Article Trend Following: An Interview With Michael Covel

ptcm

Junior member
40 1
Most of the serious traders in the US laughed at him.

Michael Covel is not a real trader. In fact, most of the serious traders in the US laughed at him.

I wouldn't even waste my breath on this guy...
 

alpha_monkey

Member
97 5
ptcm said:
Michael Covel is not a real trader. In fact, most of the serious traders in the US laughed at him.

I wouldn't even waste my breath on this guy...
I read Trend Following a few months ago.
It's a story book.

A far better education on trend following is available, free, via Curtis Faith's www.originalturtles.org.
 

FXSCALPER2

Established member
964 280
This is one book I really really disliked. It is written by someone who hasn't got a clue. Trend following may be a good way to trade, I don't know, but this guy makes it like a religion. He criticises everyone who doesn't follow trends. He clearly doesn't know what he is talking about. His argument for not trading short term is just crap. He says it is hard. Yeah, so what is new? He says he has never seen evidence that swing trading works!! He clearly doesn't know that the price series scales: you can't tell a 5 minute chart from a daily chart by just looking at it. If daily or weekly charts are tradable, so are 5 minute charts. He basically wrote a whole book to tell us that using a system that is right 30% of the time is some kind of big deal. I know you can make money with a system that wins only that often, but to say that is the best thing to do is just ridiculous and shows that the guy as no idea what trading is about.

It is amazing how all sorts of clueless people manage to hoodwink the trading community.
 

dbphoenix

Legendary member
6,952 1,244
Since I trade trends, I have to agree with the nay-sayers that this is a pretty idiotic article. Although I may have missed it, I never located his definiiton of "trend", which, I would think, would be pretty eseential to an article purported to be about trading trend (in fact, he says that how to identify trend is the wrong question and that traders are too fixated on it . . . ).

I understand that many of these articles are designed to introduce a subject. But these introductions can be basic and simple without being misleading or downright inaccurate. Covel's biases, unsupported by any objective evidence, are no help either.
 

FXSCALPER2

Established member
964 280
dbphoenix said:
Since I trade trends, I have to agree with the nay-sayers that this is a pretty idiotic article. Although I may have missed it, I never located his definiiton of "trend", which, I would think, would be pretty eseential to an article purported to be about trading trend (in fact, he says that how to identify trend is the wrong question and that traders are too fixated on it . . . ).

I understand that many of these articles are designed to introduce a subject. But these introductions can be basic and simple without being misleading or downright inaccurate. Covel's biases, unsupported by any objective evidence, are no help either.
Hi db,

I actually read the book and it is just bad. He misses one very basic point: the method one chooses is mainly a function of practicalities. This is the kind of ignorance you would expect from someone who just read books about trading and regurgitates what they read as if it is some kind of absolute truth. For example, I trade full time and can afford to take a lot of trades. Under these circumstances, the thing to do is just to trade as much as possible. Covel doesn't understand the opportunity factor, for example. He completely misses this point: of two winning methods, one should always choose the one that generates more trades. The more the better. If one has an edge, one is better off trading 1000 times a year than 10 times a year. He also says the one thing every so-called guru repeats ad infinitum: the money is made on the big trends. No it isn't. It depends on the side of your account. Someone who bet £1/pip and caught all the 2000 pip down move on the EURUSD last year would have made just £2000, whereas someone who was in and out and made the same number of pips would have won a lot more.

The guy is just an ignoramus who wouldn't be allowed to clean the toilet in any other business. How come there are no books written by non-doctors telling GP'S how to practice medicine. It is all a big joke.
 

dbphoenix

Legendary member
6,952 1,244
Your "more trades the better" has a couple of qualifiers that novices should not overlook.

But FYI, you may be interested in the following study which I quote in my book (I've uploaded it as an image because that's easier than going through all the conversions required to just post it).
 

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charliechan

Experienced member
1,008 119
dbphoenix said:
Your "more trades the better" has a couple of qualifiers that novices should not overlook.

But FYI, you may be interested in the following study which I quote in my book (I've uploaded it as an image because that's easier than going through all the conversions required to just post it).

what book is that?

are you published?
 

dbphoenix

Legendary member
6,952 1,244
A general beginner e-book. If you're interested, click the www below. But you're likely well past its contents.
 

TheBramble

Legendary member
8,395 1,170
dbphoenix said:
But FYI, you may be interested in the following study which I quote in my book (I've uploaded it as an image because that's easier than going through all the conversions required to just post it).
dbp -can you supply the source of your quoted material or even better, perhaps give us a little more detail as to what the market timing and sector timing column data refer. Certainly looks an interesting piece of research.
 

dbphoenix

Legendary member
6,952 1,244
I wrote this ten years ago, and at the time, the source was CDA/ Weisenburger. But I'm sure there are plenty of similar studies, which can now be more easily found with Google.

One should also note that this particular study coincides with one of the more spectacular bull markets. So a study covering the years from '96 to '05 would be enlightening, and probably even more dramatic, since a "timer" would have been out in March "00.
 

FXSCALPER2

Established member
964 280
dbphoenix said:
Your "more trades the better" has a couple of qualifiers that novices should not overlook.

But FYI, you may be interested in the following study which I quote in my book (I've uploaded it as an image because that's easier than going through all the conversions required to just post it).
Hey db,

If you have an edge, it is a mathematical fact that you will do better by taking as many trades as possible. I don't know how your chart argues against this.
 

dbphoenix

Legendary member
6,952 1,244
FXSCALPER2 said:
Hey db,

If you have an edge, it is a mathematical fact that you will do better by taking as many trades as possible. I don't know how your chart argues against this.
I didn't say it did. I said that your comment had a couple of qualifiers attached, such as an edge, which would go right past most novices.
 

FXSCALPER2

Established member
964 280
dbphoenix said:
I didn't say it did. I said that your comment had a couple of qualifiers attached, such as an edge, which would go right past most novices.
Oh I see. I just couldn't imagine any one thinking trading a lot is good without having an edge. LoL
 

chump

Senior member
2,212 274
FX,
"If you have an edge, it is a mathematical fact that you will do better by taking as many trades as possible
" ...not necessarily although I understand what you are trying to say with this.... when you have an edge what is a mathematical fact is that your return will be higher by applying the maximum financial muscle to that edge that your system will permit. Whilst that might mean taking more trades it could equally be true that taking the same number of trades with more size might hold true. It depends on how your edge is constructed surely ?
 

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