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Ep. 116: Jerry Parker Interview with Michael Covel on Trend Following Radio

Jerry Parker
Jerry Parker

My guest today is Jerry Parker. In 1983, Parker was accepted into the Turtle Program, a select investment training program developed by successful Chicago portfolio manager Richard Dennis. He appears in Covel’s “The Complete TurtleTrader” and has been the most successful TurtleTrader. Parker founded Chesapeake Capital Corporation, a global investment manager headquartered in Richmond, Virginia, in 1988.

The topic is Trend Following. 

In this episode of Trend Following Radio we discuss:

  • Mistake of combining different strategies with trend following, and the importance of having a concentrated strategy that you can rely on
  • How discretionary moves can get in the way of your system, and “systematized discretion”
  • The psychological effect of following a trend following strategy for decades
  • The idea of going for positive expected value over what’s least risky
  • Why Parker doesn’t like to use the term “managed futures”, and why it doesn’t really tell the story of trend followers
  • Trend followers performing well at different points in time compared to long-only
  • Using trend following as another strategy for investors who only invest through a long-only value-based system
  • The importance of not letting your views on politics and society influence your trading, and maintaining a systematic and disciplined approach
  • The growth of news media since 1984, information overflow, limiting your variables, and using price as your primary indicator
  • How Parker has learned over the years to deal with drawdowns, loving your losses, and the importance the Turtle program played in his education on drawdowns
  • Why governments are the ultimate counter-trend traders
  • Why buy and hold is not a good place to be even if people are saying it’s turned around
  • Parker’s stock-only trend following program, and why the diversified program will do better than the stock-only system
  • Leverage as a tool

Listen to this episode:

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Richard Dennis Offers Sound Day Trading Advice

For every ten traders that try their luck at day trading nine of them will go broke. It is just the way the game works. Famed trader Richard Dennis had this to say about day trading:

If I’m buying and selling in the same day, it’s always to take a loss. I haven’t made a profit on a day-trade in five years.

Having a plan and sticking with it is also something Dennis stood by in his day trading advice:

“When you have a position, you put it on for a reason, and you’ve got to keep it until the reason no longer exists. Don’t take profits just for the sake of taking profits. You have to have a strategy to trade, know how it works and follow through on it.”

Without a solid plan, and the nerves to stick with it, the markets will exploit you, take advantage of you, and then in a sad quiet fashion…. leave you for broke on the side of the road.

Richard Dennis Tutle Traders Books
Be sure to read my book, the Complete Turtle Trader, to learn more on how Dennis led the Turtles to great success using the Trend Following method.

Find out more about the Turtle Traders.


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
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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.

Thanks Again for Your Wonderful Wake-up Calls

Feedback in:

Hi Michael, I have started to read your books about 6-9 months ago, and bought the only one I was still missing last week-end! I still have to complete reading of this last one, currently ‘digesting’ the various readings, while I have to fully grasp all the learning into a structured thinking of mine. Over the past 6 months I have also started to seriously listen to your podcasts and trying to catch-up with the long list of great insights. I like your personal way of thinking/speaking: incisive, clear-cut, no unnecessary compromise. Your message goes out loud and clear. Thanks for this fantastic array of shared knowledge! You have clearly influenced (directed?) my belief in price and trend following as the methodology that all successful traders use. I am now a firm believer of ‘taking charge’ and I believe ‘Trend Following’ is the way. I am still struggling a bit to put a system in place. I want to purchase one of your systems, but I am not sure which one. My sons are more knowledgeable in dinosaurs than I am, but not your types of dinosaurs! This morning, I was catching a bit on podcasts and heard you will be in Singapore later in February. I would love to meet you face-to-face. Based on your insights, I would also like to understand why in your opinion, despite using the same system described in your books, the ‘turtles’ did not all have the same amount of success: different leverage? less discipline to follow the trading signals? Do you short the exact same way as you ‘long’ the market?, etc. I am really looking forward to meeting with you in Singapore,
Very best regards,
Patrick

P.S. Two words on me: I am a French national, living in Asia with my family for 8+ years by personal choice. I successfully started a joint-venture in India 8 years ago (but unfortunately did not get shares of it… ), then have been the MD of [name] in Malaysia for 2 years, and have now been developing business in Asia for [name], based here in Singapore. My personal story with the finance industry is not different than the one of many others when it comes to ‘investing/trading’. I initially thought that, as for other Industries, trusting the professional investors was the safe bet, to my greatest disappointment. Trust in banks and pensions funds has eroded with the bad years to the point where I went into reading/listening to make my own decisions. Which is where I am now…Thanks again for your wonderful ‘wake-up calls”!

Thanks! We will try for a Singapore meetup once my schedule firms.

How and why did Turtles have differing levels of success? That is a main component of my book on their story. Take a read!


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. 96: Critical Thinking with Michael Covel on Trend Following Radio

Critical Thinking with Michael Covel on Trend Following Radio
Critical Thinking with Michael Covel on Trend Following Radio

Please enjoy my monologue Critical Thinking the Trend Following Way 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.

Wisdom from William Eckhardt

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.

Ep. 49: David Cheval Interview with Michael Covel on Trend Following Radio

David Cheval
David Cheval

My guest today is David Cheval. Cheval was an inside witness to Richard Dennis and Bill Eckhardt’s famed Turtle experiment. Through the involvement of his former wife, famed original TurtleTrader Liz Cheval, David Cheval’s history and background for the Turtle story comes from a unique vantage point.

The topic is Turtle Trading.

In this episode of Trend Following Radio we discuss:

  • Events surrounding the Turtle experiment, including his own interesting part in alerting his former wife to the opportunity (he is still an investor in her firm)
  • Cheval’s progression from a runner on the Chicago pits, to the formation of his CPO (Dearborn Capital Management), to his career in law today
  • The presence of Richard Dennis on the Chicago Board of Trade in the years prior to the Turtle experiment
  • Some of the lessons that can be gleaned from some of the most successful Turtles
  • The difference between volatility and risk
  • Why basic trend following philosophies are timeless

Listen to this episode:

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“The overwhelming fact is that this thing that shouldn’t have worked has worked for 30 years.”

An excerpt:

To see how trend-followers aren’t all about rocket science, take one of the forefathers of today’s fund managers: Chicago-based trader Richard Dennis. In the 1980s, he made a bet with a rival that successful traders could be taught, that it wasn’t an innate talent. As part of the contest, Dennis taught a breed of traders he called ‘Turtles’ because he trained them to lock into specific market trends and ride them, just as turtles ride sea currents. What was important was to decide on a system and stick with it. The approach lends itself to computerized dealing, because in it, trades are often triggered by the dynamics of the market itself. A classic example is the moving average. Track the five-day moving average of a stock and, some traders believe, you should buy where it crosses above the 30-day average or sell when it falls below. Such ideas can be converted into an algorithm that tells a computer when and how to trade. The turtles’ edge, like trend-followers today, was in exploiting the reality that mainstream economic theory doesn’t allow for: financial markets don’t behave efficiently, but follow vogues and panics. “The overwhelming fact is that this thing that shouldn’t have worked has worked for 30 years,” said Harding over lunch at his local West London Italian restaurant. Computers don’t need to be persuaded to hold firm when the market turns against them.

Well stated.


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.