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The Little Book of Trading: Trend Following Strategy for Big Winnings Hardcover – August 9, 2011
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―Addison Wiggin, Best-selling author ofDemise of the Dollar; Executive Publisher, Agora Financial, LLC
“In The Little Book of Trading, Michael Covel has collected many gems of wisdom from some of the great traders of our time. After reading this book and piecing together all of the commonalities therein, you’ll begin to understand what it takes to be successful in the markets. Ignore these key truths and one day you’ll watch your account disappear.”
―Van K. Tharp, Ph.D., President, The Van Tharp Institute.
“Michael Covel’s unique insight into trading is invaluable. Both novice and experienced traders can benefit from Michael’s thorough knowledge of markets around the globe. The Little Book of Trading is a must read for serious investors.”
―Louis G. Navellier, Chairman and Founder, Navellier & Associates, Inc.
“Imagine being in the circle of trust of some of the greatest traders of all time, knowing what made them successful and having them share heartfelt advice. Though the eyes of Michael Covel in The Little Book of Trading, you will truly feel this experience.”
―Murray A. Ruggiero Jr., Contributing Editor, Futures Magazine; VP Research and Development, TradersStudio Inc.
“Michael Covel’s Little Book of Trading is a must-read guide to help you succeed in the shark-infested waters of the investment world.”
―From the Forward, Cullen O. Roche, Founder and CEO, Orsus Investments, LLC; Proprietor of Pragmatic Capitalism
“The latest addition to the ‘little book big profits’ series, Michael W. Covel’s The Little Book of Trading: Trend Following Strategy for Big Winnings looks at the financial world through the eyes of successful trend traders … What Covel stresses throughout the book are the accompanying principles that make trend following viable: stick to your plan and manage your risk through diversification, stop placement, and position sizing. These are important principles for any kind of trading, but for trend following they are critical … Successful trend following traders try to capture the outliers, the really big moves that more than compensate for the many small losses they take. This goal requires traders to have confidence in their systems and confidence in themselves. By introducing the reader to successful trend traders, Covel believes that some of their ‘magic’ just might rub off.”
From the Inside Flap
Revealing the tricks which lead to success that today's market wizards keep up their sleeves, The Little Book of Trading is the resource you need to get all markets working for you again.
Recent events have left the average individual investor extremely dubious about playing the markets. But just because some unprepared individuals have paid for their mistakes is no reason to stay away from taking advantage of trending opportunities that, with a little careful planning, can yield exceptional results. Market fluctuation is nothing new, but there is a set of rules and philosophies that you can rely on to get the market back on your side, regardless of whether times are good or bad.
Drawing on author Michael Covel's own extensive experience in the trading world, as well as tips and insights gathered from some of the world's most successful traders, the book identifies the tools, concepts, psychologies, and philosophies that will keep your money growing--and safe--even when the next bubble bursts or the next crisis hits. With each chapter featuring easy-to-understand advice from a top trader or trading firm that has won by beating mutual fund performance, this Little Book prepares the cautious, would-be investor to make money like an old hand and presents a revolutionary new argument--that mutual funds, long the investment vehicle of choice for people looking for security in retirement, are no longer to be relied on.
With everything you need to grab all markets by the horns, this book provides an a comprehensive overview of active investing strategies and risk-management techniques that you can easily use to your best advantage.
- Publisher : Wiley; 1st edition (August 9, 2011)
- Language : English
- Hardcover : 256 pages
- ISBN-10 : 1118063503
- ISBN-13 : 978-1118063507
- Item Weight : 11.9 ounces
- Dimensions : 5.2 x 1 x 7.1 inches
- Best Sellers Rank: #396,955 in Books (See Top 100 in Books)
- Customer Reviews:
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Top reviews from the United States
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Some of the faults include the following. The character sketches are so meager that one doesn't get a decent feel for the traders mentioned. The order of the chapters, paragraphs and even sentences often seem random, as if the author had made a list of 200 things vaguely related to investing, trading and trend following and then put them in one of those transparent shufflers you see in lotto type games, turned the handle to mix the tickets and out popped the book. Finally, there is a snarkiness embedded in the book that gets annoying.
If you've never been exposed to trend following, perhaps this book can serve as an introduction. For those who are familiar with trend trading, I'd steer clear.
I would also like to mention that Michael Covel sells a $3,000 "trading system" on his website. If you're looking for a turn-key trading system, just go to his website and save your Audible credits for something else. I went into this book without reading reviews, and the negative reviews are pretty accurate. The little pieces of actionable information can be derived from reading the positive reviews.
This book is a collection of short stories about traders who developed their own trend following systems and became multi-millionaires. After a few chapters, you'll start to hear the same themes over and over again. It's ultimately about believing in your system and not liquidating your account when you go through massive drawdowns - which is easier said than done.
Throughout the book, Covel advises readers to not watch the news and to only look at charts. While I personally agree that technical analysis is more powerful than fundamental analysis, I think watching CNBC (or Bloomberg) and reading Barrons is perfectly healthy and helps generate awareness of the market.
It's also extremely arrogant to conclude that if retail investors were trend traders in 2008, they would have profited trading pork belly futures instead of losing their homes. Sorry guys, no Stochastic Oscillator or MACD Crossover could tell you that we were about to enter a global economic meltdown.
My issue with the book is that it never once discusses what to look for and what is noise. The only tidbit I picked up was to look for stocks that have made a channel breakout or stocks where the simple moving averages are above each other.
The anecdotes in this book are from decades ago when traders had to draw their own charts nightly based on the previous days closing prices. Fortunately, the market has changed immensely since then. With tools like ThinkOrSwim, TradeStation, eSignal, and TC2000, we have professional grade programs that are more powerful than what the pros had years ago. We have hundreds of technical indicators to choose from. Covel mentions Richard Donchian many times (and rightfully so, as he is the father of trend trading), but never mentions Donchian Channels or any of the strategies that Donchian used. I'd also like to add that Richard Donchian had degrees from Yale and MIT - which sort of goes against the notion that anyone can be a successful trend trader.
There are a few good take-homes from this book, though. I'd say the most useful advice for me is to not develop trade ideas after the market has opened. I can tell you from experience that you will get burned 9/10 times because you get excited and make a knee jerk emotional reaction when a stock gaps up on some positive news (or drops for no reason at the open). A common thread throughout this book is to do whatever you can to remain emotionless. You need your trading strategy to be like a machine. Whatever your strategy is, you have to stick with it.
I do agree with another reviewer who said that your strategy has to be something you develop over the years, tweaking as you go along. It has to fit your personal beliefs. However, this book literally says, "Trend Following Strategy for Big Winnings" on the front cover, and that is false advertising as no strategy is ever discussed.
My advice is to learn the ins and outs of your charting tool of choice (like the 4 I mentioned earlier), develop custom scans and watch lists, and trade small and often. If you're not ready to get your feet wet, you can trade using paper money in ThinkOrSwim or OptionsHouse. Personally, I've learned more from Dough and Tasty Trade (free sites) than I have from any books or paid sites so far. Be patient and don't quit you day job.
1. How much do you buy?
2. When do you buy?
3. When do you get out of losing trade?
4. When do you get out of winning position?
All of these questions have to be answered before you get into the trade.
Author of How To Win More With A Trend Trading System For Stocks
Top reviews from other countries
I'm a 'normal' working class fella who can sometimes doubt himself when I shouldn't but hearing the stories contained in this writing, one thing stands out for me NEVER GIVE UP!!
Lets give 'The Complete Turtle Trader' a whirl!