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Tag: psychology

A Short Course in Thinking About Thinking

Posted on by Michael Covel

Session #1 from Daniel Kahneman, the psychologist who is the co-creator of behavioral economics (with his late collaborator Amos Tversky), for which he won the Nobel Prize in Economics in 2002:

Sessions #2-5 here.

Why interesting? His work is truly one of the foundational reasons why everyone will never be a trend follower.

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Ep. 3: Charles Faulkner Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Charles Faulkner
Charles Faulkner

My guest today is Charles Faulkner, a trader, mentor and author who has been featured in Jack Schwager’s “Market Wizards” series. Faulkner is an international expert on modeling the knowledge and performance of exceptional individuals, teams and organizations, and applying the latest research in cognitive neuroscience and linguistics.

The topic is trading psychology.

In this episode of Trend Following Radio we discuss:

  • Mental mapping, risk, expertise, the metaphor of trading to motorcycling, and how human nature and biology influence investment decisions

Listen to this episode:

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Larry Hite on “Being Wrong”

Posted on by Michael Covel

An excerpt from The Little Book of Trading:

One final important gem from Larry Hite is that being wrong is okay. He says he was never very good in school and not much of an athlete either. But he turned that to his advantage because he was able to grasp the idea that he could be wrong. In fact, it came as no surprise to him when he was wrong. Hite recalls with pride: “I’ve always built in an assumption of wrongness [in my trading]. I always ask myself: What is the worst thing that can possibly happen in this scenario? Then I use that worst-case scenario as my baseline. I always want to know what I’m risking, and how much I can lose. And sometimes, when you really look at it, there’s really not all that much risk [which is why you can get rich].”

More on Hite.

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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.

Quote from Patton: “Rommel, You Magnificent Bastard. I Read Your Book!”

Posted on by Michael Covel

Paul Tudor Jones as quoted in the Foreword to The Alchemy of Finance:

In Patton, my favorite scene is when U.S. General George S. Patton has just spent weeks studying the writing of his German adversary Field Marshall Erwin Rommel and is crushing him in an epic tank battle in Tunisia. Patton, sensing victory as he peers onto the battle field from his command post, growls, “Rommel, you magnificent bastard. I read your book!”

Every day I say the same thing to myself.

patton and rommel
The German General Rommel. In the film of the same name Patton declares to have read the Rommel book.

The Erwin Rommel book in question is most likely to be Infantry Attacks, published in the middle of the 30’s as ‘Infanterie greift an’. It discusses the Stoßtruppen tactics used in the first world war. Reading as many books as possible on a subject, especially by your competitor, may just give you the advantage you need to win.

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.

Want to Make Money? Forget the Daily News Drivel. Here Is Some Inspirational Thinking

Posted on by Michael Covel

Firemen, donuts and meetings.
The more or less choice.
Is America at a digital turning point?
Optimism has its advantages, but some worry the region may lose touch with the rest of the world.
Entrepreneurial grab bag.
Leadership lessons from the Shackleton expedition.

Yes, you need a technical indicator as part of your trend following system, but you need those links even more for a chance at profit in our charmingly chaotic world.

Is it all good out there? Stuff I found to be white noise, but clearly popular:

A Few Tips For Developers On How To Get Hired By A Startup
SEC Ups Its Game to Identify Rogue Firms
Answers to Google Interview Questions

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.

The Entrepreneurial Checklist from Michael Covel

Posted on by Michael Covel

Nancy Upton and Don Sexton, professors at Baylor University who have long studied entrepreneurs, pinpointed traits possessed by Parker and other entrepreneurs:

1. Nonconformists: lower need to conform indicating self-reliance.
2. Emotionally aloof: not necessarily cold to others, but can be oblivious.
3. Sky divers: lower concern for physical harm, but does change with age.
4. Risk takers: more comfortable taking it.
5. Socially adroit: more persuasive.
6. Autonomous: higher need for independence.
7. Change seekers: like novel approaches. This is different than 99% of all other people.
8. Energetic: higher need and / or ability to work longer.
9. Self-sufficient: don’t need as much sympathy or reassurance, but they still need to form networks so self-sufficiency need not be taken to extremes.

Same for trading. Big reasons why some Turtles did not make it.

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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.

Read Linchpin by Seth Godin

Posted on by Michael Covel

The short version:

Note: Shout to Jim Byers for the find.

You may also enjou the Speculator book on Arthur Cutten.

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.