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Trend Following - Books that are a must read

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If any of you are interested in reading any books that will totally change your way of thinking and certainly enhance the way you make profits on markets trending both up and down then you must read Market Wizards and New Market Wizards. It highlights how real people made millions on the markets and how.

 

You must also read Reminscences of a Stock Operator. The famous Jesse Livermore who most probably was the original trend follower back in the day.

 

A lot of people will not know this but John Henry the owner of Liverpool is also a very successful trend follower. He has made millions trend following. 

 

One of my favourite books that really hammered home trend following was The Complete Turtle Trader. If you have not read this then it is an absolute must. If you are familiar with the film Trading Places with Eddie Murphy and Dan Aykroyd then you will appreciate and enjoy this book. Easy to read and the message that is given is loud and clear!

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Surprised there are not 100 replies to this thread. I have read all the above and my favorites are :

 

1. Trend Following by Michael Covel  - Get this on Audible as this include around 20 live interviews with Trend Following CTAs at the end and i found these interviews even more valuable than the book itself.

 

2. The Complete Turtle Trader by Michael Covel 

 

3. Trading In The Zone by Mark Douglas - Follow this up with the 2 hour you tube interview with Mark Douglas and this is a real gem. 

 

4. Market Wizards and New Market Wizards  - Both Gems 

 

5. Chat With Traders Series -  YouTube - Not a book but podcast interviews with real traders. 

 

6.  Trend Following Interviews (Michael Covel) -  You Tube - Not a book but podcast interviews with real traders. 

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There are real life examples of extremely successful trend followers who made millions if not billions on Wall Street covered in the books mentioned.

 

Trend following allows you to make profits regardless of the market direction. You can make profits when markets are trending up and when they are trending down.

 

It is all about the price action and volume and using this in a set of rules within a trading or investing strategy. 

 

A cheesy line but failing to plan is a plan to fail!

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The problem with trend following is 

 

Trends are only visible in hindsight, the authors like Covel would be billionaires, if only they could trade trends  and make money with it.They don't trade trends, they can't trade and make money, they write books, sell courses and seminars  and advise others .Just send them your money for books,courses and seminars.

 

Everybody in the trading gold rush knows the secret holy grail of trading success, yet 95 % lose  even on trend trading .Just search on google 95% lose.Why is this trend trading holy grail not working?

 

Everybody is basically teaching others about trend trading.

 

 

Compounding billionaires on t2w

 

educators.gif

 

 

 

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I don't recommend people buy any books.

 

Nobody wants to waste their life buying from failed traders, if they don't know the map of of the trading gold,  how can they be selling a map of it?

 

How can trading failures teach others to trade successfully? They have all tried and failed at making money from trading.The  are offering a  method/education which will be executed by the human brain , a brain that is not compatible with such a task , if they do not know enough ,  they are definitely blind.These people are the blind leading the blind.Read this report.

 

http://www.ripoffreport.com/reports/michael-covel/internet/michael-covel-turtle-trading-trend-following-great-marketer-but-never-trade-no-trading-1386039

 

 

Just search hard on google for trading sites for free information on trend trading.Here is how to get a free trend trading course by just googling.It is better than buying any book, because it will give trader a practical course.

 

775% profit option trade set and forget

 

http://www.trade2win.com/boards/futures-options/224072-775-profit-option-trade-set-forget.html

 

http://profitabletrading1.blogspot.co.uk/2017/11/trade2win-free-trend-trading-course.html

 

 

 

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I think some of you are missing the point. Michael Covel is a marketeer and a good one at that too some would argue. He has never claimed to be a trend follower himself. He simply presents the people who have actually made millions of dollars in profit in his books. He introduced real people most of whom were or still are billionaires to the reader. They made money using trend following and this is described to us in his books.

 

Jack Schwager's Market Wizards and New Market Wizards is another very good example of how the reader gets to learn about successful trend followers and learn about any mistakes they made but ultimately how they made their millions in profits using such a strategy.

 

I am an advocate of trend following but accept that it has its issues and limitations as well in certain conditions. I think the investor / trader has to create an individual style suited to them. It may mix fundamental analysis with momentum investing with a dose of trend following based on technical analysis.

 

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What is the point of telling everybody, that your granny went 5 miles to fetch a bucket of water, 100 years ago, then she used to   walk for 3 days to find the woods  to boil the eggs, then she gave you a boiled egg? 

 

 

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Richard Dennis eventually  failed and lost money for others, he could not follow his own rules.He lost millions of dollars.

 

Internet marketeers write and make money from writing, they know nowt  about today's markets.They have no knowledge of practical trading  in today's markets.

 

 

This is a very important lesson to learn from Jesse Livermore , these same patterns were present among gamblers , from 4500 years ago in the mahabharata. Livermore went bankrupt several times, he had the same flaws  as the other traders have, trading in the current  markets.

 

https://www.elitetrader.com/et/threads/livermore-emotions-and-mind-of-a-gambler-trader.304968/

 

http://www.trade2win.com/boards/psychology-risk-money-management/224686-understanding-psychology-revenge-trading.html

 

This is inattention blindness, when looking at subjects.We only see what we want to see.

 

 

 

 

 

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Oilfxpro, which in your opinion is your preferred method of trading / investing?

 

Trend following cannot work all of the time in all market conditions as the trend following Hedge Funds found out a few years ago.

 

However in terms of balance of probability it gives you a better chance of making profits then buy and hope, sorry I mean buy and hold strategies. 

 

If you make ten trades and on two of them you profit and on eight of them you lose then as long as the profits on the two successful trades is higher than the losses on your eight losing trades then this can be deemed a success. This is even though it could be seen as a 20% success rate and 80% failure rate. It is the amount of profit you make overall which is important rather than the number of winning and losing trades. 

 

I would be very interested as I am sure others reading your posts will be in terms of how you would trade say Bitcoin or a commodity and in your opinion which style / strategy would give you the best chance or probability of success?

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I would not touch bitcoin, if I was to trade it I would use this strategy using call options,  on this link here

 

http://www.trade2win.com/boards/futures-options/224072-775-profit-option-trade-set-forget.html

 

It would have given almost few thousand  %  on several stocks.

 

It is difficult to do nothing for months, when  emotionally and psychologically 8 trades have been losses.It is easy talking about going through 8 out of 10 loses, but in reality it is not possible to emotionally handle it.

 

The method I use  would be trend support and resistance method  , but Bitcoin is too volatile for my psyche. I would look for 60 to 75% hit rate system, consistent profits almost every month.I just buy supports  on indices , I take consistent profits every week.

 

Sometimes you can see my trades when I place them .

 

 

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I started trading Bitcoin on IG initially. I was taking profits on a weekly basis. Then I got a bit greedy and starting taking profits on a daily basis. Now I am no day trader and nor do I have the time to be due to my work commitments. However, due the volatility of Bitcoin my stops started getting triggered and I started to make more losses. 

 

This combined with the lack of availability to trade Bitcoin when I wanted to led me to uncover XBT Tracker One Bitcoin in EUR and SEK. I invested in both and made over 100% return in less than a month. I am still invested in these and it takes the emotion and daily / weekly decision making out of the equation though I still monitor price on daily basis. 

 

Day trading trend followers welcome volatility as it means they can make money both on the long and short side. That is not something I have the time for but if you were a professional day trader then they would welcome volatility. There are also opportunities to spot patterns and trends on range bound markets too.

 

Bitcoin is the biggest trend and opportunity to create wealth quickly in my lifetime. It is also the riskiest in my lifetime too. There are many who are making thousands of pounds and hundreds of thousands of pounds on trading Bitcoin with plenty of leverage. Yes totally dangerous risk but it all depends on one's risk / reward strategy. I tend to purchase using oscillators on strong trends I have identified.

 

I have found it extremely tricky to set stop losses on Bitcoin. In hindsight when I started putting my own capital into Bitcoin at around $2,300 levels then if I had just left it in there with leverage on IG then I would have made a lot of profit. Hindsight is a wonderful thing. I have invested in businesses involved in Blockchain. I think even if Bitcoin were to crash then the companies involved in the technology underpinning it are not going anywhere. Even the people slating Bitcoin accept the impact Blockchain could have being similar to the Internet.

 

Lets see but Oilfxpro, thanks for replying. 

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Dear oilfxpro, can I have the book token you won in the competition seeing as you say "I don't recommend people buy any books".

 

Thanks in advance.

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Hi Casey 

 

I have not claimed the prize, because I don't need it.I don't read books written by writers who write for a living .These people are essentially the blind leading the blind.I have not asked I G to give  the voucher, as I don't need to read the blind authors who know nowt.These authors have failed at trading, and are the blind.I don't want to be misled by the blind.

 

 

I read books from people who trade for a living, my common sense tells me, there  are no real traders who write books.If  these authors were any good at trading,  they would be billionaires.They would not write books .

 

How to become a billionaire from trading/ compounding billionaires on t2w

 

A trader can earn a 50 ticks consistently a week from trading , a trader can become a billionaire in 12 years.Compound profits on a weekly basis ,  a low risk method with low draw downs of less than 200 pips , and maximum 30 ticks risked per trade.On three lots risk is 90 pips or $900 per trade on a $100,000 account.

3 positions * 50 ticks a week  * 1 lot , compound it on a weekly basis.

 

http://profitabletrading1.blogspot.co.uk/2017/12/how-to-become-billionaire-from-trading.html

 

Why would you write a book on trading?If  you are good at trading.

 

I would have asked I G to give you the voucher.This would create a breakdown in their monthly contributor scheme.I am actually going to give it to a charity, because it will help the people in need.In your case I think you are on course to billions from trading , so you won't need it.

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Oilfxpro, the website you are providing the link for, how credible is it?

 

I agree with you that those who make billions in the stock market are not authors. However where books like Market Wizards and New Market Wizards are slightly different is that Jack Schwager the author brings the interviews of these traders into the book for the readers. It is the magnet that brings the readers who want to improve their trading with those that have been successful.

 

I suggest you read Market Wizards and New Market Wizards before you judge. I am by no means saying that they are the best books on trading or investing. It just helps the reader understand the thought process and mechanisms behind how the successful traders made billions. Michael Covel is merely a marketing man who brings trend following to the attention of those who have not heard of the concept and believe me there are many that never have because all they know is Warren Buffett and Value Investing.

 

However if it does not interest you and you are not convinced then that is fine. However, what you seem to be doing is influencing other readers of these posts not to waste their time reading any books being suggested. Why is the link you keep posting any more credible than the books? Why should someone read your link and believe it than what is in trend following books?

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Credibility is  subjective, and what is credible is in the eye of the reader.

 

Michael Covel has been considered credible, because he has written books, sold seminars, hangs around all top speakers in the trading industry and has been promoted on all the large trading forums.He is credible on these sites, only because he paid $35,000 a year to ELITE TRADER forum as a sponsor. Most readers reading these sites would find him credible.

 

Try and apply his strategies in real time, because he is credible, then lose money on forex by applying his trend trading philosophy.

To me he is not credible, to most new traders he may sound credible, until they lose money.

 

I have observed forex markets, the only decent book I read was written by a real currency trader, about 40 years ago.The current system and trading industry does not give him credibility  or use his wisdom.

 

 

 

 

 

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3. Trading In The Zone by Mark Douglas - Follow this up with the 2 hour you tube interview with Mark Douglas and this is a real gem. 

 

Mark Douglas is the only author who I rate very highly, what he said in his webinars on youtube and philosophy is the correct way of trading mindset for all small traders.

 

If you follow Mark Douglas's coaching and philosophy, apply it to your own trading,  it will improve it significantly.

 

Today I apply them in my trading , it has changed my trading.

 

If you apply Mark Douglas thinking to all the supposed trading Gurus and internet sites, you will close your mind to all of them.

 

Unfortunately, if traders visit the sites like Forex factory and other forums, psychology sections are non existent  or pushed to the back of the reading list.

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I do not trade FX. I trade mainly commodities and cryptocurrencies. I sometimes trade shares.

 

You may be right that trend following may not work with FX. I don't know as I have not tried. It certainly works with commodities and shares. I have tried it on both and yes you make losses and get things wrong but generally if you stick to your rules and have strict risk management in play then it works. It takes a lot of fine tuning to get a system and style within trend following in place which suits your personality, behaviour, emotion and mental state. 

 

I came second in the recent November competition and have received the following books:

 

Blockchain - Blueprint for a new economy - Melanie Swan

 

Blockchain Revolution - How the technology behind Bitcoin is changing money, business and the world - Don and Alex Tapscott

 

The Book of Satoshi - The collected writings of Bitcoin creator, Satoshi Nakamoto - Phil Champagne

 

Digital Gold - The untold Bitcoin story - Nathaniel Popper

 

These books will help me when investing in companies involved in the Blockchain space. So far with my knowledge I have invested in:

 

Coinsillium

Kryptonite 1 PLC

Vela Technologies

Blue Star Capital PLC

 

Hopefully with my increased knowledge after reading these books I will be able to find more blockchain investment opportunities and evaluate their prospects better. I should be able to conduct better due diligence as well.

 

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The best books are psychology books but the only person I respect is Mark Douglas.

 

Let me explain   why psychology is more important than technical anylysis

 

When you cut off a chicken's head, a chicken runs around not knowing what to do next.

 

If you gave T/A  to that chicken , would it be able to execute technical analysis?

 

The chicken is you!

 

so technical books are worthless if your mind can not apply technical skills.

 

 

 

 

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Can I ask how much money Mark Douglas made and what his net worth was before he died I think a couple of years ago from memory. 

 

What did Mark Douglas trade and how did he make his name / reputation?

 

What markets did he specialise in and make millions in?

 

How successful a trader was Mark Douglas?

 

John W Henry was one of the greatest trend followers. He now owns Liverpool FC.

 

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Absolutely no idea but the presentation shows he understands risk management at the business level rather than at a retail trader level.

The need to understand probability, that the outcome of any one trade can only ever be 50/50 win or lose, a random distribution between wins and losses. The key is to have a long term edge (like a casino).

Understanding what moves markets rather than relying on closed circuit TA, that people move markets, where on the chart other traders might come in to support your position (or oppose it) and the need for an edge that has proved it self over a number of trades.

 

He talks about moving in mind set from a retail trader to trading as a business.

Well worth the hour spent.

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John W Henry was one of the greatest trend followers. He now owns Liverpool FC

John W. Henry & Co., a trading firm controlled by the principal owner of baseball's Boston Red Sox, told clients it will stop managing their money at year-end  2012 amid dwindling assets and slumping returns.

 

This is why covel does not trade, he writes books and teaches education through his books.

 

 

 

Little information is dangerous..Trend following with  covel following.It is like the blind leading the blind!  Encourage new readers to follow Covel so they lose their money faster.

 

https://www.wsj.com/articles/SB10001424127887323894704578109034136385080

 

Those  who can do, those who can't   teach through the medium of books.

 

Those who can, do; those who can't, teach.

 People who are able to do something well can do that thing for a living, while people who are not able to do anything that well make a living by teaching. 
 

 

If trend following was easy and profitable in the long run, Covel would be trading it,  he can write a simple set of rules, programme it, create a microsoft of trading software.He has the contacts and reputation to create a microsoft "trend following software".He can't.

 

Only a real trader would know why he can't.  A lot of traders are likely to lose money  by following Michael Covel.

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Caseynotes, I totally agree with you in relation to having an 'edge'. This is absolutely crucial to be successful in the long term. Without an 'edge' it is near impossible to be successful and consistently make more profits than losses.

 

Oilfxpro, Michael Covel is a marketing man. That is what he is. John W Henry was an example but the point you are missing from your article is that he himself is still a billionaire. Your article states that due to dwindling assets he stopped taking clients money and trading. That is actually quite sensible. He was unable make money using trend following during a period of time and was making losses for his clients. The key is his clients. He still is a billionaire. I certainly don't advocate Covel himself.

 

I use trend following on commodities and shares. I must admit I have not tried it on FX and maybe it does not work and I accept that it cannot work in all markets all of the time. Nor can any other strategy which is why I have a collusions of styles with a little bit of fundamentals (base story which has a strong foundation), technicals (which show me a clear trend in play), relevant knowledge or information to understand why the price is moving, etc.

 

So for example when the hurricane was going to hit Florida even before it hit Lumber and Orange Juice were increasing. This was due to a forecast assessment on the likely damage that would be caused. The story was set. Florida was one of the largest Orange producers. There was a fundamental reason to enter the trade. The charts told me that in anticipation money was entering these two trades and an uptrend had started. Now there was a technical reason to enter the trade. 

 

To finish off, Covel is someone who brings other people's work in Trend Following to the masses. He himself is not a trader and has not made money on the markets.

 

I assume that both Caseynotes and Oilfxpro are fx traders judging by your posts? I don't trade fx only commodities, cryptocurrencies and shares. 

 

Algorithmic 'Black Box' trading using trend following. I accept it costs a lot of time and money with a lot of back testing but people who use such methods tend to have a form of trend following incorporated into it. 

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Oilfxpro, 

 

Thanks for that.

 

I use Oscillators in trending markets. Momentum is a key ingredient for me. Stochastic Oscillators help traders define an entry and exit point based on the direction of the trend.

 

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I am a trader who trades trends, so I have a great knowledge of trading trends.

 

Here is a link to some really good information on trend trading,  it is all free  but traders need to spend time reading.

 

http://www.trade2win.com/boards/trading-systems/223498-high-probability-trend-trading.html

 

high probability trend trading

 

No book will give you this information, information you can get for free.This is practical trend trading knowledge, rather than some writers sing about theories on trend trading.  Combine it with what Mark Douglas preaches, traders will have better chance to improve.

 

The reason why I say don't read these books,  I have bought over a hundred books and read them.In the end I wasted time and money.Here in this link  you will get a free practical trend trading course.No need to buy books.

 

Trade2win t2w  trend trading courses  free on youtube

 

http://profitabletrading1.blogspot.co.uk/2017/11/trade2win-free-trend-trading-course.html

 

youtube trend trading support resistance free education

 

 

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To finish off, Covel is someone who brings other people's work in Trend Following to the masses. He himself is not a trader and has not made money on the markets.

 

Covel is peddling little information through his books and little information is dangerous, if applied by any traders on this site.He also  peddles biased information.He did not mention the original  MR trend trader failed and lost money.He supplied enough dangerous information to sell his books and courses on trend trading.

 

 

He sell this paradise illusion!

 

paradise house.jpg

 

 

 

How does any trader know  that a rend trading book providing education, is compatible to the trader's personality, risk appetite and comfort zone?How can he be sure, before buying the book, that he is not being led by the blind?How many years will he waste after following internet marketeers and trend trading charlatans?Wasting  on educators  costs traders wasted time, time is money, time isprecious and time which could be spent on charitable work, in place of wasting it on education scam artists through their books.

 

Reading market wizards and the people who traded for big money of £500m, how relevant is to the retail guy with £50,000 or £10,000?These clowns were sitting on Goldman's lap, and others were sitting on Weinstein's lap to get into the movies.They were all in the right place at the right time.How can an ordinary trader, trade like the market wizards?What is the point of reading market wizards, if you can't apply any of it to your own trading, it can not be applied to any practical trading.How man retail traders at I G are sitting on Goldman's lap?

 

Below is evidence of the market wizards and being on Goldman's lap.

 

http://fortune.com/2016/04/11/goldman-sachs-doj-settlement/

 

Former Goldman Sachs Trader 'Fabulous Fab' To Testify Over Shady $2 Billion Paulson Deal

 

http://www.businessinsider.com/former-goldman-sachs-trader-accused-of-helping-on-shady-2-billion-paulson-deal-in-2007-to-tesify-2013-7?IR=T

 

 

https://www.elitetrader.com/et/threads/al-brooks-al-crooks-charlatan.294067/

 

Al brooks author 

 

price action trends books by al brooks

 

We can all sing about trend trading, the trend is your friend and all the brilliant stuff in books .The authors wrote and wrote theories on trend trading, they never traded themselves.Does it make them traders?Do they know about retail trading, to advise retail traders?Have you ever seen any proof, other than than their claims, that they know about retail trading to making money?

 

https://www.elitetrader.com/et/threads/do-trading-education-scammers-99-99-of-the-industry-ever-feel-guilty.312818/

 

 Caseynotes, I totally agree with you in relation to having an 'edge'. This is absolutely crucial to be successful in the long term. Without an 'edge' it is near impossible to be successful and consistently make more profits than losses.

 

After all this you guys talk about having an edge, so all this trend trading has no edge, it is just the style of trading.........nothing more              no better than buying supports based on fundamentals.

 

Then you guys forget the most important edge, without which trend trading strategy is worth zero.

 

If you buy a book, but have no practical step by step method to trend trade, if you don't have the mindset to lose money, are mentally unprepared to trade, if you don't have an edge                   your technical trend trading method with the markets wizards theories will become redundant.

 

 

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Trend following is a style like value investing. Then there is momentum trading and swing trading. These are all different variations. I agree it is down to your personality, mentality, time frame, aim and objectives, etc. 

 

Covel is a marketing man. I agree. He has not made millions investing. I agree.

 

The one thing I would state is be-careful of media links from publications that could include bias. Also what we read is not always right. A perfect example of this is Jamie Dimon stating that Bitcoin was a fraud and is now stating that something slightly different but he is nevertheless not stating it is a fraud at the moment. Someone has asked him to put money where is mouth is and short it using futures.

 

I think media publications online are at times dangerous. Evidence is a strong word. Evidence is basically the available facts or information supporting whether a belief is correct or not. In your links which bits are evidence and which bits are facts? What is the source and how credible is the source.

 

For example an RNS released by a company may be official but also may not necessarily contain the facts as we understand them. They can be interpreted differently.

 

You may be right, I am not suggesting you are not. I have my own opinions and beliefs based on my education, knowledge and experience. I try and keep things simple.

 

I think several of us are merely suggesting reading such books. Whether one believes everything or adopts everything is for them to decide. I don't adopt or believe everything I read but that is for me to decide. 

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