When it comes to making money in the markets talent is overrated. The best traders are not just born with innate talent they are made traders. Michael Covel's work in this field can be seen across home study courses, books (Trend Following and The Complete TurtleTrader) and a documentary film. In Michael's communications with the best traders certain truths have solidified that explain their success:
- Innate talent is an overrated concept. There is no magical talent that made the Turtles, for example, successful.
- The best traders have the right trading rules and they stick to them. Period.
- Practice makes perfect. Intense practice, persistence over and over again, is the reason great traders make millions, not I.Q. In fact, E.Q. is more important in the long run.
- All great traders have great coaching. For example, it is no coincidence that so many top traders have their roots in the trading incubator Commodities Corporation. Richard Dennis, the subject of Michael's second book, also proved how important coaching is to long term success.
In working with clients Covel has discovered that successful coaching is not about constant motivational speeches, but rather it involves delivering specific corrections at key times to let 'aha moments' happen. The only way those 'aha moments' can happen, the only way that you can 'dial in' and get it, is to stress your circuits. You have to make mistakes and learn from those mistakes. The act of failing and then fixing it is when the magic of learning happens. Repeating that process over and over again, showing human resilience, is real human talent.
How does that apply to the real world of trading to make big profits? The great traders' day-to-day actions and trading rules are not intuitive for most people. The best traders use specific trend following trading rules applied with rigid discipline. Their trading process is nothing like buying a Fidelity mutual fund nor is their trading technique and mentality taught in the universities. In fact, you will almost never hear about the techniques and philosophies Michael teaches in the financial press. The system (government, press and Wall Street) is setup to promote fundamental analysis and buy and hold. Trend following trading is a heresy for the establishment.
Covel has spent over a decade researching trading strategies and world-class traders. That research has led to a successful coaching and teaching of investors and traders across 72 countries. The lessons of how big money fortunes are actually made can be learned, but you have to be open to change.
