Trend Commandments: Trading for Exceptional Returns [Hardcover]

Michael W. Covel (Author)

Book Description

Publication Date: June 24, 2011 | ISBN-10: 0132695243 | ISBN-13: 978-0132695244 | Edition: 1

Do you ever think the stories you hear about great trading, and the gains produced, sound like luck?  Do you ever wonder if there is a real method and philosophy behind the success stories?  The concepts condensed into Trend Commandments were gleaned from Michael Covel's 15 years of pulling back the curtain on great trend following traders.  It is a one of a kind money making experience that forever lays to rest the notion that successful trading is akin to winning the lottery.  Winning has a formula, as does losing.  Covel nails both head on.  Getting rich is a fight; make no mistake about it, but at least now with Trend Commandments you have a primer that allows you to crack the code of the winners.

Editorial Reviews

From the Back Cover

“An outstanding book for anyone who wants to become rich by trading markets. Highly recommended!”

--Marc Faber, Managing Director, Marc Faber Ltd., and Editor, “Gloom Boom & Doom Report”

 

“If you are even thinking of a career in trading, put down all the other books. Buy this one. Read it. Now you can start your career.”

--James Altucher, Managing Director, Formula Capital

 

“A rapidly moving, non-technical, and outside-the-box effort that smartly captures the essentials of trend following.”

--Peter Borish, Chairman and CEO, Computer Trading Corp

 

“Covel offers a breezy rumination on what is right about trend following and what is wrong about conventional trading approaches.”

--Jack Schwager, Author of Market Wizards and Schwager on Futures series

 

“Trend Commandments is definitely one to add to your financial bookshelf.”

--David Stendahl, Signal Financial Group

 

“I’m certain you’ll be a successful trader if you follow the ideas Covel outlines in Trend Commandments.”

--Steve Sjuggerud, DailyWealth

 

“Trend Commandments is essential reading for those who have the desire to thrive and survive in an era of fast-paced trending markets.”

--Jim Puplava, CEO, Chief Investment Strategist, PFS Group

 

“Covel challenges readers to...question their beliefs about market ‘truths’ ingrained in them for years. Forewarned, you just may never see the world the same way again.”

--Mebane Faber, Cambria Investment Management

 

“Wide-ranging, irreverent, revealing, eminently quotable, and right on the money.”

--Charles Faulkner, Market Wizard Trading Coach

 

In the bestsellers Trend Following and The Complete TurtleTrader, Michael W. Covel introduced trend following trading with painstaking detail and real-life stories. This new book offers a 360-degree vision designed to teach, compare, contrast, inspire, and push you to trend trading success.

 

Up? Down? It doesn’t matter. There are always trends, and that means there are always profits. Many of the world’s top traders are trend followers: That’s key to a fortune. You can do it, too--and now you have the rare perspective it takes to be a trend following winner.

 

One bite-size concept and illustration at a time, Covel shows how you can get ahead in an age of nonstop financial crisis and deepening instability. Winning means the right techniques, psychology, philosophy, and even skepticism--it’s all part of the learning, then earning process.

 

Trend Commandments delivers real moneymaking insights developed and cultivated from 15 years of behind-the-scenes research--intellectual access you can’t fake. It’s the most digestible and one-of-a-kind trend trading book ever written. 

• Reap the spoils when domestic and global markets crash...
  ...and find big waves to ride even when people aren’t panicking
•  Don’t waste time trying to predict the future...
  ...learn how to think and react to what is actually happening
•  Decipher the ‘noise’ in a sea of competing voices...
  ...let go of ‘value,’ mutual funds, the Buffett legend, and Goldline (to name a few)
•  Listen to the market. It always tells the truth...
  ...and the “price” is the only true trading reality you can trust

About the Author

Michael W. Covel serves as President of Trend Following (TurtleTrader), a privately owned research firm. In 1996, Covel colaunched TurtleTrader.com. It has attracted millions of visitors.

 

His first book is Trend Following: How Great Traders Make Millions in Up or Down Markets (FT Press, Apr. 04, Nov. 05, Feb. 07, and Feb. 09). This must-have classic has been translated in German, Japanese, Chinese (Traditional and Simplified), Korean, French, Arabic, Turkish, Portuguese, and Russian.

 

His second book, The Complete TurtleTrader: The Legend, the Lessons, the Results (Collins, Oct. 07 and Feb. 09), is the only narrative account of trader Richard Dennis and his student traders, the Turtles. It has become the definitive book on the subject and has been translated in German, Japanese, Chinese (Traditional and Simplified), Korean, and Russian.

 

His first documentary film is Broke: The New American Dream. It explores human behavior and trend following during the 2007-2009 market crash and premiered on The Documentary Channel fall 2009. The film was shot in 13 major cities on three continents. Top traders Larry Hite, Jim Rogers, David Harding, Mark Mobius, and Bill Miller appear. Nobel Prize winners Harry Markowitz and Vernon Smith also appear.

Product Details

• Hardcover: 288 pages
• Publisher: FT Press; 1 edition (June 24, 2011)
• Language: English
• ISBN-10: 0132695243
• ISBN-13: 978-0132695244
• Product Dimensions: 6.4 x 1 x 9.3 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (111 customer reviews)
• Amazon Best Sellers Rank: #14,463 in Books (See Top 100 in Books)
  • #94 in Books > Business & Investing > Finance

More About the Author

Michael Covel passionately teaches the lessons of the great traders who have made their fortunes over the last four decades. Forget Buy and Hold and CNBC; those are not Michael's game. His subject of choice is an obscure trading style called 'trend following trading' that has produced untold millionaires and a few billionaires. It is a style of trading ignored by the mainstream press, all universities and much of Wall Street. Michael is now considered the point person on trend following trading.

In 1996 Michael co-launched a website titled TurtleTrader.com®. It has attracted millions of visitors and thousands of clients all looking for insights into trend following trading. The journey to uncover the secretive world of the most successful money makers around, cracking their 'code' so to speak, honed Michael's investigative skills and built TurtleTrader.com®.

Following on the success of TurtleTrader®, Michael's first book Trend Following: How Great Traders Make Millions in Up or Down Markets (FT Press, Apr. 04, Nov. 05, Feb. 07 and Feb. 09) hit the streets. It profiled great trend following traders and explained trend following in print for the first time. It quickly became a bestseller and has sold over 100,000 copies. It is available in German, Japanese, Chinese (Complex and Simplified), Korean, French, Arabic, Turkish and Russian. The book struck a chord with individual and professional investors alike.

Michael's second book The Complete TurtleTrader: The Legend, the Lessons, the Results (Collins, Oct. 07 and Feb. 09) is different. It is the definitive behind the scenes look at a real life trading legend. It is a narrative account of super-trader Richard Dennis and his student traders nicknamed the 'Turtles'. You think trading success only happens for people born with a silver spoon? This book will prove you wrong! It is the true story of nurture trumping nature and has become an inspirational lynch-pin for tens of thousands.

Following his two books Michael directed his debut documentary film Broke. It premiered on 'The Documentary Channel' in October 2009. It explores human behavior (read: behavioral finance) during the 2007-2009 market crash. It is Michael's 75,000 mile odyssey through a Tokyo fish market, a Virginia sheep farm, a lottery store and Las Vegas and Macau poker tables all to learn how and why we make so many wrong financial decisions.

Michael and his team shot the film in 13 major cities and packed it with big time names in the trading world (Larry Hite, Jim Rogers, David Harding, Mark Mobius, and Bill Miller to name a few). Michael also conducted face-to-face interviews with legendary Nobel Prize winners Dr. Harry Markowitz and Dr. Vernon Smith. Michael's film is a non-partisan, timeless and common sense message that everyone can embrace.

www.michaelcovel.com/about

Customer Reviews

Most Helpful Customer Reviews

27 of 29 people found the following review helpful:

5.0 out of 5 stars Good lessons - two key points, July 7, 2011

By 

James Gnemo - See all my reviews

Amazon Verified Purchase

This review is from: Trend Commandments: Trading for Exceptional Returns (Hardcover)

Good book - a few thoughts for other readers to consider;

1.) Section titled 'Blowing Bubbles'
Economic bubbles occur frequently in the markets. Prices, either for the entire economy or for single stocks (reference World Com and Enron for example), will artificially inflate for some period of time. Then, usually in a spectacular fashion, they melt down. When this happens investors loose money.

Knowing that bubble exist and happen can lead to caution in the face of dramatic upswings in the markets. Covel brings attention to their existence in this chapter, something that many fail to admit. In this section Covel references famed Nobel Prize winner Vernon Smith's experiment on investors and bubbles. Apparently we need to suffer from bubbles twice before we loose our lesson.

For some this lesson is learned too late. For instance how many people lost substantial amounts of wealth in the 2000 tech declines only to do the same in the 2008 - 2009 financial implosion. If your losses occur in your 50's or 60's then you might not be able to recover. Or you might withdraw from the markets entirely, only to remove your self to smaller but stable returns from fixed income investments.

2.) Section titled 'Losers Average Losers'
This section really spoke to me. Covel has used this before in his blogs and other books. The premise is that if you buy a stock at 100 and it drops to 95 then you buy more. I grew up with the thought of averaging down, buy more on dips. If you liked the stock at 100 then at 95 its a bargain. I really didn't understand this completely until one day when I realized that the market price of a stock reflects its ability to earn money at any point in time. A stock trading at 100 that subsequently drops to 95 is showing that it might have trouble making money in the future.

Furthermore, getting married to one or two stocks simply because you like the story is not sound investment advice. Markets and stocks are something to make money from. You can't profit from a stock's story only from its price. Buy as markets and stocks are moving higher, dips in price are weakness.

There are many other sections of the book that are equally as important. I selected these two because they were lessons I needed to learn to be effective. The book is written in a short story format with sections lasting 2-3 pages. It is an easy read with a lot of information. You might find yourself reading the book multiple times.

60 of 71 people found the following review helpful:

5.0 out of 5 stars How to be a Market Wizard, June 30, 2011

By 

Steve Burns (Nashville, TN) - See all my reviews
(VINE VOICE)    (TOP 500 REVIEWER)   

This review is from: Trend Commandments: Trading for Exceptional Returns (Hardcover)

(What's this?)

This is a very valuable book because it distills the wisdom of some of the world's greatest traders into one place. Michael Covel has spent 15 years studying the methodology, risk management, and psychology of legends like Ed Seykota, Larry Hite, previous turtle traders, Paul Tudor Jones, Salem Abraham and many others. He has also studied the entire history of trend following and the writings of historical figures like Jesse Livermore, Richard Donchian, and Charles Dow.

This book is compilation of the principles that real life trend followers used to make and keep millions, and for some billions in the market. Any trader should be able to pick up this book and get inside the minds of these market wizards.

The problem is that many people do not "get" trend following. They ignore the success of these traders and want to opine about how it does not work, or complain that the draw downs are to large, or that these are only the "survivors" what about the trend following losers? I would like to say these are not the authors opinions these are proven principles, the success of this style of trading has been proven, draw downs occur for all traders (except for frauds like Bernie Madoff), and I do not know of any trend followers who blew up that used proper risk management.

I can say from personal experience of successful trading and my own track record of capital growth at a cumulative total of over 200% in an 8 year period when the market was essentially flat, that trend following works. The principles of Covel's book Trend Following was a major early influence for me. The principles I learned from Covel's book along with the Nicolas Darvas books showed me the importance of reversing my positions and stopping losses when a trend reversed. I went to cash in January of 2008 in my main two accounts as the trend reversed and that allowed me to avoid the entire market meltdown.

This book is easy to read and understand and gives you all the rules you need to begin to build your own trading plan. It does not try to predict the future or tell you what to trade, it shows you HOW to trade successfully.

The principles of this book match my own book. I have also spent many years studying the most successful traders and read over 165 of the top trading books on the market and traded successfully for 12 years. Michael Covel and myself have come to the same conclusions on what leads to success in the markets.

1. Do not try to predict, react to actual price movements.
2. Keep your risk at no more than 1% or 2% of total equity per trade to avoid the risk of ruin.(This is a baseline, risk varies by system)
3. Always trade in the direction of the immediate trend.
4. Always have an exit strategy before you enter a trade.
5. Trade the probabilities not opinions or hunches.
6. In every trade have a limited down side but an unlimited upside.
7. You must have the discipline to follow your tested system 100%.
8. The only people that really always win with the buy and hold strategy is mutual funds by charging management fees.
9. You must be committed to your trend trading strategy for the long term.
10. Watch financial news networks for news and entertainment, read Trend Commandments to learn how to trade.

17 of 18 people found the following review helpful:

5.0 out of 5 stars Excellent, July 25, 2011

By 

Forte, Bill - See all my reviews

Amazon Verified Purchase

This review is from: Trend Commandments: Trading for Exceptional Returns (Hardcover)

Im a newbie - figured others are the same place - here is my favorite list

1.) Trade everything: I used to get tied to one market or sector, he points out why this is not the best idea.
2.) Losers Average Losers - critical to trading success. I used to buy on dips as a way to lower my average entry price. I now see why this is stupid. He mentions Jesse Livermore - that is another book everyone should read too
3.) Zero Sum - I still have a hard time grasping that if I make money then someone else is loosing. But hey, I was on the other side for so long. Good read - but would have liked more detail on this chapter.
4.) Benchmarks - Everything is measured, even the stick used to measure is being measured. But its important to understand how to measure something in order to understand what you are trying to accomplish.
5.) Decide now - This is a hard one. You can't get your foot wet - you have to plunge right in. But im in!

Good book - quick read. Would have liked more detail around Zero Sum and a few of the more `trading' chapters. Im going to catch your other books and see if I get the material that I need for follow up.