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Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets, 5th Edition

ISBN: 978-1-119-37187-8
672 pages
April 2017
Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets, 5th Edition (1119371872) cover image

Description

The legendary trading strategy in depth from A to Z

Michael Covel’s 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.

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Table of Contents

Foreword

Preface

Section I: Trend Following Principles

Chapter 1: Trend Following

Speculation

Winning v. Losing

Investor v. Trader

Fundamental v. Technical

Discretionary v. Systematic

Hiding in Plain Sight

Change Is Life

Follow the Trend to the End When It Bends

Surf the Waves

Chapter 2: Trend Followers

David Harding

Bill Dunn

John W. Henry

Ed Seykota

Keith Campbell

Jerry Parker

Salem Abraham

Richard Dennis

Richard Donchian

Jesse Livermore

Dickson Watts

Chapter 3: Performance Data

Absolute Returns

Volatility v. Risk

Drawdowns

Correlation

Zero-Sum

George Soros

Berkshire Hathaway

Chapter 4: Big Events, Crashes and Panics

Great Recession

Dot-com Bubble

Long-Term Capital Management

Asian Contagion

Barings Bank

Metallgesellschaft

Black Monday

Chapter 5: Thinking Outside the Box

Baseball

Billy Beane

Bill James

Stats Take Over

Chapter 6: Human Behavior

Prospect Theory

Emotional Intelligence

Neuro-Linguistic Programming

Trading Tribe

Curiosity Not PhDs

Commitment

Chapter 7: Decision-Making

Occam’s Razor

Fast and Frugal Decision-Making

Innovator’s Dilemma

Process v. Outcome v. Gut

Chapter 8: The Scientific Method

Richard Feynman

Critical Thinking

Linear v. Nonlinear

Compounding

Chapter 9: Holy Grails

Buy and Hope

Warren Buffett

Losers Average Losers

Avoiding Stupidity

Chapter 10: Trading Systems

Risk, Reward & Uncertainty

Five Questions

Your Trading System

Frequently Asked Questions

Chapter 11: The Game

Acceptance

Don’t Blame Me

Decrease Leverage Decrease Return

Fortune Favors the Bold

Section II: Trend Following Interviews

Chapter 12: Ed Seykota

Chapter 13: Martin Lueck

Chapter 14: Jean-Philippe Bouchaud

Chapter 15: Ewan Kirk

Chapter 16: Alex Greyserman

Chapter 17: Campbell Harvey

Chapter 18: Lasse Pedersen

Section III: Trend Following Research

Chapter 19: A Multicentennial View of Trend Following

Chapter 20: Two Centuries of Trend Following

Chapter 21: Trend Following: Quality, Not Quantity

Chapter 22: Evaluating Trading Strategies

Chapter 23: Black Box Trend Following – Lifting the Veil

Chapter 24: Risk Management

Chapter 25: How to Grab a Bargain Trading Futures … Maybe

Chapter 26: Why Tactical Macro Investing Still Makes Sense

Chapter 27: Carry and Trend in Lots of Places

Chapter 28: The Great Hypocrisy

Chapter 29: Who Are You?

Epilogue

Trend Following Podcast Episodes

Notes

Bibliography

Acknowledgments

About the Author

Index

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