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Ep. 231: Two Centuries of Trend Following with Michael Covel on Trend Following Radio

 Two Centuries of Trend Following with Michael Covel on Trend Following Radio
Two Centuries of Trend Following with Michael Covel on Trend Following Radio

Please enjoy my monologue Two Centuries of Trend Following with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

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Ep. 230: Mark Minervini Interview with Michael Covel on Trend Following Radio

Mark Minervini
Mark Minervini

My guest today is Mark Minervini, a technical analyst, acclaimed author, instructor, and independent trader. He has over 30 years of experience in finance, and was featured in Jack Schwager’s Stock Market Wizards; Conversations with America’s Top Stock Traders.

The topic is his book Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Mar

In this episode of Trend Following Radio we discuss:

  • Importance of influences outside of the finance world
  • Minervini’s atypical background in music and how he got to where he is today
  • Capturing ‘super performance’ and the trend
  • The importance of cutting your losers short
  • How Minervini spends his day
  • Richard Love and ‘super performance’ stocks
  • Why Minervini is not a fan of diversification beyond the minimum amount that you can get away with
  • Richard Donchian, Jesse Livermore and their influence on Minervini
  • Timeless strategies
  • Paul Tudor Jones and ‘losers average losers’
  • The importance of not just trading what you know
  • ‘New high ground’ and not being afraid of buying higher highs
  • Risk management and bet sizing
  • The biggest areas where new traders often start off on the wrong foot
  • Howard Lederer and poker players as an analogy to traders
  • Why you shouldn’t even turn on the television as a stock trader

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Minervini

Ep. 229: William Adams Interview with Michael Covel on Trend Following Radio

My guest today is William Adams, a private trader and systems developer. He is based in Zurich and works with institutional clients.

In this episode of Trend Following Radio we discuss:

  • If Adams views himself as a trend following trader
  • Why the word futures can be problematic
  • Broad diversification and diversifying on a number of different tiers
  • Risk-based diversification
  • Why making sure you’re in the game is the most important factor
  • Why every business is seasonal
  • Why price is the most important aspect to a trade
  • How Adams has (or doesn’t have) the “expertise” to trade certain markets
  • Informing your system of various events as a quantitative or systematic trader
  • Thinking about Adams’ strategy in the context of evolution
  • Core baskets vs. satellite baskets
  • The adaptive aspect of what Adams does
  • The philosophical and operational aspects of volatility
  • Average true range as a volatility measure
  • Trading to make a return vs. trading as an economist
  • Adams’ greatest areas of challenge and frustration
  • Michael Lewis and whether the markets are “rigged”
  • Execution strategy

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The Mechanical System Light Bulb Moment!

A recent email:

…read your book “Trend Following” on the plane. Your style of writing is amazing simple, clear, and direct. I used to be a journalist in the Marines so I appreciate well written thoughts. I especially love the stories and analogies you’ve captured. They are truth to me and have started the mindset shift I need to receive what trading has to offer. I’m not a college graduate. Just a simple knuckle-dragger who goes around Southern California to close deals and consult. I went to college to learn how to trade (never did and never finished). Since 1991 that’s all I’ve ever wanted to do–trade. Don’t know why, it’s just been calling me for years. Without being too long winded, I stumbled across Courtney Smith’s mechanical trading strategies. I never fully grasped the magnitude of mechanical trading until reading your work and I’m grateful and thankful to discover it. I look forward to riding the bucking bronco until I die. Thanks again for everything.

Welcome! More Lightbulb moments here.


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 Podcast Guests
Frequently Asked Questions
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Research
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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.

Ep. 227: Justin Fox Interview with Michael Covel on Trend Following Radio

Justin Fox
Justin Fox

My guest today is Justin Fox, an American financial journalist, commentator, and writer born in Morristown, New Jersey. He is a Bloomberg Opinion columnist and former editorial director of the Harvard Business Review Group and business and economics columnist for Time magazine.

The topic is his book The Myth Of The Rational Market: A History of Risk, Reward, and Delusion on Wall Street.

In this episode of Trend Following Radio we discuss:

  • Harry Markowitz, Bayesian statistics, and making smart decisions in an uncertain world using quantitative tools
  • Stocks, beta, and the importance of making useful predictions
  • Commodities Corporation and trend following trading in the early 1970’s
  • Why a market in which everyone was rationally anticipating the future would be a random market
  • Amos Hostetter
  • How the behavioral mindset started to unfold in the 1970’s
  • Eugene Fama and the efficient market hypothesis
  • The Capital Asset Pricing Model
  • Why well-designed markets and well-informed investors are prone to manias and panics
  • Individuals making errors vs. the group getting it right

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Justin Fox

I Give You The Head Start Trend Following Advantage

A recent email exchange:

Michael, How well does your system perform? What is the rate if wins over losses? What is the largest gain and largest loss on all your trades? What is the average length of time in a trade? What is the average gain of all your trades? I am trying to get an idea if your system will benefit me.

Thank you.

Sincerely,
Marcus

Beyond details here a few extra points to the service I provide:

    1. Classic trend following systems.
    2. Winners will typically be 3-4 x the size of losers. Winners typically 30-50% (of course “expectation” is the issue, not “winners”).
    3. Portfolios can vary, performance will vary.
    4. Risk/reward are related, so the end user can try to achieve a greater or lesser return. Drawdown of course related to these choices, and will vary too.
    5. Trades can be stopped out in days or weeks. Winners could exceed 1 year.

Are you a trend following trader now?

Mike, I don’t know what it takes to be a trend following trader. I have read all of your books, and I still have yet to get an idea of what your system is like. Most I read is about how well people (like the turtle traders) do, but not very much substance. I have been scammed multiple times before so I am very hesitant to buy anything that has not been tested out.

Sincerely,
Marcus

If you think my world is a scam please don’t join up. Just want to be upfront. I am simply giving you a head start and charging for it. You could figure it out on your own, but might spend years. There is no Holy Grail, it all takes work, but I do help people get there faster with actual systems they can apply.


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.

Trend Following and Controlled Baseball

Feedback in:

This post [below in italics] brings up some thoughts on selling trend following. Selling the logic of how and why it works doesn’t seem to pump people up enough to get them to try it. Its a story people don’t want to listen to even if it’s true. When it comes to investing, I feel people want to buy something that caters to their laziness, them wanting to feel cool or safe. I find it funny when trend traders scratch their heads wondering why more people aren’t investing this way. But the psychology that keeps them from investing in it is the same psychology that provides trend following profits. To me, it’s an interesting paradox.

Kanri Yaku (by S. Godin): Literally, “controlled baseball.” If you’re playing this way, it’s by the numbers. The manager tells you precisely what to do, and you do it. There are algorithms for when to bunt, for when to throw a ball. And there is no room for surprise. It is ground out (not a pun), controlled and predictable. Kanri yakyu will often get you into the playoffs. It rarely means you’re going to win the big games, though. The secret is being able to play this way when you need to, but being brave enough to leap when it’s least expected. Just like your career.

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.

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.