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Ep. 529: Annie Duke Interview with Michael Covel on Trend Following Radio

Annie Duke
Annie Duke

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My guest today is Annie Duke. She is a poker player, author, decision making expert, and cognitive scientist. Her understanding of how luck, skill and uncertainty all play a role in life is fascinating.

The topics are cognitive science and poker.

In this episode of Trend Following Radio we discuss:

  • Quality of outcome vs Quality of your decision
  • Game theory and math
  • Applying poker decision making to life decision making
  • Cognitive science

Mentions & Resources:

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The Annie Duke Episode: Poker and Trend Following

There are many correlations between trading and poker. Consider this excerpt from my best selling, Trend Following:

In the book Absolute Returns, Alexander Ineichen stresses that trading is a “game.” He sees no rules for the game except the constant of change, but more importantly, he reminds us that it is crucial to avoid becoming the “game.” There are three types of players in the game:

• Those who know they are in the game.
• Those who don’t know they are in the game.
• Those who don’t know they are in the game and have become the game.

If, within a half of an hour of playing poker (or trading for that matter), you don’t know who the patsy is, you’re the patsy, or as Ineichen calls it “the game.” I have introduced those traders who didn’t know they were in the game and therefore became the game in the big events of the Long Term Capital Management hedge fund implosion, the Barings Bank collapse, and the October 2008 market crash. I introduced those traders and investors who did not know they were in the game pursuing Holy Grails that never panned out. And I introduced trend followers who knew they were in a game and brought an edge to the table every time they played. If you know trading is a game and you want to be a part of it, these are stark choices.

Recently I had Annie Duke on my podcast. She is an author, entrepreneur and professional poker player. We discussed several ways in which the psychology of gambling overlaps with that of trading, investment and other aspects of business. The following is brief feedback from that interview:

Mike, loved, loved, loved the Annie Duke episode. My favorite one yet. GREAT STUFF! [Name]

Thanks! More on gaming and betting? Go.


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Games People Play: Trend Following A Wise One

Always make sure you are a player in the game whether it be sports, business, or just life. Never let yourself be the one being played. Below is a chapter taken from Trend Commandments:

You can make your first million—and that is the hard number. Anyone can do it. Of course, billions, and degrees of billions, require some luck. However, an educated person, no matter how they get their education, can indeed saddle up to their iPad and make a small fortune. To say otherwise is disingenuous.

The world has changed. The game is different. If you are sitting around waiting for a job to magically appear, or if you are listening to talking heads rambling on about politicians creating jobs, or worse yet, you think China is the enemy to your wealth creation, it has to be asked: “Are you a masochist?”

There is another game to play. Trend following trading is that game, but it is terribly important to avoid becoming the game—a game I have explained in a multitude of ways. So think about the three types of players in any game:

  • Those who know they are in the game.
  • Those who do not know they are in the game.
  • Those who do not know they are in the game and have become the game.

Within a half hour of playing any game, if you do not know the patsy, you are it. Said another way: You are the game. That is serious talk for the serious game of your financial health and wealth.

Always be aware and stay ahead of the game.


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.

Thinking About Winning and Losing

The guy who wins the most hands is not the guy who makes the most money in the long run. The guy who never loses a hand is not the guy who makes the most money in the long run.

Think about it. Or don’t.

Note: Shout to Tony Hsieh for the words. My film takes the thought further.


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.

Ep. 90: Richard Weissman with Michael Covel on Trend Following Radio

Richard Weissman
Richard Weissman

My guest today is Richard Weissman, a professional trader with over 25 years of experience and an author. Weissman considers himself a “swing trader”. He is one of the world’s foremost authorities and thought leaders in the fields of derivatives, risk management and technical analysis.

The topic is his book Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House.

In this episode of Trend Following Radio we discuss:

  • Weissman’s path from how he started trading with his father in 1987 to how he made his way to where he is today
  • Background to Weissman naming his book
  • The influence of Jack Schwager’s work
  • Risk management
  • Positive expectancy
  • How Weissman defines trends and signs of strength
  • The idea of “don’t anticipate, just participate”
  • Positive expectancy and the probability skew
  • The connection between table limits and risk management
  • How there are no truly “safe investments”
  • Some tools that Weissman has used to influence his own trading psychology and smooth out the emotional highs and lows
  • Not letting a high price stop you from buying, and not letting a low price stop you from selling
  • Weissman’s concept of “the opaque urn”
  • The three things you can guarantee

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Ep. 22: Mike Aponte Interview with Michael Covel on Trend Following Radio

Mike Aponte
Mike Aponte

You can listen to my interview with famed MIT card counter Mike Aponte:

My guest today is Mike Aponte, a professional blackjack player and a former member of the MIT Blackjack Team. Aponte was featured in the bestselling book “Bringing Down The House” as the player Jason Fisher, which was adapted into the movie “21”.

The topic is investing.

In this episode of Trend Following Radio we discuss:

  • Due to his systematic approach, he’s definitely not a gambler; he’s an investor
  • Aponte’s beginnings
  • The similarities between systematic card counting and trend trading; the psychology behind the two
  • How even some of the more advanced mathematicians at MIT didn’t have the risk-taking constitution it took to make the cut
  • Some revealing anecdotes along the way, including a run in with casino security that ended with them actually asking for his autograph

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Casino Math Makes Trend Followers Happy

Casino math (PDF) may be the most important wisdom you can know to be a successful trend follower. In fact, I feature much of this thinking in my documentary film.


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.

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