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Ep. 287: Toby Crabel Interview with Michael Covel on Trend Following Radio

Toby Crabel
Toby Crabel

My guest today is Toby Crabel, a tennis player who is now a commodities trader. In 2005, the Financial Times called Crabel “the most well-known trader on the counter-trend side”.

The topic is commodity trading.

In this episode of Trend Following Radio we discuss:

  • Crabel’s history as a pro tennis player
  • Longevity and consistency in tennis and trading
  • Where Crabel stands with the total number of systems he employs
  • The source of Crabel’s profits and the philosophy behind it
  • Price action
  • Winning and losing volatility
  • Why Crabel needs price movement and volume
  • The idea of price shocks and the importance of being aware of them
  • The process of moving from high drawdowns to a much lower drawdown
  • The importance of diversity
  • Early lightbulb moments that informed Crabel’s trading style
  • Crabel’s experience with Victor Niederhoffer
  • How the philosophy of Objectivism has informed Crabel’s life
  • The liquidity of futures markets
  • The importance of persistence

Go listen. You may also enjoy this post on Toby Crabel.

Buy & Sell

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Trend Following: Pura Vida!

Feedback in:

Hi Michael, I´m a Tim Sykes Challenge student [and] I saw you in one of his DVDs. Since then I have followed your podcast (and great interviews by the way). I’m [an] audio guy [and] I only found your audio book [for] “The Little Book of in Trading”. [W]hen [will] the others books…be available in audio?

I´ve been a broker for 17 years in Costa Rica in [Name] (biggest Insurance company in Central America) and my clients currently are pension funds: private and public. The markets in this country are changing. Our pension funds administrate 15B in local currency and they are doing baby steps to invest in the US markets. Could you recommend me the top funds that do Trend Following that specialize in pension funds or insurance companies?

Greetings from Costa Rica, or how we say, “PURA VIDA”.

Review my podcast. Many names. All of my books? More names. No secrets!


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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.

If Our Roles Were Reversed

If our roles were reversed? I believe that giving your money is giving me your trust. You are making a sacrifice, and could choose other opportunities. My goal is always to make sure that what I am giving you is more valuable than what you are giving me and my firm. That straightforward business principle is the foundation of my long-term relationship with all of my customers.


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.

Dumb Luck

Don’t confuse luck with a profitable system. Dumb luck is just dumb luck:

Reader: I open[ed] an account with 10 USD and with trend following I make 20 USD in 6 days.

Covel: That is gambling. Not trend following.

Reader: But it’s profitable.

Covel: Someone wins the lottery, and you apparently won the scratch off this week. That’s not a system. Luck.

Note: Yes, some not so wise people occasionally write me.


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.

Make My Dreams A Reality Mr. Covel

Feedback in:

Dear Mr. Covel, Trust you must be doing great.​ ​I ​have read all of your books many times & I really admire you for your methodical approach to markets. I am a IIT-IIM Graduate with more than 22 years of experience in India Capital Markets. I have been able to predict the market turns with close to 90% accuracy with verifiable track record. I appear on CNBC, ZEE Business & ET-NOW regularly. I am really passionate towards my profession. I run a boutique Alternative Investment Management firm specializing in generating positive returns irrespective of Market Direction. We are proficient in all types of Technical Analysis based trading.

1. Conventional Pattern Recognition Based Trading
2. Computerized Algorithm Based Trading
3. Predictive Methodology Based Analysis
4. Behavioral Studies based on Market’s Psychological Profile

I have a proposal to launch an Absolute Alpha Global Hedge Fund using hugely diversified strategies for trading in multiple asset classes such as different Global Equity Indices, Commodities & Currencies. As we will be using just 30% fund in trading, more than 60% funds will be used in Global Arbitrage to generate fixed income for balancing the risk. We are fully confident that we will be able to give more than 20% positive returns per annum in USD terms with less than 10% Equity drawdown. We wish to create a Global Hedge Fund which specializes in generating super normal positive returns every year. This structure has humongous potential to become a hugely successful Fund in just 2 to 3 years. I have 100% conviction in my abilities to deliver the real performance. An association with your company will give us everything what we are looking for. I look forward to hear positively from you soon to make my dream into reality. I promise you to give my 100% efforts to deliver more than the promise.

Thanks & warm regards,
[Name]

I don’t recall ever writing about 90% accuracy. Isn’t that the Holy Grail of all Holy Grails? Even if you had that accuracy how does it guarantee you make money? You could be accurate 90% of the time and still lose massive money on the other 10%. Accuracy talk is not 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.

Trend Following Goes for the Middle Meat

Consider an illustration that can make you rich:

trend following chart

Trend following does not pick bottoms or tops. You always get into a trend late, and get out late. You cannot predict a trend. That chart might not seem like a great strategy at first glance, but it is the foundation of one of the most profitable insights in the history of market speculation: capture the middle meat and you can make a fortune.


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.

Vineer Bhansali: 10 Things My Hobbies Have Taught Me About Investing

Vineer Bhansali’s interesting paper (PDF) mentioned in our podcast.

Note: Used with permission from Pacific Investment Management Company LLC.


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.