Product Description

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

 

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Product Details

• Amazon Sales Rank: #163101 in Books
• Published on: 2007-03-16
• Original language: English
• Number of items: 1
• Binding: Paperback
• 448 pages

Ed Seykota, Trend Follower for 35 years and Original Market Wizard
Michael Covel's Trend Following: Essential.

Robert (Bucky) Isaacson, Managed Money and Trend Following Pioneer for 30+ Years
This is a valuable contribution and some of the best writing on trend following I've seen.

Charles LeBeau, author of Technical Traders Guide to Computer Analysis of the Futures Markets
This enjoyable and well written book is destined to become a classic.

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Customer Reviews

Interesting
Great piece of background reading, good for the beginner trying to work out what type of trading strategy to use. Trend Following appears to be the most profitable type of technical analysis strategies and Covel does go into the whys and wherefores of how they work. Though if you're interested in system development, strategies etc go for any of Van tharps, William ONeil, Martin Zweig and Vic Sperandeo books.

If you're interested in background reading I also recommend the Reminiscences Of a Stock Operator, Market Wizards and New Market Wizards. Trade Well!

Worth it in the end
It took a fair amount of effort to wade through the large amount of baloney, hype and hero-worship which this book contains. For example, what is a chapter about baseball doing in a book about trading strategies? However, there are definitely nuggets of useful information in this book, and the appendices at the end contain some actual recipes for trading strategies with some backtest results.
Ultimately Covel succeeds in what he is trying to do, which is to popularise the idea of trend-following. The idea is that you only enter a market when there is a trend (as defined by a breakout signal, of which there are many to choose from) and then ride the trend as long as possible. He gives examples of successful funds which manage money using these techniques (although the performance charts showing compounded returns don't always look quite as good when inspected carefully), so it seems it can be done. The book also shows that the discipline of risk-management and sticking to your knitting are more important than the source of the signals themselves.
Nor does Covel shy away from explaining that large losses (or 'drawdowns' as he prefers to call them) are possible. In fact in trendless markets a trend-following system is almost guaranteed to lose money as it buys high and sells low on 'false signals'.
In sum, a decent introduction to trend following. Pedants like me will be annoyed by some of the grammatical and spelling errors and there are a few inconsistencies too. One thing that really needs to be protested is the implication that anyone involved in financial markets who is not trend-following must be a fool. Buy-and-hold is derided, the example of Warren Buffett being refuted by the odd arguments that 1) he is just one man and 2) he also uses derivatives.
Let's imagine what the world would be like if everyone bought and sold like a trend-follower. First of all, there wouldn't initially be any market movement because everyone would be waiting for a signal. Then, if there was a change in price, every trend-follower would immediately chase it in the same direction to either zero or infinity. In fact there would be no market because if everyone was a trend-follower then there would be no-one willing to take the other side of the trend-followers' trades. To say it a slightly different way, with no notion of fundamental value, prices can get to silly levels (imagine bonds trading higher than the sum of their cashflows for example). In fact, the only reason trend-following has a chance of working is because of the existence of natural buyers and sellers (ie 'non-traders') who have business reasons for transactions, as well as value investors and arbitrageurs. Trend followers hope that these market participants are 'greater fools', and this may well be true while there are not a huge number of trend followers in the market.
Which brings me onto the final point- beware of becoming a trend-follower just as a successful book about trend-following is popularising the idea. It is clear that with a greater proportion of trend-followers in the market, the returns will be less (since trading is a zero-sum game as Covel repeatedly points out, if everyone was a trend-follower then for every winner there must be a loser).
I understand that Covel is already working on a book called 'Swing Trading: How to make money in sideways markets'

not a serious text
If you are serious about creating a trend following method then don't buy this book. The text demonstrates that Covel is a salesman, not a trader. His business model is based on making money by selling the idea of trend following. He is not trading with trend following himself -- rather writing hagiographies about trend followers without revealing any details -- giving generalized statements instead... The content is simplistic and basically garnered from other books on trading (e.g. Market Wizards). Note his annoying and frequent self-marketing references to his websites. After reading this you will be equipped to talk about trend following at dinner parties, but that's about it...

I recommend Perry Kaufman's books if you are a serious student attempting to create a trading system.