Trend Following: How Great Traders Make Millions in Up or Down Markets, New Expanded Edition, (Paperback) [Paperback]

Michael W. Covel (Author)

Book Description

Publication Date: March 19, 2007 | ISBN-10: 0136137180 | ISBN-13: 978-0136137184 | Edition: Expanded

THE INVESTMENT STRATEGY THAT WORKS IN ALL MARKETS...WITH PROOF TO BACK UP THE PROMISES *Reveals the trading strategy that made John W. Henry rich enough to buy the Boston Red Sox.*Contains 50+ pages of easy-to-understand charts, actual results from top Trend Followers.*Shows how to apply trend following in your portfolio--one step at a time, in plain English. "Trend Following will replace Market Wizards as the must-read bible for a new generation of traders." --Jonathan Hoenig, Portfolio Manager, Capitalistpig Hedge Fund LLC/Fox News Contributor "Michael Covel's Trend Following: Essential." --Ed Seykota, Trend Follower for 35 years and Original Market Wizard "Investment books that have a lasting appeal offer insight that resonates with a large number of investors. We believe Michael Covel's Trend Following will be such a book." --Richard E. Cripps, Legg Mason Chief Market Strategist "A mandatory reference for anyone serious about alternative investments." --Jon Sundt, President and CEO of Altegris "Michael Covel does an excellent job of educating his readers about the little-known opportunities available to them through one of the proven best hedge fund strategies. This book is like gold to any smart investor." --Christian Baha, CEO, Superfund "Please read [Trend Following] whether you think you have an interest in trend following or are not quite sure!Covel has hit a home run with it." --Gail Osten, Editor-in-Chief, Stocks, Futures & OptionsMagazine "Covel has created a very rare thing--a well documented and thoroughly researched book on trend following that is also well written and easy to read. This is one book that traders at all levels will find of real value." --John Mauldin, author of Bull's Eye Investing For more than 30 years, one trading strategy has consistently delivered extraordinary profits in bull and bear markets alike: Trend Following. Just ask the billionaire traders who rely on it...traders like John W. Henry, whose trading profits bought the Boston Red Sox! In Trend Following, New Expanded Edition, you'll meet them...and discover exactly how to use trend following in your own portfolio. This expanded edition includes more than 50 pages of easy-to-understand performance charts. It is the book multi-billion-dollar hedge funds have made mandatory reading for their staffs. Michael Covel goes right to the source, presenting powerful insights straight from the world's top trend followers, and debunking Wall Street myths and misinformation from well-known pros who ought to know better. You'll learn how to manage risk, employ market discipline, and, when the moment is right, swing for the home run. *Real proof, real data, real results *Decades of actual performance charts from professional money managers*All the information you need...in one number Why the market price tells you all you need to know to trade*Pinpointing targets of opportunity What to trade, when to trade, and how much to trade*How it's done: classic case studies Who profited from the global scandals of the last 15 years!and how they did it*Meet today's leading trend followers Extraordinary trader profiles, including top traders from the past 30 years MICHAEL W. COVEL is the founder and President of Trend Following . A researcher of the most successful trend following investment managers, he has been in the alternative investments industry consulting on trend following to individual traders, hedge funds, and banks for ten years. From his writing to public speaking, Covel pulls no punches. Passionately educating his clients in order to find that "edge" has made Covel a widely respected expert in the field. He writes for numerous industry publications and is continually quoted and interviewed by Barron's, Bloomberg, and RobTV, to name but a few. An experienced and successful entrepreneur, he is a frequent guest on national TV and radio shows and regularly gives presentations at international hedge fund conferences from Hong Kong to Tokyo, advising listeners on proper trading, decision-making, risk management, and trend following. Covel is also Managing Editor at TurtleTrader.com, the leading trend following news and commentary resource since 1996. Living and working in Virginia, he is a lifelong baseball fan. Contents Foreword by Charles Faulkner Foreword by Larry Hite Preface Acknowledgments 1 Trend Following 2 Great Trend Followers 3 Performance Data 4 Big Events in Trend Following 5 Baseball: Thinking Outside the Batter's Box 6 Human Behavior 7 Decision-Making 8 Science of Trading 9 Holy Grails 10 Trading Systems 11 ConclusionAfterword Introduction to Appendices A Fidelity Wealth-Lab Pro B Performance Guide C Short-Term Trading D Personality Traits of Successful Traders E Trend Following Models F Trading System Example from Trading Recipes G Modern Portfolio Theory and Managed Futures H Critical Questions for Trading Systems Resources Endnotes Bibliography About the Author Index

Editorial Reviews

Review

A recent interview with Michael Covel on Bloomberg Radio (6.5 MB MP3 audio file) about trend following. "Please read [Trend Following] whether you think you have an interest in trend following or are not quite sure. I guarantee you will be happy that you took the time. It, of course, covers how trend following works, how it's done, and who can do it, and it doesn't beat around the bush with generalities. Again, get this book. Covel has hit a homerun with it."
Gail Osten, Editor-in-Chief
Stocks, Futures & Options Magazine
Official Journal for Personal Investing in Stocks, Futures and Options "A mandatory reference for anyone serious about alternative investments."
Jon Sundt, President and CEO of Altegris "Michael Covel does an excellent job of educating his readers about the little-known opportunities available to them through one of the proven best hedge fund strategies. This book is like gold to any smart investor."
Christian Baha, CEO, Superfund "A most interesting book -- definitely a 'must have' on your shelf. Pull out the plastic and get it!...Trend Following is well constructed, well written and an excellent distillation of the research undertaken by the author. Backed up by trading 'legends' like Ed Seykota, it convincingly argues that the most successful trading systems are based on trend following...While you may read the book in bed, especially the first time, it is best read at a desk with a notepad handy. While seeming to come from the perspective of technical analysis it is still a very good book on trading psychology...The book is both a great read and an insightful textbook for all traders and investors."
Garnett Znidaric
Your Trading EdgeMagazine/strong>
Australia "Michael Covel's Trend Following: Essential."
Ed Seykota
Trend Follower for 35 years, Incline Village, NV
The Trading Tribe
Ed was originally profiled in The Market Wizards by Jack Schwager "Michael Covel's book is the definitive guide to trend trading. Backed by real world results from some of the biggest and best money managers in the United States, his book will put you on the path to successful trend trading."
Larry Connors
CEO, TradingMarkets.com "Covel has created a very rare thing - a well-documented and thoroughly researched book on trend following that is also well-written and easy to read. It touches on a wide variety of the principles and practices which make for successful trend following. This is one book that traders at all levels will find of real value."
John Mauldin
Millennium Wave Investments, Arlington, TX
Author of Bull's Eye Investing and editor of Thoughts from the Frontline "I think the book did a superb job of covering the philosophy and thinking behind trend following (basically why it works). You might call it the Market Wizards of Trend Following."
Van K. Tharp, Ph.D.
Author of Trade Your Way to Financial Freedom
President, International Institute of Trading Mastery, Inc.
Van was originally profiled in The Market Wizards by Jack Schwager.

From the Back Cover

THE INVESTMENT STRATEGY THAT WORKS IN ALL MARKETS...WITH PROOF TO BACK UP THE PROMISES

• Reveals the trading strategy that made John W. Henry rich enough to buy the Boston Red Sox.
• Contains 50+ pages of easy-to-understand charts, actual results from top Trend Followers.
• Shows how to apply trend following in your portfolio–one step at a time, in plain English.

“Trend Following will replace Market Wizards as the must-read bible for a new generation of traders.”

—Jonathan Hoenig, Portfolio Manager, Capitalistpig Hedge Fund LLC/Fox News Contributor

 

“Michael Covel’s Trend Following: Essential.”

—Ed Seykota, Trend Follower for 35 years and Original Market Wizard

 

“Investment books that have a lasting appeal offer insight that resonates with a large number of investors. We believe Michael Covel’s Trend Following will be such a book.”

—Richard E. Cripps, Legg Mason Chief Market Strategist

 

“A mandatory reference for anyone serious about alternative investments.”

—Jon Sundt, President and CEO of Altegris

 

“Michael Covel does an excellent job of educating his readers about the little-known opportunities available to them through one of the proven best hedge fund strategies. This book is like gold to any smart investor.”

—Christian Baha, CEO, Superfund

 

“Please read [Trend Following] whether you think you have an interest in trend following or are not quite sure…Covel has hit a home run with it.”

—Gail Osten, Editor-in-Chief, Stocks, Futures & OptionsMagazine

 

“Covel has created a very rare thing—a well documented and thoroughly researched book on trend following that is also well written and easy to read. This is one book that traders at all levels will find of real value.”

—John Mauldin, author of Bull’s Eye Investing

 

For more than 30 years, one trading strategy has consistently delivered extraordinary profits in bull and bear markets alike: Trend Following. Just ask the billionaire traders who rely on it...traders like John W. Henry, whose trading profits bought the Boston Red Sox!

 

In Trend Following, New Expanded Edition, you’ll meet them...and discover exactly how to use trend following in your own portfolio. This expanded edition includes more than 50 pages of easy-to-understand performance charts. It is the book multi-billion-dollar hedge funds have

made mandatory reading for their staffs.

 

Michael Covel goes right to the source, presenting powerful insights straight from the world’s top trend followers, and debunking Wall Street myths and misinformation from well-known pros who ought to know better. You’ll learn how to manage risk, employ market discipline, and, when the moment is right, swing for the home run.

• Real proof, real data, real results
  Decades of actual performance charts from professional money managers

• All the information you need...in one number
  Why the market price tells you all you need to know to trade

• Pinpointing targets of opportunity
  What to trade, when to trade, and how much to trade

• How it’s done: classic case studies
  Who profited from the global scandals of the last 15 years…and how they did it

• Meet today’s leading trend followers
  Extraordinary trader profiles, including top traders from the past 30 years

MICHAEL W. COVEL is the founder and President of Trend Following™. A researcher of the most successful trend following investment managers, he has been in the alternative

investments industry consulting on trend following to individual traders, hedge funds, and banks for ten years.

 

From his writing to public speaking, Covel pulls no punches. Passionately educating his clients in order to find that “edge” has made Covel a widely respected expert in the field. He writes for numerous industry publications and is continually quoted and interviewed by Barron’s, Bloomberg, and RobTV, to name but a few. An experienced and successful entrepreneur, he is a frequent guest on national TV and radio shows and regularly gives presentations at international hedge fund conferences from Hong Kong to Tokyo, advising listeners on proper trading, decision-making, risk management, and trend following. Covel is also Managing Editor at TurtleTrader.com, the leading trend following news and commentary resource since 1996.

 

Living and working in Virginia, he is a lifelong baseball fan.

See all Editorial Reviews

Product Details

• Paperback: 448 pages
• Publisher: FT Press; Expanded edition (March 19, 2007)
• Language: English
• ISBN-10: 0136137180
• ISBN-13: 978-0136137184
• Product Dimensions: 6.9 x 1.2 x 9.2 inches
• Shipping Weight: 1.7 pounds
• Average Customer Review: 3.7 out of 5 stars  See all reviews (107 customer reviews)
• Amazon Best Sellers Rank: #623,486 in Books (See Top 100 in Books)

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

Most Helpful Customer Reviews

289 of 306 people found the following review helpful

5.0 out of 5 stars Hard Cold Reality Makes A Stimulating Read June 21, 2004

By A Customer

Format:Hardcover

What's great about this book is that it goes straight for jugular of anyone who can't stop themselves from making predictions about the markets. Like those chart reading traders who think they can actually forecast the market direction. Prediction with charts is a losing game. If 100 traders stare at a chart, they come up with 100 different subjective interpretations. This book may actually make them realize that pretending they have unique skill through years of ink blot study is just blowing smoke.

Better yet this book is not based off hypothetical testing or experiments in what may work. It uses real performance data from guys who have traded for decades as trend followers. If you worship technical indicators as "it" don't read this book unless you want a hard cold splash of reality. If you worship technical indicators as some market tonic -- go ahead -- but don't forget the best in the business do nothing of the sort.

One of my favorite parts is the description of the hundreds of millions of dollars trend followers won at the same time Long Term Capital Management was imploding and losing their shirts. Wow, what an example of risk and volatility in stark terms.

But ultimately it is the no holds barred condemnation of fundamental analysis that sticks with me. Trend followers don't waste their time trying to understand forces influencing market participants (fundamental analysis) They care about the market price and what they should do in response to market price movement. Isn't that a goal for all of us? Round of applause for the diligent research and clear writing.

306 of 325 people found the following review helpful

5.0 out of 5 stars Tired of the games? June 30, 2004

By A Customer

Format:Hardcover

Why should you read this book? Is the book worth the time and effort? The book layed the foundation for my trading career. Brick by brick and chapter by chapter the author supported why trading as a trend follower is so important. Examples of the successes of current trend followers are peppered through the book.

Does the author give you the secrets to trading? No. Are there any secrets to trading? No. Buy if the price is going up and sell short if the price is going down. Is it that simple? Yes. The author goes out of his way to show example upon example of successful trend traders. These traders are not Wall Street names. They do however, beat the S&P on average year after year, and do so very quietly.

What does it take to be successful? How can I be successful? Simple, find someone who has what you want and then model their behavior. Find a mentor. If you want to make money in the markets then model the behaviour of those who are successful. Granted most of these traders would not take you under their wing, so buy the book and let it serve as your focus. Their behavior is thoroughly outlined through the pages.

People with nothing to say always talk the loudest. In trading the ones who have nothing yell.

242 of 256 people found the following review helpful

5.0 out of 5 stars A Must Read For Anyone Who Has Lost $$ In The Market May 7, 2004

By "baroquebespoke"

Format:Hardcover

I heard about this book from a buddy of mine who trades using a mechanical system similar to trend following. Now I know why he recommended it. The book is a must read for investors and traders alike. Had I read this book three years ago I would have known why my investments were getting slammed by the bear. The author knows his subject inside-out and breaks it down in so many ways, I can't help but be embarrassed by my once magical belief in my broker's insight. I particularly recommend the chapter on behavioral finance that speaks to everyone who has had gut wrenching losing spells.