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Trend Following: How Great Traders Make Millions in Up or Down Markets (Financial Times Prentice Hall Books)
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Sales rank 264,026
Customers rating (based on 81 reviews)
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How did trader, John W. Henry, start out as a farmer and end up a billionaire and owner of, first the Florida Marlins and now, the Boston Red Sox? How do traders like Bill Dunn, Ed Seykota and Keith Campbell continually pull profits in the hundreds of millions from both bull and bear markets? The answer is that they are trend followers. Trend following is the only strategy to consistently make money in the markets. Leading expert Michael Covel reveals the underground network of these little-known traders and hedge fund managers who have practiced trend following for years. He pulls back the veil on their strategies by introducing the basic concepts/techniques of trend following such as why the market price contains all the information a trader needs. Covel rigorously reviews and analyzes years of detailed performance data to prove without question that trend following works. He breaks down trend following strategies including how to make volatility work; how to control risk; and how to make successful trading decisions "from the gut."Covel shows why trend following is ideal for individual traders who self-manage their portfolios or for the individual investor searching for a new type of investment advisor. Along the way he debunks an immense amount of misinformation/failed advice from pros who ought to know better. This timely book capitalizes on today's massive move back into the markets and investors' renewed determination to find strategies that really work.
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| Publisher | Financial Times Prentice Hall | | Release date | 04/2004 | | Availability | | | Edition | Hardcover |
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 Detrimental!
For 200 pages you read how much trend followers made, trend followers are so great, they are always winners.... It's almost like the book is promoting some money managers. Seriously the book is pretty bad, I almost feel embarrassed to write a review. According to the author you don't need to know anything about what you are really buying, as long as it trends up. So I wonder if Mr. Covel would buy a bag of dirt for $10 just because it was $7 last week. I don't want to get to the dynamics of trends and explain that after you buy a up-trending security you may lose money. But I wonder if Mr. Covel plays rulette and bets on red after red hits 3 in a row, thinking the new trend is red. I had the feeling that this book is written to increase the number of trend followers so when the time comes some people can dump the stocks easier. I wonder how Mr. Covel knows that you wont be the one standing without a chair when the music stops. Anyway, I will say one thing, buying this book may cost you a lot more than its price.
Where's the Beef?
I agree with all the other reviewers who complain that this book is big on generalizations and has almost nothing to say on how to actually identify and follow a trend. I've rarely read a trading book with so little practical information or one that repeated generalizations so many times.
 data mining and overly verbose
This book was filled with anecdotal reports of traders can have done better than buy and hold through trend following, but the results seemed to be a case of data mining to me. The benefits over buy and hold in the examples were small, but individual years' returns departed so much from the market that these trading methods would be psychologically very difficult to stick with. Finally, there was no comparison of trend following to a broadly diversified and regularly rebalanced portfolio, which should be superior to straight buy-and-hold on a risk-adjusted basis.
The actual "how" to implement trend following was roughly only 30 pages worth of the appendix.
 The book that changed me (as a trader)
I think the title says it all. This is a great book not because of any single sentence or in some great secret formula explained within. Instead it's a great book because after reading it, and absorbing it all, it changed me as a trader. I now ride the market long as it trends up, ride the market short while it trends down, and quietly sit on the sidelines if the market is not trending.
There are some sample programs as an appendix that have actual how-to info on developing mechanical trading systems based on these ideas. I found them to be invaluable in understanding and as further insight into perhaps how the highly successful trend traders profiled in the book actually trade.
If you are willing to leave the 95% of unsuccessful retail traders who sadly spend all of their energy trying to predict the market, and instead want to become part of the 5% that consistently beat the market then perhaps this book is for you. Happy trading.
 Repetitive Generalisms With Little 'How To'
This author repeats generalisms interspersed with many quotations (presumably to add authenticity) but rarely not get specific about 'how to's'.
For example in the section 'How Much of a Market do you Buy or Sell at Any Time', the author tells us numerous trite stories (e.g., money mgmt is like sex) but never lays out a specific money management strategy nor compares different approaches. Unfortunately, this pattern is repeated for about 246 pages.
Also, way too much time is spent describing and then defending Trend Following - I got the point after the first few pages and decided to jump ahead after torcherous repetition.
Good story book but not a practical guide to trading.
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