93 of 108 people found the following review helpful
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.
28 of 31 people found the following review helpful
Anyone who has read any of Michael W. Covel's books knows from the outset that this newest book TREND COMMANDMENTS is going to be not only a learning experience but a very supportive tome of advice and reassurance about a subject few of us understand. Having read 'The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires' this reader jumped at the chance to see what else Covel has up his sleeve.
Trend Trading may seem like yet another of those big money terms that leaves the bulk of us on the outside. But as presented by Covel it is understandable as a concept and accessible as a means of approaching the money market. By definition, 'Trend following is an investment strategy that tries to take advantage of long-term moves that seem to play out in various markets. The strategy aims to work on the market trend mechanism and take benefit from both sides of the market, enjoying the profits from the ups and downs of the stock or futures markets. Traders who use this approach can use current market price calculation, moving averages and channel breakouts to determine the general direction of the market and to generate trade signals. Traders who employ a trend following strategy do not aim to forecast or predict specific price levels; they simply jump on the trend and ride it.'
And that is exactly what Covel encourages in this well-written book. He offers insights into the strategies that the big moneymakers use to be true winners 'grounded in real performance results and not squishy opinions.' In these chaotic economic times it is comforting to read a book by an informed man who tells it like it is and follows those realities with his own brand of optimism and self-sufficiency. the book reads well, does not bog down with data charts that are page flippers for novices, but steadily stands behind our insecurities and creates positive transformations. Grady Harp, July 11
123 of 149 people found the following review helpful
Writing this review goes against my visceral feelings. After reading this book, I have an almost overwhelming desire to be subjective. But, keeping that in check, these are my objective evaluations.
Ever been to one those free seminars that promise to teach you how to become a millionaire in your spare time? I have not, but I do know that they don't teach you anything. They are a prelude for an expensive course that promises to teach you how to become a millionaire in your spare time. Which of course it doesn't, but that's because you didn't focus hard enough. This is like the seminar, except that it is not free and there is no follow-up course. After reading this book the only thing you will know about trend trading is what you knew when you started (actually more likely less). This book is pure salesmanship, pretending to teach you about trend trading, when all it does is give a sales pitch that trends are the thing. Most of its contents are glowing reports of the success of the writer's friends, who oddly happen to be the same people who wrote the endorsements in the book description. And, to give it objectivity, it throws in personal attacks on W. Buffett and "value investing", but who, it is disclosed, is actually a trend trader, or not, depending upon which paragraph you read.
The book contains not one useful idea about trading trends. Worse, it is dramatically self-contradictory:
Never get greedy, no one can predict the market tops, versus the secret of success is letting your winning positions ride.
Always let your winning positions ride versus be sure to use stop loss orders to prevent reversals. Well how do you account for interim fluctuations, the variability that is a natural part of trends. Not a word, just be sure to watch for them, know when to get out, and let your winning positions ride, but use stop orders.
Diversification puts you in a better position to hit the big one versus diversification means that your portfolio will trend toward the mean and that is death, go for the outliers.
Money management is key to staying in the game [which assumes that you are losing] versus greater rewards come from greater risks.
Now, assume that you, like me, already believe that there is some economic merit to trend trading, what does it teach you about how its done? Nada, nothing, zilch. Not a glimmer of how to spot a trend; not a word how and when to get out of a position; how to account for variability in placing stop loss orders; what constitutes a trend; how do you factor in the various types of risk? Simple, let the numbers be your guide. Could we have just one chapter to give a clue to which numbers and how to let them guide us? No.
Reading this book is like paying to spend a day listening to a used car salesman try to sell you a clunker. If you want to learn how to be a used car salesman, this is your script. If you want to know about the car, forget it.
This book is worse than useless, its a complete waste of time (and you only have so much of that). It does a disservice to the concept of trend trading: making it look like a huckster's con game.
If you are looking for useful advice, look elsewhere.
36 of 43 people found the following review helpful
on July 3, 2011
Please read this entire review before coming to any conclusions.
After reading, 'Trend Commandments: Trading for Exceptional Returns' I was going to give it one or two stars. My reason was as a newbie in Trend Following and after reding the entire book I still had no idea how to start a trend following strategy.
Then I realized that wasn't the book or the authors fault. I simply started with the wrong book. I should have first read a book explaining Trend Following and how to do it. My Bad!
For anyone with even a basic knowledge of Trend Following this book will be a real gem. I suspect it will go down as a classic in the field. Mr Covel's writing style and knowledge of how Wall street really works,trading in general,and Trend Following in particular are outstanding. He's definitely, "The Real Deal".
Mr Covel I was wondering if newbies to Trend Following such as myself would be better served to wait and buy your not yet released book(as of 7/3/2011), 'The Little Book of Trading: Trend Following Strategy for Big Winnings (Little Books. Big Profits)! Perhaps read it a few times(for maximum retention) and then read or re-read, 'Trend Commandments: Trading for Exceptional Returns)' Any other advice from yourself or fellow readers on how a newbie could start would be helpful and most appreciated!
In conclusion, I believe this is an excellent book that belongs in everyone's Trading and Investing library( just be sure to get it off the shelf and re-read it from time to time.) Please learn from my mistake and make sure you have a thourough knowledge of what Trend following is and how to do it before reading this fine companion book.
I hope this review was first of all fair to Mr Covel and secondly helpful to anyone who reads it. Also I would like to say I have been an investor in the market(mostly mutual funds and for the last several years a technical trader who learned from Stan Weinstein's fine book, 'Secrets of profiting in Bull and Bear markets". But as stated above I'm new to trend following as expoused by Mr Covel.
24 of 28 people found the following review helpful
on July 25, 2011
In Trend Following Covel lays the foundation of understanding Trend Following, the Complete Turtle Trader teaches you how to Trend Follow like a turtle, Trend Commandments teaches you how to think like a trend follower. Getting your mindset straight might be the most important step for many so they set aside the things they think they know about the markets and begin to adopt the thought patterns of greatest trend following traders of all time. Covel to a certain degree slaps your brain so it doesn't run non-trend following code. Get out your highlighted so you can periodically review the timeless material in this book. I have read almost everything Covel has published, all have impressed, including this work. On to the next Covel book, The Little Book of Trading. I've already cherry picked a few chapters of that book, once again, it's looking very promising.
30 of 36 people found the following review helpful
on August 27, 2012
I was certainly looking forward to receiving this book when I ordered it. As a stock and options trader, I was looking for a book that would help me better identify and analyize trends before investing, as well as entry and exit points. Did this book provide any of that information? The answer is "NO". This book is obviously written by an egotistical individual that simply likes to hear themself talk and ramble on. What's worse, it appears that he has found a way to con people into listening to his dribble.
Obviously, investing long or short based upon the current market trend is one of the most accepted ways of investing. It is not something new or novel, that is distained by many investors, as this author would have you believe. In addition, there is other ways to analyize and play the markets that are also successful. However, this author appears to simply want to trash every other investment method and spend an inordinate amount of time patting himself on the back.
The author's dribble would not be so bad if at least he provided some concrete information to the reader on how to do better trend analysis. However, no where in this book is a reader going to find any information on how the author actually implements and follows such an investment methodology.
Bottom line, don't get ripped off. The sole purpose of this book is obviously to make the author money, but let me tell you it certainly will not convey to you as a reader even one piece of useful information. This is the first product review I have ever written, and I am writing it in hope that other individuals do not waste their money and buy this book.
23 of 27 people found the following review helpful
on July 1, 2011
If you are set in your ways...
If you are of the mindset that you must watch the financial news continuously...
That you must know the reason WHY markets went up, down, or sideways
That your financial advisor, mutual fund manager, or your 22 year old bank rep has a magic elixir to make money in the markets, then maybe, this book isn't for you. However, even if the above describes you, but you're willing to open your mind, the contents in the book can put you on the right path.
Covel doesn't have a crystal ball, and doesn't claim to have one. If that is what you're looking for, then you might as well take out your retirement account now, and blow it all on lottery tickets. Not only does he not have, or claim to have a crystal ball, but skewers the members of the financial industry who have built their empires on this very fraud; and backs it up using their own words. Those of us who have been following Covel's works for some time now love, and have come to expect his blunt honesty, and wouldn't have it any other way.
If you're looking for the Holy Grail, where everything is lollipops and roses, this book will disappoint you. But, if you're looking for a way to take control of your investment future, willing to admit that no one can predict where markets will go, and come to the table with your eyes wide open, then GET THIS BOOK!
One caveat: One thing Covel doesn't do in Trend Commandments, or in any of his works---provide you with the discipline and desire to win. That's up to you.
26 of 31 people found the following review helpful
on July 9, 2011
There are very few authors providing real knowledge of successful traders, Trend Commandments delivers that and fits in nicely with the other works by Covel. This book is great reinforcement of the concepts laid out in Trend Following and the Complete Turtle Trader.
If you are looking for precise rules on when to enter and exit the market, you will not find it here. And if you are looking for a "how to" book you have already lost. Only you as an individual can be truly comfortable with a trading system, your trading system, not someone else's. If you want a technical book on how to build a trading system read Pardo's work.
Approach and read this book with the proper mindset and its great.
14 of 16 people found the following review helpful
on December 9, 2012
The word disappointment, captures my feeling after reading this book. As a successful trend trader who has mentored others, I was hoping for this book to be helpful to folks new to investing and trading. My motives were pure as the driven snow, I wanted something to answer the constant question "How do you do it?" I figured, if this book is as great as I've heard, it would be a great recommendation for new investment enthusiasts and spare me some time trying to explain how the world works.
The book accomplishes neither purpose. In fact it might wind up costing me time trying to explain the numerous contradictions entombed in it's pages.
If the author was genuinely trying to teach his reader something of value, his editors failed him miserably by including what they did and discarding the better content. If this final book was all the content the editor's had to work with, then shame on them for publishing it. It reads like the too numerous to count free e-books offered by various wealth system peddlers. Lots of pithy quotes and vague references to successful strategies, that never seem to be described.
The difference here, this ones not free, you're paying to be told you need to go to the author's website to pay mucho bucks more to get the good real stuff you need to succeed.
If you are genuinely interested in learning about trend trading and the truly hard work and rewards involved in doing it well, keep you money and look to the classics on markets and analysis. One thing all trend traders know is that sometimes the best play in a given market with no trend or opportunities is to keep your powder dry and stand aside. That's my advice here, stand aside, keep you money or invest in a better alternative.
13 of 15 people found the following review helpful
on June 30, 2012
I buy and read a good chunk of finance books. Finance is something that interests me, and at the same time I want to be a better trader and investor. I have also recently started taking notes on all the finance books I read. I usually right down anything that will better help me trade or invest in assets.
There is very little in this book that I could say is valuable. This is a fantastic book for someone to read and then say "Wow, I learned a lot", but in reality there is very little technical information in it. It essentially acts as an advertisement for Covel's entire system. Sure it's entertaining, but I don't waste my time with entertaining things. I want to actually make money.
I was hoping for a technical guide to Trend following when I bought this book. What I got was the same BS you can find online about "being emotionally strong" and "dare to be different". It angers me to think that people are making money off idiots who think that this constitutes a trader's education. Yes the emotions are important, but they are one of the most basic parts (or a prerequisite) to being a good trader. You don't need a whole book to talk about emotions.
I strongly discourage you from buying this book. I'm personally going to return my copy (even if I get a deduction because of return shipping). I can't condone garbage writing with all fluff and no substance.
Do yourself a favor and don't buy this book.