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Tag: Trend Following

Ep. 239: Brett Steenbarger Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Brett Steenbarger
Brett Steenbarger

My guest today is Brett Steenbarger, a Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • What a “flow state” is, and why it’s important
  • How Steenbarger has seen flow connect to the trading world, and the importance of matching your level of difficulty and challenge
  • Risk and risk tolerance
  • The logical and psychological sides to risk
  • “What have you done for me lately” attitude for investors
  • Why we don’t grow if we stay within our comfort zones
  • Process vs. outcome
  • The psychological burden of certain fee structures
  • Some of the common characteristics of successful traders
  • Slow thinking, deep thinking, and fast thinking
  • Where we’re headed regarding prescription drugs related to the mind
  • Trend trading vs. mean reversion
  • Contextualism
  • Trend following vs. momentum trading
  • How people actually behave vs. how they describe their behavior

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Two Centuries of Trend Following

Posted on by Michael Covel

A recent trend following paper:

Synopsis: We establish the existence of anomalous excess returns based on trend following strategies across four asset classes (commodities, currencies, stock indices, bonds) and over very long time scales. We use for our studies both futures time series, that exist since 1960, and spot time series that allow us to go back to 1800 on commodities and indices. The overall t-stat of the excess returns is approx 5 since 1960 and approx 10 since 1800, after accounting for the overall upward drift of these markets. The effect is very stable, both across time and asset classes. It makes the existence of trends one of the most statistically significant anomalies in financial markets. When analyzing the trend following signal further, we find a clear saturation effect for large signals, suggesting that fundamentalist traders do not attempt to resist “weak trends”, but step in when their own signal becomes strong enough. Finally, we study the performance of trend following in the recent period. We find no sign of a statistical degradation of long trends, whereas shorter trends have significantly withered.

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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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• Frequently Asked Questions
• Performance
• Research
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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.

Dr. Phil Doesn’t Work Here

Posted on by Michael Covel

A recent exchange:

Mary: I’ll start by mentioning that I love most of the podcasts. I am also so appreciative that you created the Broke dvd, and The Complete TurtleTrader book. Ironically, many of us that don’t follow the herd still like to know that there are others out there like us. I listened to podcast episode 231 recently, and I wanted to give feedback, because you asked your listeners to! Episode 231 felt to me like I was being subjected to an infomercial. Every time you mentioned the words ‘Trend Following’, I felt like I was being asked to send you a 10k check. Trend following is certainly the subject of that podcast, but it sounded more like a pitch for the program you are selling. I didn’t hear the specifics of the report you were discussing. I’m not implying anything negative about your program because I haven’t tried it, and I don’t mind that you are selling it, I just don’t want to get to the end of a 30 minute podcast and feel that I listened to a live ad. That being said I can usually trust and count on your podcasts to be very valuable and I am a lunchtime listener. It makes my day!

Mike: Everyone is entitled to their opinion. People can judge my world off one podcast, or more than one, or none. People can read my books and draw conclusions, or not. Thanks for your feedback.

Mary: Thanks for the response, but no response would have been better in this case. ‘Thanks for being a loyal listener!!’ Would have been more appropriate.

Not sure what to say. Dr. Phil I am not.

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. 238: Larry Hite and Alex Greyserman Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Larry Hite and Alex Greyserman
Larry Hite and Alex Greyserman

My guests today are Larry Hite and Alex Greyserman.

Hite is a hedge fund manager and is one of the forefathers of system trading. He was famously featured in the Market Wizards book. A few years ago he started ISAM with Stanley Fink. Greyserman has 25 years of experience in the CTA industry, and was originally hired by Larry Hite at Mint.

Greyserman is Chief Scientist at ISAM (PhD in Statistics). He is also a professor at Columbia University.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • Singapore, and Covel’s recent excursions in Asia
  • How the game has stayed the same despite zero interest rate policy
  • What people are missing when they say “trend following is dead”
  • How you’ll never get perfection
  • Their 800 year study, the premise, and what was found out
  • Measuring human nature
  • The difference between divergent and convergent strategies
  • Risk management
  • Having “perfect” knowledge
  • Using long trends and getting whipsawed in shorter trends
  • The asset class of trend following compared to the NASDAQ buy and hold, etc.
  • What’s changed about human nature through all the booms and busts
  • Insurance, hedging your risk, and the risk transference process
  • Asymmetrical leverage
  • Adjusting to new environments
  • How those that survive are the most adaptable to the environment
  • How trend following automatically adjusts to what’s happening

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High Frequency Trading Hype

Posted on by Michael Covel

Feedback in:

Hello Michael, out of interest as there is a lot of concern around HFT [high frequency trading] trading firms. What are your thoughts on their impact on the markets?

What’s market behavior? Buyers and sellers? What’s HFT? Buying and selling? Who programmed the HFT? Buyers and sellers?

Note: I don’t condone illegal behaviors, but if you can buy and sell, and if you can’t stop market rigging, and if you are not glued to a screen with day trading insanity, it doesn’t matter from a trend following perspective.

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. 237: Sharon Moalem Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Sharon Moalem
Sharon Moalem

My guest today is Sharon Moalem, a physician and author. Moalem’s previous book, “Survival Of The Sickest”, was a New York Times bestseller.

The topic is his book Inheritance: How Our Genes Change Our Lives, and Our Lives Change Our Genes.

In this episode of Trend Following Radio we discuss:

  • Rafael Nadal as an example of digging deep in genetics
  • How our bodies are constantly in a state of deconstruction and reconstruction
  • How DNA is under constant modification
  • Genetic personalized medicine
  • “Jeff the chef” and an example of specific dietary needs
  • Dysmorphology and analyzing the hands, feet, and face of an individual
  • Gregor Mendel and his pea experiments in genetics
  • How your behavior can dictate your genetic destiny
  • The future of personalized genetic medicine
  • Critics and misunderstandings of genetics
  • Vitamins on an individual basis

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Creating Your Own Trend Following Path

Posted on by Michael Covel

Nice feedback in:

“Hi Michael: I left you a voice-mail and wanted to follow up with an email. I started up a new systematic trading firm with [known trading name] and [known trading name]. We are in the final stages of launching. I wanted to run a few things past you. Many people are asking why start a systematic trading firm (trend following – various time frames) now. All I can say is that we see an opportunity of a lifetime and have figured out what works and what doesn’t. I have been a big fan of your books and over the last year the podcasts. In fact, your continued focus on trend following and entrepreneurship caused me to re-evaluate my focus and actually ignited the idea to create this new firm and build an eclectic team of veterans. I have had the privilege of working daily with [name] and [name] over the last few months and as we get ready to launch many of the true believers of our strategy have re-emerged. As we internally try to avoid the “noise” of the market and media, these investors seem to be following suite and going against the grain. Many of my former investors asked me to reassess the strategy a little over three years ago and I went on I quest to find the best systematic traders. What I ended up deducing was that I already knew the best traders and strategies, but like me, were compared to Madoff and SAC where returns were generated from a ponzi scheme or insider trading. What we sought to create was a disciplined methodology that was “liquid and transparent” – taking calculated risk based on price action, volatility and diversification. But NOT diversification for the sake of zeroing out return. Your last podcast with Markowitz stirred me to write this email because so much of what he was saying was part of our own methodology. The dialogues you are having on the podcasts are unlike anything else out there. Please keep it up! I know you are in Asia but please email back or call me anytime at [phone] so we can arrange a Skype. I really look forward to speaking with you. All the best…[name].”

Thanks. Look forward to the call.

Listen to some of the greatest trading legends interviews on the Michael Covel Podcast.

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.