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Trend Following: How to Make a Fortune in Bull, Bear, and Black Swan Markets
Want to take the financial journey to a new investing philosophy that might very well affect the rest of your moneymaking life? No one can guarantee the yellow brick road, but Michael Covel promises the red pill will leave you wide freaking awake.Trend Following reveals the truth about a trading strategy that makes money in up, down and surprise markets. By applying straightforward and repeatable rules, anyone can learn to make money in the markets whether bull, bear, or black swan--by following the trend to the end when it bends. In this timely reboot of his bestselling classic, Michael Covel dives headfirst into trend following strategy to examine the risks, benefits, people, and systems. You'll hear from traders who have made millions by following trends, and learn from their successes and mistakes--insights only here. You'll learn the trend philosophy, and how it has performed in booms, bubbles, panics and crashes. Using incontrovertible data and overwhelming supporting evidence, with a direct connection to the foundations of behavioral finance, Covel takes you inside the core principles of trend following and shows everyone, from brand new trader to professional, how alpha gets pulled from the market.Covel's newest edition has been revised and extended, with 7 brand new interviews and research proof from his one of kind network. This is trend following for today's generation. If you're looking to go beyond passive index funds and trusting the Fed, this cutting edge classic holds the keys to a weatherproof portfolio.Meet great trend followers learning their rules and philosophy of the game Examine data to see how trend following excels when the you-know-what hits the fan Understand trend trading, from behavioral economics to rules based decision-making to its lambasting of the efficient markets theory Compare trend trading systems to do it yourself or invest with a trend fund Trend following is not prediction, passive index investing, buy and hope or any form of fundamental analysis. It utilizes concrete rules, or heuristics, to profit from a behavioral perspective. Trend Following is clear-cut, straightforward and evidence-based and will secure your financial future in bull, bear and black swan markets. If you're finally ready to profit in the markets, Trend Following is the definitive treatise for a complex world in constant chaos.
688 pages, Hardcover
First published April 23, 2004
455 people are currently reading
2027 people want to read
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Displaying 1 - 30 of 82 reviews
April 22, 2019
For the Haters versus Lovers of this book
Let me start with Haters, their reasoning..
All the haters are correct that this book contains lot of cliches with no actual tutorial on how to build your own system. A lot of chapters are anecdotes, famous quotes, and even baseball analogies that seem awfully far stretched from trading. All of the complaints are correct, and I wouldn't argue with any of them.
Let me end with why this book is the ultimate book for learning about trend following...
I can imagine that most people who hate on this book, carry the same attitude in life toward anything they endeavor on. The haters simply wanted to be told a very specific method so they can start using and quit their mundane jobs and all become millionaires.
Any hater who superficially scan for the holy grail will be disappointed, of course they will, because they can't think long enough about why this book was written.
Imagine if Michael Jordan publishes a book about his success, and you purchase it and get disappointed why Jordan didn't include his holy grail for his basketball success. How would you feel if your friend complained that Jordan didn't tell people specifically how he succeeded?
The ultimate truth is, trading is pretty much like a sport, can't be taught but it can be learned, through numerous trial-and-error, self doubting and endless nights of questioning.
Richard Dennis once said, he could publish all his rules in news paper and no one would use it.
Alexander Elder and Tom Basso discovered that entry really didn't matter, as long as exits are well taken care of.
William Eckhardt said that emotional intelligence is probably the determining factor in trading success.
Anyone can starting using the rules published in Covel's complete turtle book, the 4 week high entry with 2x ATR price stop coupled with perhaps 20day moving average time stop. But to which extent are you able to use that system perfectly depending primarily on your ability to stick to the system without doubting.
Of course time-to-time you will modify the system due to new experience gained.
But the specific setup, there is no holy grail.
Covel's book is good in inspiring people who already have a deep understanding of trend following, however it does not serve to teach you how to trend follow. Much like no basketball player will teach you specifically how to cross and shake an opponent, because it's not possible to teach. Any book promising to teach you how to pick up chicks at a bar are usually charlatan who's making false promises.
No skills whatsoever in any arena in life can be taught. The best hackers are self taught, the best photoshop users are self taught, the best rappers are self taught. The idea that someone can transfer his/her knowledge to you through a speech/book is just nonsense. Experience cannot be replaced by simply reading a book, or listening to audiobook on Youtube.
My reasons why I love this book:
Because it shows that trend following works, and it makes sense to me. Trend following system hibernates during ranging period that whipsaw, forcing you to trade smaller and smaller using the 1%/2% equity risk rule, and makes you trade larger during trending period. The purchasing power is well protected/preserved during unfavorable market. If this doesn't make sense to you then I don't know what makes sense.
Trend following does not discriminate against any asset classes, or previous highs/lows. Any trending signal will be picked up and force the trader to ride until it dies down. Any news, fundamental figures, comments from analyst are ignored because trend followers expect that future cannot be predicted but trend won't stop until it "stops". This makes total sense to me and I'm happy to put my money on the line because it sounds logical.
Conclusion:
Don't pick up this book if you're hoping to be taught and transformed into a trend following trader and start making millions, you won't, just like any book that teach you how to pick up chicks and dating won't transform you into an alpha male with super jacked muscle.
Do read this book if you want an extensive background info on why trend following works, and how the successful traders look at the markets.
You have to ultimately put in the work to gain that experience to succeed as a trader, which isn't easy, and 99% of us retail traders won't make it there.
But any arena in life is like that. However it is worth a try isn't it? You have your dreams waiting for you right?
Let me start with Haters, their reasoning..
All the haters are correct that this book contains lot of cliches with no actual tutorial on how to build your own system. A lot of chapters are anecdotes, famous quotes, and even baseball analogies that seem awfully far stretched from trading. All of the complaints are correct, and I wouldn't argue with any of them.
Let me end with why this book is the ultimate book for learning about trend following...
I can imagine that most people who hate on this book, carry the same attitude in life toward anything they endeavor on. The haters simply wanted to be told a very specific method so they can start using and quit their mundane jobs and all become millionaires.
Any hater who superficially scan for the holy grail will be disappointed, of course they will, because they can't think long enough about why this book was written.
Imagine if Michael Jordan publishes a book about his success, and you purchase it and get disappointed why Jordan didn't include his holy grail for his basketball success. How would you feel if your friend complained that Jordan didn't tell people specifically how he succeeded?
The ultimate truth is, trading is pretty much like a sport, can't be taught but it can be learned, through numerous trial-and-error, self doubting and endless nights of questioning.
Richard Dennis once said, he could publish all his rules in news paper and no one would use it.
Alexander Elder and Tom Basso discovered that entry really didn't matter, as long as exits are well taken care of.
William Eckhardt said that emotional intelligence is probably the determining factor in trading success.
Anyone can starting using the rules published in Covel's complete turtle book, the 4 week high entry with 2x ATR price stop coupled with perhaps 20day moving average time stop. But to which extent are you able to use that system perfectly depending primarily on your ability to stick to the system without doubting.
Of course time-to-time you will modify the system due to new experience gained.
But the specific setup, there is no holy grail.
Covel's book is good in inspiring people who already have a deep understanding of trend following, however it does not serve to teach you how to trend follow. Much like no basketball player will teach you specifically how to cross and shake an opponent, because it's not possible to teach. Any book promising to teach you how to pick up chicks at a bar are usually charlatan who's making false promises.
No skills whatsoever in any arena in life can be taught. The best hackers are self taught, the best photoshop users are self taught, the best rappers are self taught. The idea that someone can transfer his/her knowledge to you through a speech/book is just nonsense. Experience cannot be replaced by simply reading a book, or listening to audiobook on Youtube.
My reasons why I love this book:
Because it shows that trend following works, and it makes sense to me. Trend following system hibernates during ranging period that whipsaw, forcing you to trade smaller and smaller using the 1%/2% equity risk rule, and makes you trade larger during trending period. The purchasing power is well protected/preserved during unfavorable market. If this doesn't make sense to you then I don't know what makes sense.
Trend following does not discriminate against any asset classes, or previous highs/lows. Any trending signal will be picked up and force the trader to ride until it dies down. Any news, fundamental figures, comments from analyst are ignored because trend followers expect that future cannot be predicted but trend won't stop until it "stops". This makes total sense to me and I'm happy to put my money on the line because it sounds logical.
Conclusion:
Don't pick up this book if you're hoping to be taught and transformed into a trend following trader and start making millions, you won't, just like any book that teach you how to pick up chicks and dating won't transform you into an alpha male with super jacked muscle.
Do read this book if you want an extensive background info on why trend following works, and how the successful traders look at the markets.
You have to ultimately put in the work to gain that experience to succeed as a trader, which isn't easy, and 99% of us retail traders won't make it there.
But any arena in life is like that. However it is worth a try isn't it? You have your dreams waiting for you right?
April 23, 2021
1. I read an ebook copy of this from Scribd and never noticed the cover until now. It's pretty terrible and ridiculous (that had nothing to do with my rating).
2. This book is interesting, but it's like a long advertisement for Trend Following without all that much 'meat'. Trend Following is great because it does this.... trend following is great because it was on the short side of this disaster.... Trend Following is like Money Ball, you want to be like Money Ball right? C'mon drink the Trend Following Kool-Aid, it tastes so much better than the Kool-Aid those Fundamental Investors and Value Investors have for sale. Drink it up!
One reviewer said, "Imagine if Michael Jordan publishes a book about his success, and you purchase it and get disappointed why Jordan didn't include his holy grail for his basketball success. How would you feel if your friend complained that Jordan didn't tell people specifically how he succeeded?"
And that is kind of a fair description of some criticisms for any trading book that people whine doesn't have the 'secret' that will make them Warren Buffet rich by next week. The only problem is this criticism doesn't really hold for this book, this isn't Michael Jordan writing a book on basketball success, it's the journalist at some Chicago Newspaper who covered Jordan back when he was on the Bulls and then started a website about being like Mike, and published books about playing Jordan-esque styles of basketball and how it's superior to say the Pippen and Magic Johnson school of Basketball. If Richard Dennis, or Ed Seykota, or some of the other legendary Trend Following traders had written a book I'd totally agree with that criticism.
But, on the plus side the book is very persuasive about merits to the Trend Following philosophy but it also reads a bit too much like propaganda and while it highlights traders who at one time may have had a contrarian approach (in relation to the methods they traded on, not on the directional bias of their trades which are anything but contrarian since that would be against the idea of following trends) there is a little too more conformity to an acceptable way of approaching the markets here.
One day I'll start writing more about some of these things. Tonight I really just wanted to write a review that said the cover is fucking ridiculous.
2. This book is interesting, but it's like a long advertisement for Trend Following without all that much 'meat'. Trend Following is great because it does this.... trend following is great because it was on the short side of this disaster.... Trend Following is like Money Ball, you want to be like Money Ball right? C'mon drink the Trend Following Kool-Aid, it tastes so much better than the Kool-Aid those Fundamental Investors and Value Investors have for sale. Drink it up!
One reviewer said, "Imagine if Michael Jordan publishes a book about his success, and you purchase it and get disappointed why Jordan didn't include his holy grail for his basketball success. How would you feel if your friend complained that Jordan didn't tell people specifically how he succeeded?"
And that is kind of a fair description of some criticisms for any trading book that people whine doesn't have the 'secret' that will make them Warren Buffet rich by next week. The only problem is this criticism doesn't really hold for this book, this isn't Michael Jordan writing a book on basketball success, it's the journalist at some Chicago Newspaper who covered Jordan back when he was on the Bulls and then started a website about being like Mike, and published books about playing Jordan-esque styles of basketball and how it's superior to say the Pippen and Magic Johnson school of Basketball. If Richard Dennis, or Ed Seykota, or some of the other legendary Trend Following traders had written a book I'd totally agree with that criticism.
But, on the plus side the book is very persuasive about merits to the Trend Following philosophy but it also reads a bit too much like propaganda and while it highlights traders who at one time may have had a contrarian approach (in relation to the methods they traded on, not on the directional bias of their trades which are anything but contrarian since that would be against the idea of following trends) there is a little too more conformity to an acceptable way of approaching the markets here.
One day I'll start writing more about some of these things. Tonight I really just wanted to write a review that said the cover is fucking ridiculous.
May 28, 2010
This book is rubbish. It's full of baseball analogies, and no math or hard research.
July 29, 2009
There were a few interesting tidbits contained in this book, but most of it I could have done without. For someone who complains that trend-following critics spend too much time cherry picking bad examples and not looking at the data, the author:
* spent half the space in the book on "illustrative" quotes which always seem to be on his side
* counters each cherry-picked (both by the original critic and then by him as a straw-man) criticism with multiple cherry-picked counter examples
* uses performance data from a different set of firms for each time period and argument
* drops far too many names in the first-person (I have spoken to Cool Hedge Fund Guy #37 and he told me that I am right)
* dedicates one whole chapter (plus large sections of other chapters) to personality profiles and anecdotes about a trading style that he claims is systematic and rule-based (as opposed to intuitive, emotional, or some other characteristic which would justify all the different personality/psychology stuff)
Plus, the grammar is horrible (spelling was fine) and at least one section referred the reader to various colours on a BLACK AND WHITE GRAPH.
* spent half the space in the book on "illustrative" quotes which always seem to be on his side
* counters each cherry-picked (both by the original critic and then by him as a straw-man) criticism with multiple cherry-picked counter examples
* uses performance data from a different set of firms for each time period and argument
* drops far too many names in the first-person (I have spoken to Cool Hedge Fund Guy #37 and he told me that I am right)
* dedicates one whole chapter (plus large sections of other chapters) to personality profiles and anecdotes about a trading style that he claims is systematic and rule-based (as opposed to intuitive, emotional, or some other characteristic which would justify all the different personality/psychology stuff)
Plus, the grammar is horrible (spelling was fine) and at least one section referred the reader to various colours on a BLACK AND WHITE GRAPH.
March 18, 2013
You won't find any working investment methods / strategies / systems in this book.
Instead, it is quite a lengthy treaty about the superiority of trend followers over all other investors (with small exception of Jim Simons from RenTec, for the author seems to have no idea what Simons is actually doing).
One thing you should definitely remember from this book is: the trend followers never lose any money. They may have some deep and possibly terminal drawdowns though...
Nevertheless, there are many potentially useful concepts here. It would be much easier if they were not mixed with pervasive trend following propaganda.
Instead, it is quite a lengthy treaty about the superiority of trend followers over all other investors (with small exception of Jim Simons from RenTec, for the author seems to have no idea what Simons is actually doing).
One thing you should definitely remember from this book is: the trend followers never lose any money. They may have some deep and possibly terminal drawdowns though...
Nevertheless, there are many potentially useful concepts here. It would be much easier if they were not mixed with pervasive trend following propaganda.
August 13, 2014
This is a book that does not provide any winning strategies or sales gimmicks (hence the rather low public rating). This is a book that provides the mindset and process to become a successful trader. I would definitely recommend this book to any trader or investor. It goes against the grain of "buy and hold" philosophies.
This book does a great job at tying in what it takes to be a great trader; not only inside the stock market but outside. It could be considered quite misleading as you will not find out "How Great Traders Make Millions" but you will come out more enlightened than before.
This book does a great job at tying in what it takes to be a great trader; not only inside the stock market but outside. It could be considered quite misleading as you will not find out "How Great Traders Make Millions" but you will come out more enlightened than before.
October 11, 2017
I like the ideas behind the trend following trading. After reading this book and the author's other book I'm left wondering which stocks should I select to start following the trends? I emailed the author asking this question and at first, he implied that I didn't read the book. Then he said I could sign up for his program which costs thousands of dollars.
I thought the point of this book and the turtle experiment was that anyone could be trained to do trend trading. Apparently, the author wants you to shell out thousands of dollars to do so which was disappointing to hear.
I thought the point of this book and the turtle experiment was that anyone could be trained to do trend trading. Apparently, the author wants you to shell out thousands of dollars to do so which was disappointing to hear.
August 4, 2016
Makes a good case for trend following, but no actionable trading lessons. Misleading Length. Misleading Title.
I am a millennial, an entrepreneur, a creative person. I am not a trader, but I'm interested in trading and have made some mistakes in the past trying to buy and sell stocks or mutual funds. This book seemed like it would explain a simple type of trading, one where you do not need to be a computer programmer or dedicate your life to day trading.
I previously have read "The Complete Turtle Trader" and really enjoyed it. It told the story of Richard Dennis in an informative and entertaining way - and then it laid out a set of rules that Richard Dennis used to train his Turtles how to trend follow. It actually had steps you could take to create your own system of trend following, and I was able to implement the rules to earn some real money in the cryptocurrency markets.
I then started listening to Michael Covel's podcast, Trend Following Radio. After 5-6 episodes, I decided to buy "Trend Following" on Audible after everyone kept referring to it as a great book.
When I saw the length of this audiobook, 24 hours, I was impressed. I started listening to the book on walks, enjoying the stories about the trend followers, hearing about how much money they made in up and down markets.
After about 11 hours in, I was excited for the next half of the book where I was certain the author was going to start walking the listener through the different strategies required to become a trend follower. Processes, models, risk & volatility best practices, and position sizing. These are the nuggets I was expecting from the book.
Instead, the book ended shortly after and I was extremely disappointed that the next half of the audiobook was 2 hours of side bar quotes that lose their meaning when read one after another for 2 hours straight. Then the next ~10 hours or so was free podcast episodes.
The narrator did a really good job, and the stories were great. The book was very well written. I'm not saying it was a bad book, I was just disappointed because I expected the same type of actionable information from Trend Following that I got from The Complete Turtle Trader.
I see Michael Covel has another book called "Trend Commandments: Trading For Exceptional Returns" - maybe what I was looking for is in this book, because it wasn't in Trend Following.
I am a millennial, an entrepreneur, a creative person. I am not a trader, but I'm interested in trading and have made some mistakes in the past trying to buy and sell stocks or mutual funds. This book seemed like it would explain a simple type of trading, one where you do not need to be a computer programmer or dedicate your life to day trading.
I previously have read "The Complete Turtle Trader" and really enjoyed it. It told the story of Richard Dennis in an informative and entertaining way - and then it laid out a set of rules that Richard Dennis used to train his Turtles how to trend follow. It actually had steps you could take to create your own system of trend following, and I was able to implement the rules to earn some real money in the cryptocurrency markets.
I then started listening to Michael Covel's podcast, Trend Following Radio. After 5-6 episodes, I decided to buy "Trend Following" on Audible after everyone kept referring to it as a great book.
When I saw the length of this audiobook, 24 hours, I was impressed. I started listening to the book on walks, enjoying the stories about the trend followers, hearing about how much money they made in up and down markets.
After about 11 hours in, I was excited for the next half of the book where I was certain the author was going to start walking the listener through the different strategies required to become a trend follower. Processes, models, risk & volatility best practices, and position sizing. These are the nuggets I was expecting from the book.
Instead, the book ended shortly after and I was extremely disappointed that the next half of the audiobook was 2 hours of side bar quotes that lose their meaning when read one after another for 2 hours straight. Then the next ~10 hours or so was free podcast episodes.
The narrator did a really good job, and the stories were great. The book was very well written. I'm not saying it was a bad book, I was just disappointed because I expected the same type of actionable information from Trend Following that I got from The Complete Turtle Trader.
I see Michael Covel has another book called "Trend Commandments: Trading For Exceptional Returns" - maybe what I was looking for is in this book, because it wasn't in Trend Following.
November 20, 2014
Cover certainly makes a great case for trend following. Like the Complete Turtle Trader, there are no specific trading systems in this book. But if you're paying attention, you pick up some great insights on how to approach the markets and where to begin in developing your own system.
Read
May 24, 2015Excellent. Learn how professionals do it. One key take-away... how to size your trades to fit your risk appetite with an instrument's volatility.
September 30, 2019
I've actually read an earlier edition before. It's mostly a rehash of the same concepts, like how to identify long and short-term trends, position sizing, buy points, etc. There is A LOT of material on WHY trend following works, with heaps of anecdotal information and chart references to back it up. This necessarily covers a lot of market psychology underlying why trend following works. If you are looking for an actionable plan to follow from A-Z, then this book is probably not for you. I am reminded of the oft-quoted adage "The Trend is Your Friend, Until it Ends". From experience, I can say that such endings can be quite catastrophic, especially if one were merely riding a trend without paying heed to the fundamentals. As expected, there is scant discussion about what to do when a profitable trend ends sharply, busting through all your stops and leaving you with a large and massively "underwater" position. At best, I would recommend investors apply trend following as only one tool in the arsenal and never over an entire portfolio. [Rating: 3.5*]
August 17, 2021
So this book has quite low avg review 3.7. Which is quite low for a niche trading book. You would assume most people who bought this would have interest in the topic or would find something useful in this book.
Sadly most of the complaints about this book are true. It talks about trend following or systematic momentum trading which is what CTA firms do. But it doesn't really explain more than the basic. I think most people went in this book thinking it will show them some discretionary trend following strategy which is not the case.
If you bought the complete version that came years after release, it has a bunch of reviews with professional traders/firms. Those are by far the best chapters of the book. The main book by Michael Covel is actually him just saying trend following works, who does it, why it's good but he never says how which is quite important.
Also another thing I look at with trading financial books is what is the author's background. From what I found he is just a journalist and nowhere does he even mention his own personal trading or if he has ever used any form of trend following or wrote program for trading. So he has no skin in the game, aka he doesn't do what he preaches. I searched everywhere about the author and couldn't find anything about him trading personally. He just writes books, host podcasts and runs a site. I didn't listen to the podcasts so maybe there he divulges his trading stories but he definitely isn't some known trader.
That being said, as I mentioned, the revised version of the book contains many many chapters written by CTA traders. Which is a gold mine for anyone who already has a novice knowledge of systematic trading and trend following. I do agree this book isn't for a complete beginner. This book is more for someone who has a black box, has done momentum/trend following. You might learn a few things here to optimize your system.
99% of the book is useless but the 1% valuable information can produce a higher % boost to your performance so I still gave it 4/5.
Sadly most of the complaints about this book are true. It talks about trend following or systematic momentum trading which is what CTA firms do. But it doesn't really explain more than the basic. I think most people went in this book thinking it will show them some discretionary trend following strategy which is not the case.
If you bought the complete version that came years after release, it has a bunch of reviews with professional traders/firms. Those are by far the best chapters of the book. The main book by Michael Covel is actually him just saying trend following works, who does it, why it's good but he never says how which is quite important.
Also another thing I look at with trading financial books is what is the author's background. From what I found he is just a journalist and nowhere does he even mention his own personal trading or if he has ever used any form of trend following or wrote program for trading. So he has no skin in the game, aka he doesn't do what he preaches. I searched everywhere about the author and couldn't find anything about him trading personally. He just writes books, host podcasts and runs a site. I didn't listen to the podcasts so maybe there he divulges his trading stories but he definitely isn't some known trader.
That being said, as I mentioned, the revised version of the book contains many many chapters written by CTA traders. Which is a gold mine for anyone who already has a novice knowledge of systematic trading and trend following. I do agree this book isn't for a complete beginner. This book is more for someone who has a black box, has done momentum/trend following. You might learn a few things here to optimize your system.
99% of the book is useless but the 1% valuable information can produce a higher % boost to your performance so I still gave it 4/5.
Read
September 24, 2014Michael W. Covel (M.B.A. '94)
January 2, 2019
Review for Audible format:
In the almost 35 hours a listener may spend finishing this book, they will probably never get a clear understanding of trend following, not even a simple definition. The best one can piece together is that it's the strategy of following a time series trend of a particular security or commodity as it trends up, and contract to short the moment it trends down.
How to define the time-delta isn't specified. A lot of the book talks about trend following as if the reader is a lifelong practitioner. Usually one should be cautious with trading books, not only are they a dime a dozen, but most seem to garbage. However, the author was able to demonstrate some bona fides by interviewing several noted individuals on his show including Daniel Kahneman, Harry Markowitz, and Robert Aumann in academic economics and a few well-noted traders like Ed Seykota, so I'd figure the book must be worth something.
The core book itself makes up only 12/34 hours. Another 12 hours or so are appendix where the author cites entire interviews (and a few practitioner papers on trading systems) he conducted himself, and the rest (10 hours or so) are a mix of the actual interviews, taken directly from his podcast, cited in his.appendices. In a few instances, the interviews in this section are actually read word-for-word in his appendix section, which itself is mentioned/quoted heavily in the book proper, so you could get triple redundancy. So basically a lot of fluff, towards the last 4 or 6 hours of the entire production is mostly interviews about trading and life, which are as they sound... To be fair, some of it was interesting, like how not to be obsessive with looking at movement on your terminal/dashboard (which probably causes over-trading), and could be applied other occupations with respect to creating a good work-life balance.
There are 2 or 3 segments where the book discusses trading on securities/commodities that could be modelled generatively with a skew or large kurtosis distribution that were interesting. A lot of that material reduces to understanding potential asymmetries on the up or down-side of a trade, using half-variance instead of variance as proxy for risk (also why variance is not risk, but that's a different related segment) etc. Most of the segments, however, are nowhere near as useful. Mostly it's just the interviewer and interviewee talking about how great trend following is as a strategy. It really reads like an infomercial. I probably would not ever listen to this again.
In the almost 35 hours a listener may spend finishing this book, they will probably never get a clear understanding of trend following, not even a simple definition. The best one can piece together is that it's the strategy of following a time series trend of a particular security or commodity as it trends up, and contract to short the moment it trends down.
How to define the time-delta isn't specified. A lot of the book talks about trend following as if the reader is a lifelong practitioner. Usually one should be cautious with trading books, not only are they a dime a dozen, but most seem to garbage. However, the author was able to demonstrate some bona fides by interviewing several noted individuals on his show including Daniel Kahneman, Harry Markowitz, and Robert Aumann in academic economics and a few well-noted traders like Ed Seykota, so I'd figure the book must be worth something.
The core book itself makes up only 12/34 hours. Another 12 hours or so are appendix where the author cites entire interviews (and a few practitioner papers on trading systems) he conducted himself, and the rest (10 hours or so) are a mix of the actual interviews, taken directly from his podcast, cited in his.appendices. In a few instances, the interviews in this section are actually read word-for-word in his appendix section, which itself is mentioned/quoted heavily in the book proper, so you could get triple redundancy. So basically a lot of fluff, towards the last 4 or 6 hours of the entire production is mostly interviews about trading and life, which are as they sound... To be fair, some of it was interesting, like how not to be obsessive with looking at movement on your terminal/dashboard (which probably causes over-trading), and could be applied other occupations with respect to creating a good work-life balance.
There are 2 or 3 segments where the book discusses trading on securities/commodities that could be modelled generatively with a skew or large kurtosis distribution that were interesting. A lot of that material reduces to understanding potential asymmetries on the up or down-side of a trade, using half-variance instead of variance as proxy for risk (also why variance is not risk, but that's a different related segment) etc. Most of the segments, however, are nowhere near as useful. Mostly it's just the interviewer and interviewee talking about how great trend following is as a strategy. It really reads like an infomercial. I probably would not ever listen to this again.
February 10, 2020
This is quite a beefy book about trend following. It reads pretty much like a textbook with quotes to reinforce the concept in nearly every page. This might arguably be the ultimate bible for all trend followers. The author presented many case studies and articles about successful self-proclaimed trend followers. As well as the science behind the idea. Hence, this book is pretty much one-sided. All the positive things about trend following you can find it here.
I see the reviews are very much polarised, one either love it or hate it. To the haters, they reason a lack of trading techniques aka secrets. I think they are the ever-searching bunch of people to find that ultimate recipe to a successful trader. The truth is, there is no such thing as a Holy Grail in trading. They don’t seem to realise that their biggest enemy is within them. Trading is 80% psychology, 20% techniques. This book mainly focus on the psychology aspect of trading looking at price actions. It is not a technical trading methods book that most of these negative bunch are looking for.
To me, I find it very useful for a trader to refer back to some of the concepts in this book from time to time. It is no secret that many of the profitable technical traders follows price action and synchronise or align their mindset to the trend. There is no good or bad trades. There is only the right trade.
I see the reviews are very much polarised, one either love it or hate it. To the haters, they reason a lack of trading techniques aka secrets. I think they are the ever-searching bunch of people to find that ultimate recipe to a successful trader. The truth is, there is no such thing as a Holy Grail in trading. They don’t seem to realise that their biggest enemy is within them. Trading is 80% psychology, 20% techniques. This book mainly focus on the psychology aspect of trading looking at price actions. It is not a technical trading methods book that most of these negative bunch are looking for.
To me, I find it very useful for a trader to refer back to some of the concepts in this book from time to time. It is no secret that many of the profitable technical traders follows price action and synchronise or align their mindset to the trend. There is no good or bad trades. There is only the right trade.
June 9, 2025
Solid Introduction, but Repetitive and Light on Practical Application
Trend Following by Michael Covel is a decent introduction to the philosophy of trend following in trading. The book does a good job of explaining why following market trends can work over the long term, and it provides plenty of historical examples to make the case. Covel’s enthusiasm for the subject is clear, and he does a good job of challenging conventional wisdom around buy-and-hold strategies.
However, the book has some notable downsides. It’s very repetitive—many of the same points are restated again and again, often without adding much new insight. There’s also a lot of emphasis on anecdotes and profiles of successful traders, but not enough in terms of concrete, actionable strategies. If you’re looking for specific rules, indicators, or systems to apply, you’ll likely come away disappointed.
Overall, it’s worth a read if you’re new to trend following and want to understand the mindset behind it, but don’t expect a detailed how-to manual. It’s more motivational than instructional.
Trend Following by Michael Covel is a decent introduction to the philosophy of trend following in trading. The book does a good job of explaining why following market trends can work over the long term, and it provides plenty of historical examples to make the case. Covel’s enthusiasm for the subject is clear, and he does a good job of challenging conventional wisdom around buy-and-hold strategies.
However, the book has some notable downsides. It’s very repetitive—many of the same points are restated again and again, often without adding much new insight. There’s also a lot of emphasis on anecdotes and profiles of successful traders, but not enough in terms of concrete, actionable strategies. If you’re looking for specific rules, indicators, or systems to apply, you’ll likely come away disappointed.
Overall, it’s worth a read if you’re new to trend following and want to understand the mindset behind it, but don’t expect a detailed how-to manual. It’s more motivational than instructional.
January 19, 2019
I was very disappointed by this book.
This book should be called “The Zen of Trend Following: How to Develop The Mindset of a Trading Legend” (or some such). The “How To...” in the title is misleading. There is little to no “how to” in this book. Properly titled, and properly setting my expectations as to its contents, this book could have been a four-star book for me.
It’s filled with rhetoric about the glories of trend following (which I don’t disagree with). It has some interviews with successful traders (which is cool), but I didn’t appreciate a 400 page introduction to actual trend following strategies.
I was ecstatic to see an equation on page 408! Actually, I enjoyed pages 405 to the end, which is why the book gets two stars instead of one.
I will likely come back to some of these interviews in the book, which again, could offer valuable insights into the mindset of a trader. But, if you’re looking for a “how to” book, look elsewhere.
This book should be called “The Zen of Trend Following: How to Develop The Mindset of a Trading Legend” (or some such). The “How To...” in the title is misleading. There is little to no “how to” in this book. Properly titled, and properly setting my expectations as to its contents, this book could have been a four-star book for me.
It’s filled with rhetoric about the glories of trend following (which I don’t disagree with). It has some interviews with successful traders (which is cool), but I didn’t appreciate a 400 page introduction to actual trend following strategies.
I was ecstatic to see an equation on page 408! Actually, I enjoyed pages 405 to the end, which is why the book gets two stars instead of one.
I will likely come back to some of these interviews in the book, which again, could offer valuable insights into the mindset of a trader. But, if you’re looking for a “how to” book, look elsewhere.
November 6, 2024
I read this having read Michael's book on the Turtles.
Many reviews are complaining that there are no actual strategies here, which is true. The fact is, many strategies are readily accessible online, and are far from complicated. This book instead is all about how and why the general concept of TF works, how it's done historically, and why it should continue. There are academic papers, various interviews, and arguments raised and countered.
This book gives the reader confidence in the philosophy; having read it you should be able to find a replicate a simple system and do well. This is not a set of instructions, it is a guiding light.
Michael writes well, and has spent his life chasing this cause and it shows. There is some evangelical wording, but this fervour should be taken as strength in the belief.
Fantastic.
Many reviews are complaining that there are no actual strategies here, which is true. The fact is, many strategies are readily accessible online, and are far from complicated. This book instead is all about how and why the general concept of TF works, how it's done historically, and why it should continue. There are academic papers, various interviews, and arguments raised and countered.
This book gives the reader confidence in the philosophy; having read it you should be able to find a replicate a simple system and do well. This is not a set of instructions, it is a guiding light.
Michael writes well, and has spent his life chasing this cause and it shows. There is some evangelical wording, but this fervour should be taken as strength in the belief.
Fantastic.
December 4, 2022
The book is basically a (very good) advertisement to trend following. There is a lot of motivational narrative, excellent quotes and little practical value. My main gripe with this book is that according to author trend following is the only real game in town. Any other strategy would eventually fail. Trend following is certainly a useful and legitimate strategy but it's not a holy grail. Besides, I take exception to the conclusion that author draws: other strategies, like buying on the dips, could lead to catastrophical drawdown if the trend continues long enough, whereas trend following will just cause temporary - however large - drawdown. I believe if the market stays in sideways environment long enough, trend following drawdowns could also lead to complete failure.
June 17, 2021
A very clear and solid introduction to a lens to look at investments that I find very profitable and useful when considering how it can provide returns to your portfolio even during downturns when other "long-only" or "short-vol" strategies perform poorly. A little too enthusiastic, but it's understandable given how much hate this family of strategies receives from academic "efficient market" charlatans. Would recommend for people to gain an interest in momentum trading, but preferably read after Market Wizards, which serves as a more compelling introduction to managed futures and CTA strategies.
May 12, 2017
Mr. Covel wrote some of this text; a large amount of the content is republished papers of other authors. Probably I do not fit the target demographic in that I'm not a trend following nor trading geek. I thought I'd learn about the topic from this book, but found it to be a more wandering path to delivering information than I was prepared for. Consequently, it felt tedious. I was simply curious about the topic and didn't have any prior knowledge -- for me, this was not an efficient starting point. Presumably aficionados of trend following will find the book delightful.
June 30, 2017
A great deal of information for the hardcore trader
This book is packed with interviews and wisdom from some of the top traders of the last 30 years. Their wisdom and commitment to trend following system is documented and well narrated by Covel. Additionally, tons of research and statistical modeling of results are also included to show trend following as a very viable and robust trading system.
Unfortunately there are very few of the systems described in this book. Had examples and narrative step by step view of their process been included, it would have gotten 5 stars.
This book is packed with interviews and wisdom from some of the top traders of the last 30 years. Their wisdom and commitment to trend following system is documented and well narrated by Covel. Additionally, tons of research and statistical modeling of results are also included to show trend following as a very viable and robust trading system.
Unfortunately there are very few of the systems described in this book. Had examples and narrative step by step view of their process been included, it would have gotten 5 stars.
June 9, 2018
Too qualitative & really poorly organized
It's ironic that a book that seeks to promote system based quantitative trading chooses to do so with inane anecdotes and analogies. Almost reads like a sell-side report that the author claims to dislike - complete with inappropriately placed Warren Buffett quotes and pointless repetition of truisms.
It's ironic that a book that seeks to promote system based quantitative trading chooses to do so with inane anecdotes and analogies. Almost reads like a sell-side report that the author claims to dislike - complete with inappropriately placed Warren Buffett quotes and pointless repetition of truisms.
September 7, 2018
It was nice that he provided the mindset one needs to be a trend follower, but he could have done it it 10 pages instead of 400+. My opinion it was a waste of time reading. Lots of talk and no important details. By reading this book you will not have enough information to even think about trend following. His title is very misleading.
October 16, 2018
Sound book for trend followers
It is a profound and sound book for people who want to learn what really is trend following. And I am not talking only about systems, but much more important: philosophy, risk management, money management, psicology... In other words the journey. Besides that gives statistical hard data trend following performance that proves its effectiveness.
It is a profound and sound book for people who want to learn what really is trend following. And I am not talking only about systems, but much more important: philosophy, risk management, money management, psicology... In other words the journey. Besides that gives statistical hard data trend following performance that proves its effectiveness.
February 20, 2019
That's a very long way to say "there's evidence that trend following is the best trading strategy, and make sure you use good money management". Not very practical, a lot of opinion, quotes and interviews. If you're looking to learn how trend following operates or how to build a trading system, this book is not what you're after.
May 16, 2022
My first eye opener. Clear and broad perspectives about the trend following techniques. There is a lot about phycology which is very essential for a successful trading journey.
If you only search for a specific strategy / Holy grail, this is not for you.
I recommend this book as a must read for beginners.
If you only search for a specific strategy / Holy grail, this is not for you.
I recommend this book as a must read for beginners.
August 27, 2025
decent explanation of trend following
This is a good explanation of trend following, however author samples only the successful investors and sample size is small. All others who did not succeed were not true “ trend followers “ is his argument. It also does not delve deeply into how to design a model.
This is a good explanation of trend following, however author samples only the successful investors and sample size is small. All others who did not succeed were not true “ trend followers “ is his argument. It also does not delve deeply into how to design a model.
November 10, 2017
I should have read this book long ago.
I began trading commodities eight years ago. It took me around five years to device a strategy to trade with trend following. I am a staunch follower of trend following. This book helped me in polishing up my existing trading plan.
I began trading commodities eight years ago. It took me around five years to device a strategy to trade with trend following. I am a staunch follower of trend following. This book helped me in polishing up my existing trading plan.
September 21, 2019
No there there
The title of the book says “how to make a fortune . . .”. I am still waiting for the how. I expected, perhaps naively, there to be examples of trading algoritms and comparisons of them. Not there.
The title of the book says “how to make a fortune . . .”. I am still waiting for the how. I expected, perhaps naively, there to be examples of trading algoritms and comparisons of them. Not there.
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