TurtleTrader.com suggested in e-mail, all Turtle trading amounts to, in the end, is trend-following. Indeed, there were successful trend-followers long before Richard Dennis and William Eckhardt’s Turtle trading experiment, according to that administrator: ‘To some degree, we see the question as a continuation of the secrecy hype first revealed in Schwager’s books. Great books, indeed, but the secrecy part of Turtles and trend following was misleading…Given that so many other trend-followers were kicking butt at the same time of the Turtles’ creation…Turtle trend-following is not a secret. It simply takes proper teaching.’ And that is good news for all of us.
David Penn, Staff Writer Stocks and Commodities Magazine
John is a client. He wrote from New Zealand to express thoughts on the benefits of Trend Following trading:
Since completing your course…I have managed my drawdowns with dramatic results.
We decided an interview would be appropriate and useful for others. John agreed.
Q: Why did you decide to become a client?
To establish a systematic correlation between portfolio size, bet size and stop loss placement. Having developed various buy/sell signal systems over many years which ranged from moving average to Donchian to Neural Networks I have proved that pure signal strength is not a great indication of suitable bet size and may lead to drawdowns in excess of expectations. Such drawdowns suggest that fund longevity is compromised, therefore by reducing risk longevity is more probable.
Q: You make the strong point that not only does money management help your upside, but more importantly it protects your downside. I am sure you would agree that many new and experienced traders neglect the importance of mitigating drawdown?
Correct. There is no point in being able to make double/triple digit percentage gains only to give the same plus back to the market. To be successful you need to keep a high proportion of your gains.
Q: What was your prior knowledge of trend following?
All of the systems that I have developed have included to some extent trend following criteria. Even Neural Networks, when considering market entry and exit costs (commission and slippage) tended towards the utilization of trends to make the bulk of their gains. In markets where liquidity is high, trend following is especially appropriate as entering and exiting positions will not materially affect the market price. This however would not be the case in illiquid markets where the entering and exiting of positions can materially affect the market price. In the later situation a fundamentalist approach may be appropriate.
Q: While we make no recommendation to fundamental trading. You paint a picture whereby fundamental traders could benefit from a clear understanding of Trend Following trading.
Certainly, [Trend Following] addresses risks which can help all.
Q: What about our course enabled you to reduce your drawdown? The overall money management provided?
The linking of bet size to portfolio size/stop losses and also the growth and shrinkage of the total portfolio size including unrealized gains.
Q: Was this a comfortable switch for you? The consideration of total capital for trading decisions? Were you nervous about changing from your current strategy or was it more of a natural and logical evolution for you?
This was a logical evolution as I was searching for risk management methods. I was not nervous about the progression as I thoroughly understood the methods practiced by Turtle [Trend Followers] and then created a financial model and performed rigorous testing before adopting Trend Following.
Q: Had you been using money management prior to our course?
The money management previously used was associated with bet success probability rather than portfolio size and thus when calculating monthly percentages against capital invested, undesirable percentages could arise.
Q: Thanks for the feedback John.
You are welcome.
More Success Stories
I must say that as anyone with a pulse, I was skeptical of your site. But the more I read, the more I’m convinced that you guys are serious and professional. Your website is like a breath of fresh air in a virtual world filled with get rich quick schemes [and] trading systems. Kudos on a fantastic site, not only is it bursting with info. it is very well crafted for navigating and aesthetically pleasing.
First of all, I find your web sight highly informative and concrete. There is so much garbage out there in terms of vendors’ claims and statistically insignificant trading ideas that it’s very easy for the unsophisticated trader to get sucked by this crap. It’s refreshing to visit yours.
I am very impressed with your website. I was pleasantly surprised by the way you market your product. You suggest many educational books and studying before ever recommending a client order any of your products. I am in the process of reading a few of your selected titles.
Your web site is great and thankfully doesn’t have that crass, money grubbing feel to it. Congratulations!
Your patience and speedy replies [to my support questions] are rare in the business world today and are greatly appreciated.
I’m really impressed with all the help you’ve given me, it really has made a big difference. You should know that yours is the only program I’ve purchased. I’m exceedingly skeptical – 99.9% of the crap peddled as systems or in books is at best incompetent and at worst criminal. So it took about a week (and reading every single page of your web site) to purchase your materials, but they showed consistency and logic and common sense. I am glad I did – I have really learned a lot.
I appreciate the questions/support aspect of this package very much. I have recently decided to go on my own, and make a complete commitment to trading with the intention of forming hedge or futures fund once I gain more experience and a track record with my own account. My point is that I take this seriously, and I appreciate the help.
The section on money management will save me the purchase price in losses. After two or three reads, the section on risk and expectation clicked. Is was like a light coming on.
I have been looking for a 100% systematic approach to trading that followed trends. Once I read about Trend Following, I knew that’s what they were taught, and I wanted to know what they knew. These methods are what I’ve been looking for ever since I started in this field. I appreciate your patience and information that you have provided. Once again, thanks for the help you have provided.
I’m backtesting the data you sent me [with the full package and it is a] very impressive amount of information.
I have to thank you for your service. I have been involved in the trading arena since 1995 and have at different times been a broker and trader and have been witness to some of the biggest hypes ever devised. I have seen droves of unsuspecting people being led to the slaughter by unscrupulous marketers, themselves having only the tiniest bit of trading knowledge or experience, pushing the latest Holy Grail. With this overview I’ve become very pessimistic of any type of trading program. It took me a long time researching your site before I finally bought the program. It was the greatest investment I have made. Before your program, I have bought and read countless books on trading and never has the information on money management been addressed like you do here. Definitely the most important issue in trading. It took me a while to shake the market entry and timing bug and focus on money management but once I did it created a simplified trading process and makes it much easier to stomach being in the markets. I am still chewing on a couple of the techniques and refer to the manual frequently but believe, in time, they will all become second nature. Thanks again for standing up and putting out a program that is real and keep up the great support.
I’d just like to ‘share’ a bit here. I’m an ex-Goldman employee and worked in the big bad world of banking for six years. Not only do you guys have the confidence to tell it exactly how it is, which to my mind means it’s REAL (makes a nice change), it seems you’re not too keen on Goldman, which makes me feel so much better. It kind of indicates to me that my hunches and instincts about that firm were right, or at least that I’m not alone in my suspicions about it. Load of hype eh?! I look forward to hearing from you, and indeed to learning your methods and putting them into practice. Keep up the good work!
Took a few minutes earlier today to look at your site. WOW! Now that’s the power of the Internet! Loved it! It sure is thorough and informative. I plan on going back when time permits. I’ve always loved the futures markets and trading. I’ve been a small time speculator, on and off, for years. I haven’t been active for several years but it’s still in my blood. What do you think? Is it too late for a 45 year old to make a career move as drastic as going into trading full time? I’ve always had the fever for this industry. Thank you for your time, and for putting forth a GREAT product.
I am an Italian trader and I want to offer you my congratulations. Your site has all the right concepts about trading, not like so many others. People use fundamental analysis, technical analysis (methods like Elliot, Gann, Fibonacci, pattern recognition and other technical indicators that are completely useless) or new technology like neural networks or genetic algorithms because they want to predict markets, control the market and because they do not know the really important things for trading success. We must have rigid money management rules and control volatility. If we do not do this and the market go against us, we will lose.
Thank you very much for the suggestions! I truly appreciate the quick and to the point responses. If any potential customers have questions in regards to client support, I will gladly recommend the site and acknowledge the professionalism of the staff. I will paper trade a few months and then start with stocks and mini contracts as suggested. If you need any references in regards to the follow-up support that you provide, again I would be happy to answer any skeptics!
It always amazes me how few people make any money at this game even though successful methods are available. The reason is that MOST PEOPLE AREN’T TRADING TO MAKE MONEY. They think they are, but the fact is they’re trying to fulfill some other needs: for excitement, gambling, feeding their egos, being right, being clever, outsmarting somebody, sharing their score at the next cocktail party. Meanwhile, Trend Followers (and others) are sitting around, ignoring all the chit chat, all the arguments pro and con, discussions of the Fed, etc., just plugging in their numbers, managing their money, with discipline, and watching the cash pile up over time. There is what you must do to make money trading. There is a plan, a methodology that works and if you DO it, if you WORK the plan, you make money. That’s just how it is, but most people are more interested in trading some method that feeds their other needs: they want to pick tops and bottoms, they want riches overnight, etc. It’s like [Richard] Dennis said, you can publish the rules in the paper and people still won’t make money. Someone said you can publish tomorrow’s closing prices in today’s paper and people STILL won’t make money because they’ll put their own garbage in the way. It’s really a wake-up call when you realize that successful trading has nothing to do with forecasting the market. Something I fortunately learned early on is that it is a numbers game: knowing the risk, knowing the odds, and placing your bets accordingly. And it’s NOT glamorous. It’s NOT exciting. It’s NOT cruising in your Ferrari down Wall Street and flashing your Rolex. It’s just playing the numbers with discipline and doing the hard thing – the uncomfortable stuff that no one else wants to do. That’s what makes money and it’s why most people don’t. They’re not interested in making money. They’re not interested in being successful traders. That’s not their real motivation. If they really wanted to be successful traders, they would be because the information is there, the opportunities are there. But it doesn’t work the way most people would like to THINK it works and so you can show them what works, you can give them the methodology, and they don’t care. They don’t want it. It doesn’t fulfill their needs. Trading is for one thing — taking money [profits] out of the market. Any other needs you have, you better get them fulfilled elsewhere. But people bring their needs to the market and want the market to fulfill them. That’s why they get killed over and over again.
Mark M. R.