Not really what I wanted to hear. So what advice would you have for me now that you know what I'm trying to achieve?
Not really what I wanted to hear. So what advice would you have for me now that you know what I'm trying to achieve?
Actually I haven't quite figured out what you want to achieve apart from run a turtle-esque trend following strategy. Is it to work for an investment bank, start a hedge fund or trade for yourself? You've mentioned all of them so far....
melkinny360
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hellokimchi
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A few pointers
Firstly, Michael Covel's books may be an interesting read, but I'm sure there's nothing in his expensive courses which can't be found for free online. I've never met anyone who has been pleased with these types of purchases, nor with those seminars. I wouldn't go as far as to accuse him of being a snake oil salesman - but there you go.
You should read Curtis Faith's "Way of the turtle" if you haven't done so and also read his forum over at Tradingblox. As an aside, while very expensive, Tradingblox software may save you months/years of research and testing (I've never used it though...)
Read the Blackstar funds paper "Does trend following work on stocks?"
Trend following is a good way to get rich slowly. The returns are far too lumpy for it to generate a reliable income though. Don't overestimate your ability to whether drawdowns. Very few people can continue to trade daily after they've entered the second year of a drawdown. I started a basic TF system with equities (long only) in the summer of 2007. You can guess how great the backtesting went over the preceding decades, and what happened as soon as I went live. I think my immediate drawdown lasted 2 years and 2 months and was deeper and longer than anything I found in 30 years of backtesting. This is backtesting agreeing with sod's law.
Spreadbetting is not an efficient way to follow long-term trends. The financing costs will kill your account. Even if you're successful, it's highly likely the broker will make much more money from you than you do from the market. My investigations suggest that TF works better on longer time frames these days than in the days of the Turtles.
Firstly, Michael Covel's books may be an interesting read, but I'm sure there's nothing in his expensive courses which can't be found for free online. I've never met anyone who has been pleased with these types of purchases, nor with those seminars. I wouldn't go as far as to accuse him of being a snake oil salesman - but there you go.
You should read Curtis Faith's "Way of the turtle" if you haven't done so and also read his forum over at Tradingblox. As an aside, while very expensive, Tradingblox software may save you months/years of research and testing (I've never used it though...)
Read the Blackstar funds paper "Does trend following work on stocks?"
Trend following is a good way to get rich slowly. The returns are far too lumpy for it to generate a reliable income though. Don't overestimate your ability to whether drawdowns. Very few people can continue to trade daily after they've entered the second year of a drawdown. I started a basic TF system with equities (long only) in the summer of 2007. You can guess how great the backtesting went over the preceding decades, and what happened as soon as I went live. I think my immediate drawdown lasted 2 years and 2 months and was deeper and longer than anything I found in 30 years of backtesting. This is backtesting agreeing with sod's law.
Spreadbetting is not an efficient way to follow long-term trends. The financing costs will kill your account. Even if you're successful, it's highly likely the broker will make much more money from you than you do from the market. My investigations suggest that TF works better on longer time frames these days than in the days of the Turtles.
myhedgedfund
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Hellokimchi,
Very interesting and well thought out post... difficult to disagree with your logic, as it is based on actual experience. Your last paragraph in particular is very informative and I would like to hear more about your thoughts / ideas / proposal behind the statement.
May I ask you to take a look at this thread? I'd like to hear your comments and advise if possible.
Thanks,
Boston
intradaybill
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If anyone is using any method on any timeframe that is entering the second year of a drawdown then that is not trading, it is masochism. I wonder where you got that trend-following systems allow two years of drawdown. I have several TF systems and they never produce more than a negative quarter.
In my opinion Market Profile Trading makes trend following somewhat easier.
If value areas are overlapping then turn trend-following off until the profile reaches 'maturity'. Fade trades only.
As value areas migrate (up or down) without overlap, in particular with Open Drive type RTH open, then turn on trend-following as the trend becomes your friend.
If value areas are overlapping then turn trend-following off until the profile reaches 'maturity'. Fade trades only.
As value areas migrate (up or down) without overlap, in particular with Open Drive type RTH open, then turn on trend-following as the trend becomes your friend.
I have tried trendfollowing methodology for an year and ende din failure. Theoretically, trend following should work. I did all the back testing etc. But the problem is you need large enough capital to trade atleast 10-20 uncorrelated markets. My 20k USD capital was not enough for that also. Also whatever diversification I did, was nullified by growing correlation across assets over the last year. The month of Aug'11 was the worst for trendfollowing system. That was when I lost whole of my capital. As my supposedly uncorrelated trades all headed to losses.
intradaybill
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Don't give up. Trend-following is the key to becoming wealthy. It was your risk management that was the problem. Also, September and October were terrible months for TF Trend-following Disaster on the Horizon? | Price Action Lab Blog
SlowlyButSurely
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sorry for resurrecting this but i would like to know how you fellows are getting along with your trend following systems. As far as i can tell since 2008 it has been the worst years to trade the trend as trend following only really works in bull markets and in some bear markets. at present the markets have shifted to more short term trend formations so that you cant build the long positions needed to make good gains as the markets are unstable and react heavily to news.
we also have some markets being artificially propped up (eur) which can cause large swings.
anyway that's my thought. maybe something to consider if you are on a long losing streak. if you disagree i welcome your ideas too.
SBS
we also have some markets being artificially propped up (eur) which can cause large swings.
anyway that's my thought. maybe something to consider if you are on a long losing streak. if you disagree i welcome your ideas too.
SBS
victoryong
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Hi vish4al,
Did you manage to purchase Michael Cove's course? Do you mind giving some comments on his course.
Cheers.
Victor Yong
Did you manage to purchase Michael Cove's course? Do you mind giving some comments on his course.
Cheers.
Victor Yong
hothand250
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One of my systems is a trend following system very simple and works well with a trend filter like the 50EMA and can be applied to anytime frame from 1 minute to one month.
put the 20 period donchain channel on your chart with the mid line in it you then put a 50 period EMA up on the chart and only trend in the direction of the 50 EMA
if price is above the 50 EMA only trade lone once the pair is above the Donchain Channel mid-line and close trade once the price go's back under the mid-line of donchain channel. Then only trade short when price is under the 50 EMA and price breaks the mid-line of donchain channel and close your short once it crosses back over the mid-line of the donchain channel. This is the system I used when I first started out and it works well to this day.
However I have moved on to be a pure price action trader now the only indicator I use now is the 20 period EMA and trade with trend set-ups.
This is also another great system that you could use the uses only the 50 EMA and the slow Stachatics indicator set at 14-3-3 and you trade in the direction of the slope of the 50 EMA if price is above 50 EMA and EMA is sloping up you wait for the Stoch to go over sold or under 20 and when it crosses back over the 20 line you enter long with trend of 50 EMA the you exit trade once the Stoch reaches the 80 level or the overbought level. For the short side you would trade if price is below the 50 EMA and 50EMA is slopping down you would enter the trade short once the stoch was overbough and crossed back below the 80 level and you would exit once stoch reach over sold or the 20 level like I said this system works on anytime frame as well and for stops on the Stoch/50EMA system you put the stop at the last hi or low price was at before you took your position.
put the 20 period donchain channel on your chart with the mid line in it you then put a 50 period EMA up on the chart and only trend in the direction of the 50 EMA
if price is above the 50 EMA only trade lone once the pair is above the Donchain Channel mid-line and close trade once the price go's back under the mid-line of donchain channel. Then only trade short when price is under the 50 EMA and price breaks the mid-line of donchain channel and close your short once it crosses back over the mid-line of the donchain channel. This is the system I used when I first started out and it works well to this day.
However I have moved on to be a pure price action trader now the only indicator I use now is the 20 period EMA and trade with trend set-ups.
This is also another great system that you could use the uses only the 50 EMA and the slow Stachatics indicator set at 14-3-3 and you trade in the direction of the slope of the 50 EMA if price is above 50 EMA and EMA is sloping up you wait for the Stoch to go over sold or under 20 and when it crosses back over the 20 line you enter long with trend of 50 EMA the you exit trade once the Stoch reaches the 80 level or the overbought level. For the short side you would trade if price is below the 50 EMA and 50EMA is slopping down you would enter the trade short once the stoch was overbough and crossed back below the 80 level and you would exit once stoch reach over sold or the 20 level like I said this system works on anytime frame as well and for stops on the Stoch/50EMA system you put the stop at the last hi or low price was at before you took your position.
NVP
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I read a couple of mike covells trend following books for free recently
He is obviously a very literate and persuasive author and is clearly passionate about his Trend following methords and the multitude of billionare traders who are using it sucessfully
i'm pretty neutral really on the subject.......I certainly like the simplicity of the principle and mike strikes a lot of similar chords with me in many areas of my own trading.....but then thats also the strength of his writing style which is very effective at getting you nodding and agreeing with most stuff he writes........
I wanted to keep this thread alive though again as I would love Trend followers to write about their experiences here and any blogs worth readers for free
thanks all
N
He is obviously a very literate and persuasive author and is clearly passionate about his Trend following methords and the multitude of billionare traders who are using it sucessfully
i'm pretty neutral really on the subject.......I certainly like the simplicity of the principle and mike strikes a lot of similar chords with me in many areas of my own trading.....but then thats also the strength of his writing style which is very effective at getting you nodding and agreeing with most stuff he writes........
I wanted to keep this thread alive though again as I would love Trend followers to write about their experiences here and any blogs worth readers for free
thanks all
N
Read Courtney Smith's How to make a living trading foreign exchange there is more than enough models in there to keep you occupied :clap: he also has a podcast with Covel.
#71 Trend Following Manifesto
Developing a trade system
This is years later so I dont expect a reply but I was wondering if had ever gotten a response from anyone and if you are still interested in trading. I have been trading for a couple of years and have over the past few months read all of Michael Covels books as well as a few others and am really interested in creating and implementing a trading system. I am a network engineer and have talked to some of the programmers in my department and they don't seem interested in the stock market or taking the time to develop an application behind the system that I would like to test.
If you are still interested in this then reply back and we can see about getting this developed and in use! I think that microsoft access is much more robust than microsoft excel and have been learning more about it and also have been learning c# to learn to program.
Thanks for reading and hope to hear back from you guys!
This is years later so I dont expect a reply but I was wondering if had ever gotten a response from anyone and if you are still interested in trading. I have been trading for a couple of years and have over the past few months read all of Michael Covels books as well as a few others and am really interested in creating and implementing a trading system. I am a network engineer and have talked to some of the programmers in my department and they don't seem interested in the stock market or taking the time to develop an application behind the system that I would like to test.
If you are still interested in this then reply back and we can see about getting this developed and in use! I think that microsoft access is much more robust than microsoft excel and have been learning more about it and also have been learning c# to learn to program.
Thanks for reading and hope to hear back from you guys!
tradingwithrayner
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Hi ajenk0!
I'm a trend follower myself and have elements of discretion to it.
Feel free to hit me up if you wanna discuss more about it.
Cheers!
Rayner
I'm a trend follower myself and have elements of discretion to it.
Feel free to hit me up if you wanna discuss more about it.
Cheers!
Rayner
Hi All,
First post.
I've been working on my own 'trend following' system. (The system has been a work in progress since 2008 and I am now confident enough to put some of my own money into it - have also got some funding from a mate).
My background - surfing since I could walk, professional surf lifeguard, now an accountant with experience in Banks/Pension Funds/Real Estate. All those years watching the waves and all those years working with 'so-called' experts have influenced my thinking.
You can only go surfing when the conditions are good, and depending on those conditions you select a suitable board...
My system trades waves of highly correlated indices in pairs (Long/Short) using a 1-30 day time-frame. I have developed my own indicator for this purpose.
My next step is to develop/modify a formula linking market volatility to time. The aim is to shorten or lengthen my indicator time-frames with respect to market volatility. I've done a lot of research into Fractals. Charts look the same when the time axis is removed.
Does anyone know of any research I could look at in this regard?
Thanks in advance,
Hokohoko
First post.
I've been working on my own 'trend following' system. (The system has been a work in progress since 2008 and I am now confident enough to put some of my own money into it - have also got some funding from a mate).
My background - surfing since I could walk, professional surf lifeguard, now an accountant with experience in Banks/Pension Funds/Real Estate. All those years watching the waves and all those years working with 'so-called' experts have influenced my thinking.
You can only go surfing when the conditions are good, and depending on those conditions you select a suitable board...
My system trades waves of highly correlated indices in pairs (Long/Short) using a 1-30 day time-frame. I have developed my own indicator for this purpose.
My next step is to develop/modify a formula linking market volatility to time. The aim is to shorten or lengthen my indicator time-frames with respect to market volatility. I've done a lot of research into Fractals. Charts look the same when the time axis is removed.
Does anyone know of any research I could look at in this regard?
Thanks in advance,
Hokohoko