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Tag: Trend Following

Choppy Market Navigation?

Posted on by Michael Covel

Feedback in:

Hi Michael, I met you at Tim Sykes Conference this year. I am interested to know more about your trend following strategies. Are they applicable in today’s choppy market environment and can we apply it to options trading with time decay working against us with the simple calls n puts? –Monique C.

Time decay is an issue for regular options. But as a trend trader you won’t be trading regular options–just LEAPs options–and time decay is not the issue there.

Choppy markets? One can never predict when a market will be choppy or not. You need a strategy for all markets conditions and trend following fits the bill. It won’t make money during the chop, but it will aim to lose less. Sometimes minimizing losses is much more important v. trying to make money. You can only take what the market gives.

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. 94: Tushar Chande Interview with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Tushar Chande
Tushar Chande

My guest today is Tushar Chande, a trader, author,co-founder and head of research at Rho Asset Management in Switzerland. Chande has had a long and distinguished career in technical analysis; he brings a unique perspective on how to look at the markets as a trend following trader. He came to America and earned his Ph.D. in metallurgical engineering from the University of Illinois in 1984. 

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

  • Early influences, and chart the journey from his days as an engineering student to his accomplishments as a systematic trend following trader
  • Analogy between sports and trading, how the best sportsmen rely on having a stable and predictable environment (unlike the markets)
  • Evaluating performance within the context of the market
  • Discretionary trading v. systematic trading
  • Learning through “trial and terror”
  • The Rho Trend Barometer and the ability to quantify the environment
  • The problem of indexes
  • The Sharpe ratio
  • The importance of market movement to trend following trading
  • “The black box disease”
  • Trusting your system
  • Cognitive biases
  • The benefit of the “black swan” and outlier events and why these events are so beneficial to a trend following system
  • Whether “one-hundred Ph.D.’s are better than one”

Listen to this episode:

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Teller Outlines Trend Following Philosophical Foundations (Though Not His Intent)

Posted on by Michael Covel

Teller writes:

The most important decision anyone makes in any situation is “Where do I put the dividing line between what’s in my head and what’s out there? Where does make-believe leave off and reality begin?” That’s the first job your intellect needs to do before you can act in the real world. If you can’t distinguish reality from make-believe—if you’re at a stoplight and you’re not sure whether the bus that’s coming toward your car is real or only in your head—you’re in big trouble. There aren’t many circumstances where this intellectual distinction isn’t critical.

It was not his intent, but what a great explanation for why trading price is so smart. He continues:

Let’s take what magicians call a force, where the magician gives you a false sense of free action by giving you an extremely controlled choice…When I go to the supermarket, I have a choice of dozens of kinds of cereals—all made by the same manufacturer of essentially the same ingredients. I have the gut impression of variety and freedom, but in the end, the only real choice I have is not to buy.

Mutual funds not really a choice? Left/right politicians not really a choice? Correct, not really a choice.

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. 92: Cheat Sheet for Trading Success with Michael Covel on Trend Following Radio

Posted on by Michael Covel
Cheat Sheet for Trading Success with Michael Covel on Trend Following Radio
Cheat Sheet for Trading Success with Michael Covel on Trend Following Radio

Please enjoy my monologue The Cheat Sheet with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

Listen to this episode:

Want to learn more Trend Following? Watch my video here.

Ep. 91: The Six Inches Between Your Ears with Michael Covel on Trend Following Radio

Posted on by Michael Covel
The Six Inches Between Your Ears with Michael Covel on Trend Following Radio
The Six Inches Between Your Ears with Michael Covel on Trend Following Radio

Please enjoy my monologue The Six Inches Between Your Ears with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

Listen to this episode:

Want to learn more Trend Following? Watch my video here.

“The Market is Always Right.”

Posted on by Michael Covel

Jim Rohrbach writes:

I was listening to the Gary Kaltbaum show last night, and my friend Brian Balsanek was filling in for Gary. Brian said something that was very profound and simple. He said, “The stock market is always right.” I love that. Yes the market is always right. Often we hear people saying that the market is going to go up or go down. They place their investment decisions with what they think the market is going to do. Then when the market doesn’t do what they think it should do, they try to tell us that the market is wrong. They don’t admit that they are wrong. The market does what it wants to do and it is always right. We may not agree with what the market is doing at any point in time, but it is futile to say the market is wrong or to invest opposite the market. If the trend of the market is up, that is the correct trend and we need to go with it. If the trend is turns down, we should get out and not try to rationalize that the market should not be going down. Since the market is going down, and since the market is always right, we should get out.

Nice Jim.

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.

Wisdom from William Eckhardt

Posted on by Michael Covel

1. What is the state of the market?
2. What is the volatility of the market?
3. What is the equity being traded?
4. What is the system or the trading orientation?
5. What is the risk aversion of the trader or client?

Regardless of how you trade or invest … you better have those answers in advance of betting real money. Thank William Eckhardt for those perspective pearls. And yes–you answer with a number.

More on Pricetrader Bill Exkhardt.

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.