Trend Following: How Great Traders Make Millions in Up or Down Markets, New Expanded Edition - Hardcover

Covel, Michael W.

Hardcover

ISBN 10: 0131345508 ISBN 13: 9780131345508

Publisher: Financial Times/ Prentice Hall, 2005

Synopsis

How did John W. Henry quietly become rich enough to buy the Boston Red Sox? How have traders like Keith Campbell, Bill Dunn, Jerry Parker, and Salem Abraham consistently generated immense wealth in bull and bear markets? The key is trend following -- the only strategy proven to consistently make money. Michael Covel reveals the "underground" network of little-known traders and hedge fund managers who've been following trend for decades. He introduces its fundamental concepts and techniques, showing why market prices contain all the information investors need, and how to understand price movements well enough to profit from them. Using 100 pages of easy-to-understand charts from top trend followers, Covel proves the strategy works -- and shows why only a technical system based on following price trends can win over the long term. Covel presents more than a decade's worth of data:  even more backtested trend following results.  Covel thoroughly debunks misinformation and failed advice. This timely book capitalizes on today's intense volatility and uncertainty to give investors what they're desperately searching for: a strategy that really works.

About this title

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.

From the Author:

This book is the result of an eight-year "hazardous journey" for the truth about Trend Following. It fills a void in a marketplace inundated with books about finance and trading but lacking any resource or, for that matter, practically any reference to what we believe is the best strategy to consistently make money in the markets. That strategy is known as Trend Following. Trend Following seeks to capture the majority of a trend, up or down, for profit. It trades for profits in the major asset classes• stocks, bonds, currencies, and commodities. However simple the basic concepts about Trend Following are, they have been widely misunderstood. Our desire to correct this state of affairs is what, in part, launched our research. We wanted to be as objective as possible, so we based our writing on the available data:

• Trend followers' month-by-month performance histories.
• Trend followers' published words and comments over the last 30 years.
• News accounts of financial disasters.
• News accounts of the losers in those financial disasters.
• Charts of markets traded by trend followers.
• Charts of markets traded by losers in the financial disasters.

It is a pleasure to recognize the colleagues, mentors, finance writers, traders, and friends who contributed directly and indirectly to this book.

William W. Noel, III and Justin Vandergrift must be singled out for special mention. They were the core members of our original Trend Following research team. The book would not have come together without their hard work.

I am particularly grateful to those traders - Ed Seykota, Bill Dunn, Daniel Dunn, Mark Rzepczynski, Pierre Tullier, Jason Russell, Easan Katir, Jonathan Hoenig, and Paul Mulvaney - who were generous with their feedback under tight writing deadlines. And thanks also to Martin Bergin of Dunn Capital Management for an initial introduction to Bill Dunn.

The support of Charles Faulkner must be acknowledged as well. He shared his intellect, enthusiasm, and most of all, his time, reading and critiquing various drafts. His advice kept me out of trouble, and his patience was extraordinary.

Celia Straus, Jerry Mullins, Withers Hurley, Elizabeth Ellen, Justice Litle, Barry Ritholtz, Mark Rostenko, Tom Rollinger, Arthur Maddock and Bob Spear also made valuable contributions.

Throughout years of research, I've benefited repeatedly from the trading wisdom and experience of John W. Henry, Salem Abraham, Peter Borish, Jonathan Craven, Mark Hawley, John Hoade, Shaun Jordan, Carol Kaufman, Jane Martin, Leo Melamed, Larry Mollner, Kim Hunter, Gibbons Burke, Chuck LeBeau, and Leon Rose. I want to especially thank Jerry Parker for answering questions early in my career.

And thank you to the following publications and writers who generously allowed us to quote from their work: Michael Mauboussin, Sol Waksman and Barclay Managed Futures Report, Futures magazine, Managed Account Reports, Michael Rulle of Graham Capital Management, Technical Analysis of Stocks and Commodities magazine, and Winton Capital.

I am also indebted to the following authors whose works continue to be treasure troves of information and insight: Morton Baratz, Peter Bernstein, Clayton Christensen, Jim Collins, Jay Forrester, Tom Friedman, Gerd Gigerenzer, Peter Todd, Daniel Goleman, Stephen Jay Gould, Alan Greenberg, Larry Harris, Robert Koppel, Edwin Lefevere, Michael Lewis, Jesse Livermore, Roger Lowenstein, Ludwig von Mises, Lois Peltz, Ayn Rand, Jim Rogers, Jack Schwager, Denise Shekerjian, Robert Shiller, Brett Steenbarger, Van Tharp, Edward Thorp, Brenda Ueland, and Dickson Watts.

This book could only have come to fruition with the editorial guidance of Jim Boyd at Financial Times Prentice Hall, as well as the able assistance and attention to detail of Dennis Higbee, who copyedited. I also want to thank Donna Cullen-Dolce, Lisa Iarkowski and John Pierce for their remarkable production and marketing skills. And to Paul Donnelly at Oxford University Press, I owe a special debt of gratitude for seeing the potential of our initial proposal.

Michael Covel
Trend Following

About this edition

• Publisher: Financial Times/ Prentice Hall
• Publication date: 2005
• ISBN 10: 0131345508
• ISBN 13: 9780131345508
• Binding: Hardcover
• Edition number: 1
• Number of pages: 448