Trend Following: How Great Traders Make Millions in Up or Down Markets (Financial Times Prentice Hall Books) [Hardcover]

Michael W. Covel (Author)

Book Description

Publication Date: April 23, 2004 | ISBN-10: 0131446037 | ISBN-13: 978-0131446038

How did trader, John W. Henry, start out as a farmer and end up a billionaire and owner of, first the Florida Marlins and now, the Boston Red Sox? How do traders like Bill Dunn, Ed Seykota and Keith Campbell continually pull profits in the hundreds of millions from both bull and bear markets? The answer is that they are trend followers. Trend following is the only strategy to consistently make money in the markets. Leading expert Michael Covel reveals the underground network of these little-known traders and hedge fund managers who have practiced trend following for years. He pulls back the veil on their strategies by introducing the basic concepts/techniques of trend following such as why the market price contains all the information a trader needs. Covel rigorously reviews and analyzes years of detailed performance data to prove without question that trend following works. He breaks down trend following strategies including how to make volatility work; how to control risk; and how to make successful trading decisions "from the gut."Covel shows why trend following is ideal for individual traders who self-manage their portfolios or for the individual investor searching for a new type of investment advisor. Along the way he debunks an immense amount of misinformation/failed advice from pros who ought to know better. This timely book capitalizes on today's massive move back into the markets and investors' renewed determination to find strategies that really work.

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 Edge Magazine/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.

--This text refers to an out of print or unavailable edition of this title.

From the Back Cover

See all Editorial Reviews

Product Details

• Hardcover: 336 pages
• Publisher: Financial Times Prentice Hall (April 23, 2004)
• Language: English
• ISBN-10: 0131446037
• ISBN-13: 978-0131446038
• Product Dimensions: 9.3 x 7.2 x 1.2 inches
• Shipping Weight: 1.8 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (101 customer reviews)
• Amazon Best Sellers Rank: #491,275 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

Customer Reviews

Most Helpful Customer Reviews

287 of 304 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

This review is from: Trend Following: How Great Traders Make Millions in Up or Down Markets (Financial Times Prentice Hall Books) (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.

235 of 248 people found the following review helpful:

5.0 out of 5 stars Financial Manna from Heaven, May 19, 2004

By 

Robert Spears (Charleston, WV United States) - See all my reviews

This review is from: Trend Following: How Great Traders Make Millions in Up or Down Markets (Financial Times Prentice Hall Books) (Hardcover)

Having been an active investor for over 20 years, I found the
material very enlightening. The basic strategy of trend
following opened my eyes to the opportunities in both bull and
bear markets. Wished I had read this book a few years ago!

303 of 322 people found the following review helpful:

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

By A Customer

This review is from: Trend Following: How Great Traders Make Millions in Up or Down Markets (Financial Times Prentice Hall Books) (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.