I finished up listening to your podcast with Mike Lofgren on “The Deep State” and felt the urge to just thank you for a very interesting, informative, provocative, but essential discussion. Ironically, the issues you discussed are standard dinner table topics for me and my family (I’d consider ourselves different from the norm in a good way). Unfortunately, today’s farrago of reality TV shows, sports, and social issues have become red herrings to the more important topics. Why discuss the vexing and complicated issues when we can just talk about the Kardashians or whether bathrooms should be genderless?… At any rate, look forward to more discussions on your podcast.
PS: I have also been working in investments for a couple years but would could consider myself a “new” trader. At the end of your podcast you mentioned you’d send some trend following steps. I currently use a nuanced Tom Demark Indicator system, but I’m always open to learning something new.
Please enjoy my monologue Making Money Every Month Is Fantasy with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.
In this episode of Trend Following Radio:
Long Term Capital Management
Bernie Madoff
Leverage
Diversification
Indian Stock Market
“Leverage doesn’t matter in this case. Such consistency with low drawdowns goes against nature and cannot exist if it trades long enough.” Michael Melissinos
The following story passed along from an associate is “pure Seykota”:
“I attended a day-long seminar in February 1995 in Toronto, Canada where Seykota was one of the guest speakers. The WHOLE audience peppered Seykota with questions like: Do you like gold, where do you think the Canadian $ is headed, how do you know when there is a top, how do you know when the trend is up etc.? To each of these, he replied: ‘I like gold—it’s shiny, pretty—makes nice jewelry’ or ‘I have no idea where the Canadian dollar is headed or the trend is up when price is moving up, etc.’ His replies were simple, straight-forward answers to the questions asked of him. Later, I learned through the event organizer that a large majority of the audience (who paid good money, presumably to learn the ‘secrets’ of trading from a market wizard) were not impressed. Many felt they had wasted their time and money listening to Seykota. Seykota’s message couldn’t be clearer to anyone who cared to listen. The answers were found in the very questions each person asked. Don’t ask, ‘How do you know the trend is moving up?’ Instead, ask, ‘What is going to tell me the trend is up?’ Not, ‘What do you think of gold?’ Instead, ask, ‘Am I correctly trading gold?’ Seykota’s answers effectively placed everyone in front of a huge mirror, reflecting their trading self back at them. If you don’t even know the question to ask about trading, much less the answers, get out of the business and spend your life doing something you enjoy.”
How would you have reacted to Seykota’s speech? Walk out or be curious? Think about it.
Feedback in:
I wanted to reach out and thank you for the books you have written. I will admit I’ve read them all from obtaining them through the library system, but I now believe I will buy them as resources to reference. The “Trend Following” philosophy clicked immediately with me and listening to your podcast has really enlightened my mind considering I’ve been typically listening to Motley Fool for my job as a Financial Analyst. In a short period of time I feel I can see through the garbage that is filling those podcasts. I still listen to keep up with my CFO, but feel as if I’m a lone wolf at work with a strategy that none of them could ever understand. Within weeks of reading on Ed Seykota I have already programmed an entire Google Doc to automate my buy/sell/risk/data pull just by typing a ticker for what I want to trade. Kudos to you for following this path and providing the knowledge to us for consumption. I hope to continue to follow your path as you continue. If you are ever in Colorado feel free to check-in with me and see whether I’ve hit life changing levels yet.
Almost finished your “Trend Following” and noticed there are…[some] people having negative issues with trend following. Well, I can tell them something…
In 2006 I started with 20,000 USD, no trading training and I [took training]. The key here is that I had no trading education. In Oct 2008 I made 300,000 USD and after 7 years of trend following I turned the initial 20,000 into almost 800,000. I then thought I know how to trade and started day trading and then (as many traders before me) lost everything. I [then] came to the conclusion that I knew nothing about trading… expensive lesson for me, but I knew what was possible [with trend following].
I have for the past year gone through an extensive training process [books and a course with (name)]. I still get the [name] data every day and will soon start again. Obviously I know a lot more than before, but the important thing is that I could turn 20,000 into almost 800,000 (drawdowns, etc. included) and I made money on ONLY 35% of my trades, that is without ANY formal trading knowledge, just following the trend.
So, no one [will] tell me trend following does not work, is dead, or anything else. It is alive and well and will be forever.
I just wanted to give you my feedback. I truly love the content of the podcast, it has strengthened my trading skills and allowed me research profitable trading strategies.
I have read all your books and I am a big fan of your work. Something you said in one of your recent podcasts was “make art, because life is short” and this really resonated with me. I want to build something special and I that is my current focus. How can I make a bigger impact on the world.
Anyway, my feedback is that while the content is great sometimes the interviewees are difficult to hear. I’m not sure if it is because you are using a Skype recorder or if you have another tool. Other podcasts are more crisp and easy to listen too.
I don’t know if a mixer would help but I wanted to at least let you know my thoughts. I appreciate your work and I’m not trying to be critical just providing feedback.
Hope all is well.
[Name]
Thanks!
My voice is easy to control. We keep that audio consistent. Unfortunately, guests can be problematic due to their microphone and or Skype connection.
Unfortunately, people are not clued in to worry about sound yet.
Do I turn away interviews with Nobel Prize winners cause of not perfect sound?
I really enjoy your podcast and thank you for doing it. You are spot on and have added a lot of value to my thinking and challenged limiting mindsets I wasn’t even aware I had.
It would be really helpful if you talked about drawdowns and your “process” for getting through them and overcoming the standard human emotions they generate. Assuming someone is doing everything perfectly in their trend following execution (proper position sizing, diversified, ignoring the news, not looking at charts, using risk capital, etc.), do you have a process for getting through a drawdown when time marches on so slowly and our impulses are now now now?
Let’s say you believe trend following works how do you keep yourself sane and unemotional during difficult stretches. Do you have a process you use?
Thank you!
Kind Regards,
[Name]
Have you listened to all of my Basso, Faulkner and Seykota podcast episodes?
All of the psych pros across my podcast, i.e. Odean, Kahneman, Statman, Ariely, etc.? That’s just a few.
Just want to drop you a quick note to tell you that I enjoyed listening to your last podcast with Simon Black. Some of his thoughts resonate with mine – such as being responsible for oneself and not “hope that the government will make it right”. Big thanks for sharing such insightful interviews for free. It’s inspiring.
