Trend Following
I would like to focus on several excellent questions discussed
by Michael Covel in his book:
Trend Following: How Great Traders Make Millions in Up or Down Markets
1. How do you determine what market to buy or sell at any time?
2. How much of a market should you buy or sell at any time?
3. How do you determine when to enter a market?
4. How do you determine when to exit a losing position?
5. How do you determine when to exit a winning position?
However, I would like to structure these questions specifically to the stock market (for the purpose of this blog audience) and answer them to the best of my abilities while anticipating comments from readers (for your answers):
1. How do you determine what stock to buy or sell at any time?
Hint: Stock Screens & Scans
2. How much of a stock should you buy or sell at any time?
Hint: Position Sizing and Expectancy
3. How do you determine when to enter a stock?
Hint: Risk/ Reward strategies
4. How do you determine when to exit a losing position?
Hint: Sell Strategies
5. How do you determine when to exit a winning position?
Hint: Taking Profits
I will follow up with detailed answers after you give the questions some thought. Hint: Answers to these questions are all over the blog – see categories and the archives for further clues.
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i can believe that you fall for Mike Covel.
i been visiting your blog for over 2 years and i always enjoyed the content. but Mike Covel??? i had bought the book “trend following” and read it. to me the book is a real joke. the guy is more of a sales man that actual trader. more importantly, i failed to find any information about his trading record. i did however, found some people who share my opinion about the book and the author.
here is the link
http://www.elitetrader.com/bo/index.cfm?action=view&B_ID=93&start=6
B,
I am very aware of the criticisms of Covel but I enjoyed several stories in the turtle book. As for Trend Following, it was ok (I wouldn’t put it in my hall of fame).
However, you are missing the point of the post: I am focusing on five questions that are extremely relevant to trading, regardless of who wrote them.
I used his questions so he deserves credit.
Do understand that your comment has been duly noted.