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Tag: feedback

Michael Gibbons: There Is Only the Current Trend and What Is

Posted on by Michael Covel

Feedback in from Michael Gibbons of Gibbons Trading:

As with most things in trading, the least accepted methods are also the most efficacious. One of the least accepted trading methods by both academia and the financial media is the concept of trend following. In it’s most elementary form, trend following is about being long when markets are rising and being short when they are declining. There are no forecasts or shoulds. There is only the current trend and what is.

One of the most effective journalists to popularize trend following is author Michael Covel. He almost single-handedly has raised the consciousness of investors around the world to the effectiveness of trend following. He has brought many of the world’s greatest trend followers to light, and I cannot thank him enough for that.

If trend following was widely accepted, there would be no need for about 95% of the people employed in the securities industry. Needless to say, this fact alone is one of the main causal reasons that trend following is out of the mainstream. Most simply ignore it’s incomparable track record in both rising and declining markets.

Michael Covel has provided the research and the data to a mass audience to show what we trend followers are all about. I cannot express properly how grateful I am for Michael’s efforts. His impeccable journalism is rare in any context, but especially in the field of trading and investments. As a result of his work, the great achievements of trend followers can no longer be ignored nor viewed as just an anomaly.

Michael R Gibbons
Managing Partner
Gibbons’ Trading LLC

Thanks Michael.

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Richard Dennis Trading Misrepresentation

Posted on by Michael Covel

From a reader:

Michael, I am interested in learning about trend trading and read a lot of amazing things about the turtles. However, I tried to find something online about Richard and his staggering losses during the late 80’s and 90’s. Maybe I am missing something here, but is there a reason that his system was not working after a certain period? Is there an article or resource you could point me to? Thank you.

Your premise/predicate is off. You got it correct that Dennis had losses, but you need to see the whole picture. The full story of these issues is here.

Lesson? The Internet is a limited source of knowledge. Find out more about Richard Dennis books 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 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.

An Interchange: Trend Trading Confusion

Posted on by Michael Covel

Feedback in:

Hi Michael, this is [name] from Kuala Lumpur, Malaysia. What is your take on Gold and soft commodities for the present year and where do you think the Dolllar is heading to? Warm Regards, [name]

Hi, are you familiar with my trend following research?

Yes i have read your books namely Trend Following and TurtleTrader. For a fact you go with the trend, but just wanted to know as to how you see these trends goin…

But I am a trend follower, not trend predictor! Trend followers don’t make predictions. Both my books emphatically say that. It’s not a joke!

How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Trust, But Verify … Is Always Prudent

Posted on by Michael Covel

Feedback in:

I am currently reading “Market Wizards” and came across an interesting quote by Michael Marcus, who said, “I do believe that trend following systems are doomed to mediocrity. I believe that the era of trend following is over until and unless there is a particular imbalance in a market that overrides everything else.”

That book was written over 20 years ago. What has happened since?

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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.

“I Have No Clue, But Please Post My Anonymous Post!”

Posted on by Michael Covel

This anonymous blog comment (well, he changed his name, but used the same IP as other non-anonymous posts) is quite possibly the most ignorant comment yet on my blog:

“Madoff’s monthly returns (before the fraud was exposed) looked like a trend follower’s nirvana — constantly rising NAV without drawdowns. Madoff investors showed trend-following “savvy” by investing with him knowing that the trend-is-your-friend-until-it-ends (Unfortunately the drawdown came instantaneously — and the Madoff NAV was limit down in perpetuity.)”

How do you spot the next Madoff? Anyone making 1-2% every month is either a scam or will blow up.

How is that remotely related to trend following?

How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

“I Like Trend Following, But Please Tell Me A Story Too!”

Posted on by Michael Covel

From a reader commenting on my recent post:

“Michael – the story gets worse – I think you and your readers will enjoy this tale of mine. (I usually post under my own name, but this time anonymous). We are a fully systematic trend following FX fund here in Europe with a quite a long and successful track record. Each month we have to produce a newsletter with a paragraph describing the previous month. For years I would use this to promote the philosophy of systematic trend following using only price as input with no interference, etc, etc – similar to what you are doing here. However, increasingly there has been a growing demand from new and prospective clients to see more “fundamental reasons” for our trading! They want to get a sense that we are indeed “experts” in foreign exchange! That we “know” what is happening in FX every month. So now I have to go back every month to find some of the more significant winning (or losing) trades and then somehow try to “find and fit” a reason why we made a profit in such and such a trade! In some cases the reason for a particular move emerges well after the fact, and sometimes, not at all. In some cases the market moved exactly opposite to the apparent fundamental conditions. Apparently our years and years of research and expertise in system design, trend following and money management techniques and the like, is worth nothing. Sometimes we feel as if we live in a parallel universe. Sometimes it feels as if this industry will never grow up. The worst of it is that these individuals have never, and will never be traders or fund managers themselves. However, they are the gatekeepers and allocators in the industry. The so-called wealth managers, family office managers, fund-of-fund managers etc. These are the decision-makers in the industry that decide on funds like ours. Thank you for your hard work and excellent blog. You remind us that we are not alone. All the best.”

Thanks for the note. I have noticed this too — across many trend traders.

How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

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Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.

Mikhail Prokhorov on too Much Information and Why Snowflakes Have No Relevance to Trading Succes

Posted on by Michael Covel

Feedback in:

“Hi Michael, do you think that hidden divergence is a good indicator of trend continuation after a retracement? Thanks in advance.”
Regards,
Jeff

Jeff, exact definitions of ‘hidden divergence’, ‘trend continuation’ and ‘retracement’?

“Hidden divergence is defined as follows (from http://www.babypips.com/school/hidden_divergence.html): If price is making a higher low (HL), but the oscillator is making a lower low (LL), this is considered hidden bullish divergence. If price is making a lower high (LH), but the oscillator is making a higher high (HH), then you have hidden bearish divergence. In a market that trends in a particular overall direction, the main trend is typically punctuated by periods where the market goes in the opposite direction of the main trend (forgive me if this is stating the obvious). ‘Retracement’ is when the market goes in the opposite direction to that of the main trend, and ‘trend continuation’ is a return to that main trend following a retracement.

Jeff, I am not sure how it is all relevant to trend following!

“Fair enough! Incidentally, do you think this difficulty in translating into mathematical formulas what is obvious to the human eye might explain why hedge funds haven’t sacked their technical analysts and replaced them with computers? :)”

In my book I talk about predictive and reactive technical analysis. The later is trend following. The former is BS. Some, just like BS. 🙂

“I’ve just had a look at your book. Is the distinction that predictive TA looks at things like Fibonacci numbers and Elliott waves, whereas reactive TA is simply interested in jumping onto an existing trend and staying with it until it shows signs of coming to an end?”

I like my explanations better, but I think you get it.

“I read a book called Trading Chaos a while back, in which the authors talked about physics and the prevalence of fractals in nature. It was all very interesting, but I struggle to see the relevance of the properties of a snowflake to any market, either brick or virtual!”

There is no relevance! This conversation with a reader of mine reminded me of a recent article about the new owner of the Nets: Mikhail Prokhorov. Prokhorov has told the world that he avoids the internet:

“I don’t use a computer. We have too much information and it’s really impossible to filter it.”

Bill Simmons, in his article on ESPN, adds:

“You know what? He’s not necessarily wrong. Do we REALLY need all this information? Like, right now — you’re reading this column and hopefully enjoying it, but ultimately, could you have survived the weekend if you missed it? I say yes. Just about everything online fits that mold — you have to sift through loads of bad writing and irrelevant information to find the occasional entertaining/funny/interesting thing, and even then, it’s not something that’s making or breaking your week. Ever been on a vacation and had little-to-no Internet access that week? You survived, right? Maybe the big Russian is on to something.”

Exactly. Isn’t that paragraph a great explanation as to why purveyors of too much analysis…are [expletive]? Its a great endorsement of trend following.

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.