Trend Following Frequently Asked Questions
You need exact rules. You need an edge. That edge should consist of proven entry and exit techniques, proven position sizing, money management and proper trading psychology. Our trend following training provides you with precise trend following systems. You will receive:
- Exact rules/instruction for selecting a portfolio.
- Exact rules/instruction for entering a market.
- Exact rules/instruction for exiting a market with a loss.
- Exact rules/instruction for exiting a market with a gain.
- Exact rules/instruction for betting on each trade.
You will receive a complete trend following systems trading education with full support. If you have any confusion while learning our built-in support allows you to ask personal questions unique to your situation. Bottom line, you will have exact systems you can apply toward up and down markets for potential profit--immediately.
Q: What is trend following exactly?
Q: What are trend following returns?
You can make above average returns across all markets during bull and bear markets. Review performance numbers produced by trend following over the last 3 decades.
Q: What are the origins of trend following?
Q: Is trend trading only for U.S. traders?
Our students are in 70+ countries trading on exchanges from Europe to Asia to the Middle East to South America to North America.
Q: Is your training for the individual investor? For the new or beginner trader?
The majority of our students are individual traders and investors. Many are new with no experience. Some have experience, but the wrong kind of experience. Some only know buy and hold. Some only know value investing (i.e., Buffett) or fundamentals. Whether you are age 21 and in college, age 30 working a job, or age 60 in retirement, you can learn the techniques of great traders.
Q: Is your training for market professionals?
Our training is used by experienced traders worldwide. We have trained hedge fund managers to CTAs to CFAs (Chartered Financial Analysts) to CMTs (Chartered Market Technicians) to brokers to financial advisers on every continent.
Q: How was your training assembled?
The great traders, along with their trading rules, are not easily accessed. However, Michael Covel has dedicated his life to assembling their trading systems and lessons. Covel has spent the last 15 years on the 'inside' learning from the greatest traders of our time. View Covel's trading mentors.
Q: Are your trading systems just "Turtle Trading"?
No. Michael Covel's The Complete TurtleTrader explains the Turtle story and system in detail. It is the definitive Turtle resource, but our systems and training go much farther. Human interaction with Covel and his staff, the live teaching element, is entirely different than a book.
Q: The top end of your trading systems and training is nearly $3000?
Paying for trading education is far less expensive than losing a fortune with no trading plan. How much will our trading education cost? Our cost is negligible if you consider it an investment in your future wealth. All of our research effort took time, energy, and money, and our firm is capitalistic, but at the end of the day our instruction gives you the chance to make big money.
Q: What are the differences among your (4) systems and training products?
A features comparison here.
Q: I'm a business student and I have always disliked the way professors downplay anything but fundamentals. I'm considering ordering your systems and training to continue my education in trading and I just had one question. I'm curious as to whether the systems in your training can be applied to shorter time frames like hourly or 4-hour charts?
No. Day trading is fool's gold. Our training will be worth millions to you over a lifetime if you simply understand that day trading is a waste of time. Want more on the subject? Read.
Q: I am concerned about having the right exit strategy.
Traders without an exit plan always lose. Applying explicit exit protocols to limit damage during market declines is the name of the game. That means having an exit strategy for all of your positions at all times. That means deliberately, consistently and mechanically 'cutting losses short' while letting your winners 'run.' We teach our students how.
Q: Have your teachings and materials evolved over time?
The core principals of trend following are timeless, but year after year our firm adds to instructional materials, adding new proprietary trading systems and always improving our support to help students learn more efficiently. Nothing our firm teaches is ever dated.
Q: What starting capital is needed?
Q: What is the difference between your books and courses?
The books are great resources filled with thousands of details, and they have helped many people learn, but our systems and training with support are different. Questions come up. Students need help. Our personal instruction gives insights that a book can't give. Additionally, there are many proprietary trading systems in the courses not included in the books.
Q: Will too many trend followers make it less profitable?
No. A great example is 2008. Trend followers made a fortune. The profitability of trend following shows absolutely no sign of slowing down. Also, review chapter 11 of Covel's book Trend Following.
Q: Can I trend follow in my retirement account?
Yes. 401ks, IRAs, Keoghs, Seps, etc. You can trade stocks, futures and ETFs in retirement accounts.
Q: What markets can be traded as a trend follower?
All markets can be traded with trend following methods: stocks, bonds, options, currencies, commodities, ETFs and LEAPS®.
Q: Are you sure trend trading works on stocks?
Yes. Read more.
Q: Is this only for futures trading?
No. Trend following is not instrument specific. Trend followers can and do trade all types of instruments. Some trade futures. Some trade FX (or Forex). Some trade ETFs. Some trade LEAPS® options. Some trade stocks. Some trade commodities. For example, today trend following traders can trade ETFs and get exposure to commodities markets without having to trade futures. We help navigate you through what is the best option for your situation.
Q: Is trend following risky?
Life is risky. You might get hit by a car crossing the street. All trading is risky. However, if you have a concrete plan, risk is manageable. That is the key to the success of great trend following traders. As you have seen in the last decade buy and holders, mutual funds, fundamentals, etc. don't control risk at all.
Q: I am currently a financial adviser and will be going back to school for a 4-year degree in the summer. As far as school is concerned what type of courses would be most advantageous for me to take or learn that would help in trend following?
Most finance departments don't know about trend following. If they do, they call it 'luck'. In fact, many of the greatest traders had little to no experience trend trading before starting. Trend following legend John W. Henry, for example, did not have a college degree. However, the great trend traders have been motivated to learn and work hard.
Q: How much math is involved in trend following for success?
+, -, *, / -- the basics. A degree in math, statistics, or economics is not needed to trade trend following techniques. Staff, premises, and expensive overhead are not required.
Q: Is trend following trading black box system trading?
This is not 'black box' trading. All rules and philosophies are fully disclosed.
Q: Will I be able to make money in bull and bear markets?
The strategies you will learn enable profit in both rising and falling markets.
Q: Do the great trend followers watch the markets during the day?
Some trend followers only trade once a week using weekly bars. Forget the ridiculous nonsense of day trading and 5 minute bars.
Q: How much time is required to trade as a trend following trader?
You can spend a minute or two per market each day. For example, let's say you check prices in the evening, then with one trade on your PC in the morning, you place or change any orders in accordance with rules. Use your iPhone or Blackberry to do it. Our trend following trading systems use daily data to determine buy and sell signals. This is not day trading or high frequency trading. Orders can be placed before the market opens and do not need hourly monitoring. Most top traders manage their trades in 10 to 30 minutes per day. Trend follower Richard Donchian once said: "If you trade on a definite trend-following loss limiting-method, you can trade without taking a great deal of time from your regular business day. Since action is taken only when certain evidence is registered, you can spend a minute or two per [market] in the evening checking up on whether action-taking evidence is apparent, and then in one telephone call in the morning place or change any orders in accord with what is indicated. [Furthermore] a definite method, which at all times includes precise criteria for closing out one's losing trades promptly, avoids...emotionally unnerving indecision." Each day you determine entries and or exits for the following day. You can then buy or sell "at the market" on the open the next day.
Q: Why is money management needed?
Money management, also called risk management or position sizing, is a critical component of trend following trading success: read more.
Q: Are markets different now?
Markets are the same because they always change. Trend following trading adapts to change. That's the key.
Q: Isn't 24-hour news needed?
No. You can use the internet to get closing price quotes. You don't need real-time data or news. In fact, you don't need news at all.
Q: Is leverage used in trend following?
Yes. All great trend following traders use leverage. It is a tool to be used correctly. We teach how. Keep in mind, this is not the use of leverage that sunk so many Wall Street banks. This is different.
Q: Once I complete your training will I need my personal broker or financial advisor to help me trade successfully?
Q: What do you think of Gann and Elliott Wave?
Q: Once training is completed what additional expenses will be needed to start?
You need money to trade and daily price data (about $20/month). We have a special discount set up with a leading provider. All of our students receive 10% off CSI Data's advertised prices.
Q: I've lost a ton of money in my 401K. Can trend following trading help? Isn't this expensive instruction?
Our firm can help and it is hoped that our descriptions make that clear, but how is our instruction expensive if you just said you lost a ton? We charge for education, for our time, instruction and expertise, but it is an investment. You can always keep buying and holding or trust that Social Security will be there. More on our value proposition.
Q: I'm in the beginning stages of starting a fund and I have a lot of questions, but I really haven't been able to talk to anyone about it, mostly because I haven't met anyone in the business. I was wondering if I put a few questions together if you could forward it to someone you think could be helpful in answering them?
A critical feature of our systems and training is support. These are the types of questions you will have answered. Our firm can help on introductions, along with hints on how to break into the business or just advice on trading your own account.
Q: I currently work in a Fortune 500 company as a Finance Director. I was reading your book on The Turtles and got more interested and read your web site. I'm interested in your training courses, but I have to be honest, it seems strange that someone is willing to train or give away a process that works. This is one of my questions.
Think about the Turtles. Think about all of the trend followers with decades of trend following trading results. Most people don't want to change. Most people are happy losing with buy and hold. Sad, but true. This issue is also addressed in the last chapter of the book Trend Following.
Q: Does your trading systems and training explain exactly which markets to trade and why?
Yes. A key to the consistency of trend following is diversification across markets. Trend following exposure to all markets allows profits from trending markets to cover losses from other markets. Big moves, and the profits from those, offset losses. Additionally, using the exact same rules and parameter values across markets is a key factor in keeping trend following trading systems robust.
Q: Are chart techniques and studies used to pick entry & exit levels and where to place stop levels? Do you teach a one-size-fits-all method of level picking and using indicators or do you tailor it to the individual?
You will learn how to make all trading decisions regardless of your situation. Rules adapt. You learn it all.
Q: I keep reading about fancy software, red light/green light, and all kinds of complicated trading strategies that seemingly only rocket scientists can trade. Is that what this is?
No. The real risk in today's age is over-doing a trading system. There is so much computing power available and so much data available, but the reality is that great trend following can be explained on the back of a napkin. We help our students to navigate these issues.
Q: Are there discounts?
Q: Do you have critics?