Customer Reviews

The Little Book of Trading: Trend Following Strategy for Big Winnings (Little Books. Big Profits)

5 star:		(43)
4 star:		(4)
3 star:		(1)
2 star:		(2)
1 star:		(10)

 

 

I think the dichotomy of opinion in these reviews pertains more to expectations than anything else. If you are looking for specific trend following systems that are turnkey in nature, this book won't help. The fact is, however, that there are literally thousands of ways that a person could design a trend following system and all of them would work if you follow the advice of the traders discussed in this book. It is not for lack of a system that investors fail, it is generally the result of letting emotions get the best of you. One of the main premises of Michael Covel's books is that we can all be victimized by our evolutionary psychology to make stupid trades that will eventually bankrupt us. This book is a roadmap out of the never-ending Buy and Hold, Average Down Investment Loop that makes stooges of us all. You don't have to be a math professor to be successful at Trend Following. You just have to focus on what markets are communicating in the here and now by virtue of prices and their general trajectory... Simple to understand, but hard to implement without a steely resolve to follow the trend. Let your losers go early and let your winners run.

Got the book before a long flight. Purchased along with the the Trend Commandments. Loved both of them. They were different - but similar at the same time. I breezed through the Little Book. For some reason I enjoy the interview format - hearing from other traders shows me that we all put our pants on the same.

Great read, highly recommended.

Knowing what you want! If you get anything out of this book, that should be it. Covel's interviews successful traders to produce another mind blowing adventure into the lives of traders.

Each of the people featured - and there were 11 - were clear on what they wanted out of trading. I can recall recently being in a market at was so hung up in being right that I made stupid mistakes. In the end I was right, but spending thousands to average a price down to make a few hundred is a great way to go broke. What I should focus on is profit, not my ego.

That was the lesson for me from the book. Each of the profiled traders are clear that they want to make money. For them a systematic method - one which eliminates emotions - was the best way. That is powerful. Here are traders managing millions and in some cases billions of dollars. Following a system keeps their emotions at bay - it is a built in check and balance system.

One of my favorites was the chapter on Kevin Bruce. Kevin has traded his entire adult life to create a personal fortune (very close to my age!). That is inspirational - dedication and persistence shown in tremendous reward.

As I read through some of the negative reviews of this book I'm enjoying a good chuckle. To those of you who think that "The Little Book of Trading" is somehow remiss because it doesn't give you exact information regarding entering and exiting trades or a step by step plan on how to size your positions and manage your risk, you are missing the point. Any type of trading system is extremely personal, and you need to put in the time discovering the detailed trading rules that work best for you. The reason for this is simple; you have to believe in your method so deeply that you are willing to stick with it when times are bad (you're temporarily losing money). This can only be accomplished by developing a trading plan on your own, not by using something that someone else gives to you. No one is going to give you the "Holy Grail"; developing your own trading system using the concept of trend following is as close as you're ever going to get.

Becoming a trading success is like getting an education to practice any other profession. Would you let someone perform brain surgery on you after they read a book about it, or would you expect them to have completed years upon years of college and medical school, followed by interning with some of the leaders in their field? Trading isn't any different. You're not going to buy this book and get "the step by step secret" to becoming a successful trader; however you will get the information necessary to give you an excellent foundation to begin your journey of self-discovery as a trend follower, and as a bonus all of Michael Covel's books include wisdom from experienced trend followers that will help you to have those "a-ha" moments as you learn. Later on you will find yourself referring back to "The Little Book of Trading" (as well as his other books, "Trend Following", "Trend Commandments", and "The Complete Turtle Trader") and discovering more and more nuggets about how to best develop your plan.

I have been a trend follower for more than a decade and wish I had Covel's informative books when I began, it would have saved me years of searching on my own for the best trading method to build my trading plan/system around. Even though I've achieved my success as a trend following trader I still enjoy Covel's material, it's the most detailed and accessible information regarding the subject of trend following and will reduce your learning curve by years if you use it properly!

With that out of the way, here are two simple reasons you should read "The Little Book of Trading":

1. The wisdom that comes out of the interviews with the trend following "stars" is priceless, even though the interviews may not be presented in a direct Q & A form (another complaint I see in these reviews). The information doesn't lose any of its effectiveness just because it is encapsulated by Covel from interviews that he has conducted with these traders through the years. You have an opportunity to use these glimpses inside the minds of success to model your own trading; don't miss this opportunity!

2. All areas of trading you need to learn to master are here and discussed by the "major league pros" of trend following; system building, trading psychology, money management, portfolio building, risk management, the distraction of fundamentals, running a trading business, etc. Once you learn it's up to you to develop your own plan you will see this goldmine for what it is.

If you are a new trader seeking to learn (or just new to the concept of trend following), you've got a great reference in "The Little Book of Trading" (as well as Covel's other works). If you're already a seasoned trend follower you'll enjoy the stories of other traders and their successes; it will keep you on track when you find yourself starting to stray... during those pesky drawdowns.

great book - i actually like this format better than most other trading books. ive been around for 30 years so ive seen it all. what covel delivers is stories and insights from those who are doing it each day for a living. as a market pro i find that refreshing. i enjoy knowing what other traders are doing - not specifically their actual trades, but rather their risk management and trade selection.

i bought both of his new books, liked them both, but will return to this one over and over again

OK - let's cut to the chase here. "Trend Commandments" may have been more holistic and a great read also, but this is where you separate the men from the boys. On my LinkedIn profile I already wrote the following : "Most definitely one of the most inspiring books I've read so far this year. Not only is it important if you're in the business I'm in ... and the conclusions that come with it. No - much more are the simple life lessons that ring true and tested - and make you REALLY wonder what on earth we're doing here ... Class Act - way to go Michael, and by the way, much better than Trend Commandments ! " I have little more to add, if only that after reading, you really appreciate fully the concept of "all is in the price". Focus on price action, and ride the wave. Coupled with serious and critical money management techniques, and you should be golden. Much better I would think than continue to let your head spin by all this talking heads that are there to suck you out of your money. I'm sold, and cancelled pretty much most of my newsletter subscriptions - I am ready to ride whatever wave (current of future) that comes along. Gold ? SDS ? TLT ? OJ ? It does not matter - just give me the dough.

I just finished reading The Little Book of Trading (2011) by Michael W. Covel. Mr. Covel is well known in trend following circles for his previous titles including The Complete Turtle Trader and Trend Following.

To be honest, I didn't expect much out of such a little book. I was, however, pleasantly surprised by how helpful this book was to both the novice and experienced trend trader, alike.

As with Mr. Covel's other works, this book is a bit of enigma in that it fails to actually explain how to implement trend following in your portfolio. However, I did find it to be well written and insightful.

I have read a lot of books on trend following and I think the author does as good a job as I have seen explaining concisely why trend following works, while other investment strategies tend to fail over time.

I love his rebuttal of comedian and investment guru Ben Stein's comment that "if you didn't lose money during the panic of 2008, you were probably doing something wrong." Mr. Covel quickly dispatches with this comment as part of Wall Street's "conditioning." He further explained that true wealth is found in the trend, not fundamentals and not the latest news flash. He explained this is why so many trend followers flourished in 2008, while other once popular managers flamed out.

Not one to just beat his drum, the author mixed in biographical interviews and insights from other world class trend following managers covering some the industries best known managers. These insights I personally found most helpful as a trend following manager and signal site operator (see www.stock-signal.com). As an example, I love what the Sunrise Capital guys had to say about risk. They stated that "they jump on every trade; however, how much they risk on those trades changes over time."

David Druz told how "once a system's parameters and algorithms are established, the system must be followed exactly and religiously." He also stated "the more robust a system, the more volatile it tends to be."

I learned from Charles Faulkner the critical lesson that "losses are part of the game. No matter how much experience a trader has, there will always be losses." I guess I should stop taking them so personally! He further advised traders to view money as a way of keeping score, rather than actual dollars.

Investors and traders alike tend to do their craft in isolation so I found it particularly helpful to get the sage advice of successful peers and be able apply their collective knowledge to our investment strategies.

Someone has to win for you to win

Section two from David Druz - you have to read this if you want to learn how the markets work. Your winners come from others losing. Get comfortable with it - its zero sum. This is what makes these (eeg heads) so competitive. For them to make it big - they had to beat a lot of other people. Its just like football or any other sport.

Read this chapter to get your competitive juices flowing.

Covel is a controversial author - because he sticks the facts in your face. This book was a bit of a respite from that theme. Here is shows you what successful people are doing in the markets. Written in chapter form - he overviews what successful traders are doing now, how they started and the like. It is apparent that they all put their clothes on just like me - so if they can do it - then so can i.

Really enjoyed the book. Quick read but it is thoughtful with meaning behind each chapter. Other reviewers have revealed that the chapters are written about current traders. A lot of insights and meanings from those who are doing it now. Good stuff.