Trend Following: Learn to Make Millions in Up or Down Markets

The Investment Strategy That Keeps on Making Money While Everyone Else Is Losing It: How Trend Followers Made a Fortune During the 2008 Stock Market Crash

Did your buy and hold investments survive the crash of 2008? While many were getting hammered, trend followers were earning profits ranging all the way up to +40% for the month of October 2008 alone!

Now, the #1 guide to trend following has been thoroughly updated to reflect 2008’s cataclysmic events. Michael W. Covel reveals exactly how the trend followers achieved those amazing results. Using simple, up-to-the-minute charts from top traders, he doesn’t just prove this strategy works: He shows why only a technical system based on following price trends can win over the long term.

Best of all, he shows you exactly how to apply the same strategies in your own portfolio--so you, too, can keep on profiting no matter what happens next!

For more than 30 years, trend following has been the one trading strategy that’s consistently delivered extraordinary profits in bull and bear markets. While most investors were losing a fortune in the 2008 stock market collapse, stuck in buy and hold investments, trend followers were earning huge profits...up to a whopping +40% in the single month of October 2008! The proof’s in this book: brand-new data you can view for yourself, plus all the information you need to know to utilize the same timeless strategies in your portfolio.

In this fully updated edition, trend following expert Michael Covel introduces the traders and fund managers who’ve been using this strategy for decades, adding brand-new profiles such as David Harding, who manages $10 billion plus dollars through his London-based trend following firm. Then, Covel walks you through all the concepts and techniques you need to use trend following yourself. One step at a time, one simple chart at a time, you’ll learn how to understand price movements well enough to profit from them consistently--in any market.

Today, you need trend following more than ever. Read this book, and put it to work for you!

• Real proof, real data, real results
  Includes over a decade of detailed performance charts, updated to include the Fall 2008 market crash
• All the Information You Need...in One Number
  Why the market price still tells you all you need to know to trade--and always will--in both bull and bear markets
• Pinpointing Targets of Opportunity
  What to trade, when to trade, and how much to trade. Extraordinary trader profiles, from David Harding to John W. Henry to Ed Seykota
• Meet Today's Leading Trend Followers

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Currency Trading and Intermarket Analysis

Currencies are becoming an integral part of many investors' portfolios and have grown to be a distinct asset class in banks' investment products. While the mechanics of the forex market and the theories underpinning it have been widely explored, there has been little discussion regarding the practical intermarket relationships shaping currencies via interest rates, equities, and commodities.

Nobody is more familiar with this situation than author Ashraf Laïdi. As head FX strategist at CMC Markets—one of the world's leading forex/commodity brokers—he understands the forces shaping today's currency market and their interplay with interest rates, equities, and commodities. And now, with Currency Trading and Intermarket Analysis, he shares his extensive experiences in this field with you.

Following an innovative approach based on what still works and what doesn't in currency market analysis; applying charts and case studies to intermarket analysis in unprecedented ways; and weighing both old theories and newly emerging phenomena in this arena, Currency Trading and Intermarket Analysis will put you in a better position to assess shifts in economic and market dynamics and make more profitable trading decisions in the process.

Some of the essential issues addressed include:

• The latest commodity boom with a breakdown by individual commodity group and its implication for currencies
• The relationship between short- and long-term interest rates and how it can be applied to anticipate vital shifts in central bank decisions and turning points in economic growth
• The drivers of risk appetite in the market and their effect on foreign exchange
• Central bank currency reserves in regions such as the oil-producing nations, and the evolution of power between the Dollar and the Euro
• A gold-based approach to valuing the major currencies and determining their secular strengths and weaknesses over the past decades

Currency trading has increased in size and speed, and so has its impact on the global financial scene. Having a solid grasp of these markets is no longer limited to figuring out interest rate and growth differentials. Currency Trading and Intermarket Analysis outlines the tools needed to understand the macroeconomic and financial nuances of this dynamic field and provides you with insights that are essential to making the most of your time within it.

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How the World's Best Traders Master Risk

“I like risk. I embrace risk.” -Turtle trader Curtis Faith

Risk is scary, to be sure, but it's a fundamental aspect of the investing world. Without it, profit would not exist. The trick is to accept, anticipate, manage, and mitigate risk. In other words, master it.

Curtis Faith revealed the extraordinarily successful trading system of the now-famous group of investors known as the Turtles. Now, in this highly anticipated follow up to that bestseller, Faith delves deeply into the risk-mastery strategies that made the Turtles the envy of the investing world.

Inside the Mind of the Turtles provides expert insight into how great traders combat the natural but counterproductive response to risk. Faith begins by examining the nature of risk and the human being's natural response to it. Then he outlines proven techniques for seizing control of it. You will learn how to:

* Set your main focus on acquiring gains--not avoiding losses
* Place equal importance on assets already spent and those still on hand
* Judge the quality of decisions based on their inception rather than their outcome
* Avoid drawing conclusions using too little information

You'll find valuable advice not only from Faith, but from some of the greatest financial minds on the scene today, including fellow Turtle Jerry Parker, venture capitalist Simon Olson, and Howard Lindzon, founder of the popular Web site, "WallStrip." Use their collective advice, and you'll find yourself approaching risk in ways you never dreamed possible.

In today's economy, controlling your aversion to risk is not just prudent--it's an absolute necessity. Economic turbulence more often than not leads to poor investment decisions. Inside the Mind of the Turtles will help you conquer the fears that can cripple even the most experienced investors out there.

Take control of risk . . . before it takes control of you

Don't like uncertainty? Doubt makes you nervous? Most people are averse to it, but risk is unavoidable to the serious investor. In this groundbreaking book, Curtis Faith helps you not only form a truce with risk, but actually make it your ally.

One of Chicago's famed Turtle traders, Faith credits his group's unprecedented trading success with its mastery over the psychology of risk. In Inside the Mind of the Turtles, he explains how to view risk as an asset-and invest accordingly. Covering his own techniques, plus those of other traders, speculators, hedge-fund billionaires, and venture capitalists, Faith teaches you the seven rules for mastering risk:

* Overcome fear
* Remain flexible
* Take reasoned risks
* Prepare to be wrong
* Focus on market realities
* Respond to change quickly and decisively
* Concentrate on decisions, not outcomes

Only those who can control their fear of risk will move forward in the investing world. This has never been truer than it is in today's topsy-turvy global economy. Read Inside the Mind of the Turtles and never again hide inside your shell in the face of risk.

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Stop and Make Money

How To Profit in the Stock Market Using Volume and Stop Orders

Here is a list of the definitions of CFD order types that you may need to use to trade CFDs, and discussion on how some CFD brokers or providers fill these orders differently from others.

CFD market order
A market order is an order to buy or sell as soon as possible at the best available market price.

Some CFD market makers will allow you to place a market order when the market is closed, and so will get you in when the market next opens. Other CDF market makers will require you to place the order when the market is actually open. So this may be important if you work in the mornings and so may not have access to your computer at those times.

CFD limit order
A limit order to buy CFDs at a limit price means that you will buy the CFD if the price trades at or below that limit price.

A limit order to sell CFDs at a limit price means that you will sell the CFD if the price trades at or above that limit price.

Limit orders may be used to enter a position, or to exit a position.

For example, to enter a long CFD position you can place a limit order to buy a CFD if the price trades at a specific price or lower. When placing these orders in the evenings, some platforms will allow you to place these limit buy orders at a price that is either above OR below the last traded price. If placing the limit order above the last traded price, this means that if the CFD trades at or below that price tomorrow, you’ll get into the trade. So it gives you a good chance to enter the CFD during trading hours tomorrow.

As a different example, you can exit a long CFD position with a limit order to sell CFDs. This is otherwise known as a “take profit” order. For example, if you’re in a long CFD position and the price is currently $11.70, and you set a limit sell order at say $12.20 which is your profit target, if the price rises to or above $12.20, then you’ll be exited at your profit target.

Note that these prices are for illustration only and is not a recommendation or a part of any particular system.

CFD stop order
A stop order to buy CFDs at a stop price means that you will buy the CFD if the price trades at or above that price.

A stop order to sell CFDs at a stop price means that you will sell the CFD if the price trades at or below that price.

Stop orders may be used to enter a position, or to exit a position.

For example, stop orders are commonly used as “stop loss” orders to exit you from a trade if the trade goes against you. If you’ve bought some CFDs at $2.30, and set a stop loss order at say $2.10, this means that you will sell the CFDs and thus getting you out of the position, if the price falls to or below $2.10.

As a different example, stop orders can be used to enter a position, otherwise known as a “stop entry”. For instance the price of a CFD is currently $8.00 you may place a stop buy order at $8.25, this means that if the price rises up to and above $8.25, you will be taken into the trade.

Note that these prices are for illustration only and is not a recommendation or a part of any particular system.

If Done Orders
If you want an order to be active only after another order is filled, then you're looking to do an "if done" order.

For example, if you're placing a limit order to enter a CFD in the evening with a CFD provider that allows orders to be placed out of market hours, then you may also want to place your stop loss order at the same time. But you don't want that stop loss order to be active until you actually enter the position.

Therefore, you can set up a limit order to enter a CFD (that's placed, and is pending to be filled), and then you place a stop loss order also, but it's linked to the first order, as an "if done order".

Differences in order placements between different providers
Note that different CFD brokers may execute these orders slightly differently.

For example, some providers will require that an adequate volume of underlying stock is traded at your stop loss before you stop loss is filled. While some providers require only that the underlying stock was traded at the price to exit the CFD. On the other hand some providers will do a weighted average price if there’s inadequate volume at one price level.

The way to find out these details, check their websites.

If it's not there, then ask them by filling in their online contact forms, or sending them an email or by phone.

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Be a better trader today. Buy Stop and Make Money from Amazon to improve your profits.

Richard Arms is one of the world’s most respected stock market technicians. His expertise in this field is unparalleled, and now, with Stop and Make Money, he reveals how to profit from short-term price movements in the stock market—whether you’re buying or selling short—by accurately interpreting price/volume information and effectively employing stop orders to enter and exit positions. With this book as your guide, you’ll quickly discover how to anticipate short-term stock market moves and improve your overall trading activities.

Indicators

What can indicators do? What can indicators not do?

Part of any trader's success is their indicators. Every trader needs a good set of indicators, or strategies, to help him consistently take profits from the market. Your trading indicators are important foundation in your daily trading. A good system with rules, discipline and trading skills can produce good results. However, remember, indicators are simply tools.

Without knowing price action or different market conditions any trading tools can become useless. As we always teach “Indicators are only 10%, 90% is the trader”.

An architect, with a good set of tools, can make beautiful things because he has a plan, he has the skill to build, and he knows how to use his tools. However, these same tools do not make him an architect -- his skill and education make him an architect. Another example is if your handwriting is bad, you cannot blame the pen you are writing with. Instead you need to practice your handwriting skills. Every trader must know how, when and where to use the tools for his consistent success.

And when it comes to gaining experience, remember, "Rome was not built in a day, but years”.

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Support and Resistance Levels

Why do traders always talk about support and resistance levels? What do they mean and how can traders use these levels to better understand where the market is heading next? Understanding support and resistance levels can greatly assist both traders and investors. It's all about understanding how prices tend to move. There are usually psychological barriers to prices moving beyond key levels. Support and resistance is all about understanding where those levels are and how prices are likely to move from that level.

Support level

Think of a support level like a physical floor on the share price. Say that a share is trading at $4.30 and imagine there is a floor at $4.00. As the price moves towards $4.00, it has a difficult time getting past that price because the floor stops the price from going below $4.00. In fact you will probably see the price bounce off $4.00 as it tries to drill a hole in the floor. The more times that the price touches the floor, the weaker the floor will become. This occurs until the floor is broken. Once the floor is broken, the share price is free to fall to the next floor or support level.

Resistance level

Once a support level has been broken it becomes a resistance level. A resistance level is like a ceiling. Say that a share is trading at $4.30 and it is moving upwards but there is a ceiling at $4.50. It tries to break it but can't so it keeps on bouncing off this point. The more times that the share price touches this point, the weaker the ceiling becomes until the share price breaks past it and that resistance level is now a floor to future price movements. What's their significance? As you can see, support and resistance levels are simply areas that prices seem to have difficulty moving past. They are significant because once broken, it leaves the share price relatively free to move until it hits the next support or resistance level.

So how do you identify support and resistance levels? Support and resistance are important concepts in charting or technical analysis. In technical analysis, the past casts a shadow over the future by repeating itself in patterns. Hence, support and resistance levels are usually historical levels where the share price had difficulty moving through in the past. Often these can be previous high points or low points. There are many other tools you can use.

Fibonacci series

The Fibonacci series is a series of numbers which has an uncanny ability to describe patterns in nature and natural relationships. These proportions can also be applied to the way that share prices move. Important percentages include:

• 23.6%
• 38.2%
• 50%
• 61.8% and
• 78.6%

The level of 50% isn't really a Fibonacci ratio but nevertheless is considered an important level. When using the ratios, usually the distance from the beginning of a trend to the end is measured. The ratio is then applied to the gain or loss to work out where the next level of support or resistance will be. For example, if the share price rose in a trend starting from $3.00 and end at $5.00 before falling, then the first Fibonacci support level should be at 23.6% of $5.00 - $3.00 which is $2.00.

So at $4.52, the next 32.8% support level would be at $4.24. Then the 50% retracement would be at $4.00 and then so on and so forth. Psychological barriers Essentially support and resistance levels are psychological barriers for the share price which act like a floor for the share price when the share price is rising (support) and like a ceiling when the share price is rising (resistance). Happy investing!

Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and stock market research for frequent traders and investors.

RECOMMENDED BOOKS ON THIS TOPIC:

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Building Wealth in the Stock Market: A Proven Investment Plan for Finding the Best Stocks and Managing Risk

All traders need a complete model for investing successfully and safely in bull and bear markets.

Experienced investor and teacher Colin Nicholson shares with readers his very own investment plan — one that has been honed over 40 years and that has seen him consistently beat the market and his target rate of return in Building Wealth in the Stock Market.

Everything in Nicholson's investing method is fully disclosed simply and with a minimum of market jargon. The central idea is how to manage risk in order to grow capital and secure a stream of dividends. The various risks to be managed are explained, along with strategies for managing them. Aspects also covered include:

• how to improve your decision-making skills, modelled on the way the best investors think
• what is needed to succeed and why having an investment plan is crucial for success
• how to select stocks, using charting and fundamental ratios in combination to achieve a margin of safety
• how to manage your portfolio - when to buy, how to build a position, when to cut losses and when to take profits.

The methods are brought to life through case studies based on real investments and the sharing of insights gained from years of experience and research. This book will change the way you think about the stock market forever.

Technical Analysis of the Financial Markets

"If one could read only one book on technical analysis, this should be the one." --Knight-Ridder Financial Products and News (on the first edition, Technical Analysis of the Futures Markets)

Before beginning a study of the actual techniques and tools used in technical analysis, it is necessary first to define what technical analysis is, to discuss the philosophical premises on which it is based, to draw some clear distinctions between technical and fundamental analysis and, finally, to address a couple of criticisms frequently raised against the technical approach.

Technical Analysis of the Financial Marketshas already taught thousands of traders the concepts of technical analysis and their application in the futures and stock markets. Covering the latest developments in computer technology, technical tools, and indicators, the second edition features new material on candlestick charting, intermarket relationships, stocks and stock rotation, plus state-of-the-art examples and figures. From how to read charts to understanding indicators and the crucial role technical analysis plays in investing, readers gain a thorough and accessible overview of the field of technical analysis, with a special emphasis on futures markets. Revised and expanded for the demands of today's financial world, this book is essential reading for anyone interested in tracking and analyzing market behavior.

"One way to get started in technical analysis is to read a good book on the subject. One of my favorites is Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications by John J. Murphy. It's an easy read." Ralph J. Acampora, CMT, Managing Director, Prudential Securities Inc.

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The Disciplined Trader: Developing Winning Attitudes

How do traders learn the critical behaviours necessary in responding to market conditions and opportunities?

The Disciplined Trader: Developing Winning Attitudes is written by an experienced commodities trader, Mark Douglas who has considered and confronted the problems he experienced in trading.

Mark Douglas starts the book out from a perspective that many traders can identify with-crushing defeat. Humbling himself to the higher power that the market is and analyzing the formula for defeat, Mark Douglas shows how he was able to reverse-engineer it to find the formula for success that many of the book's readers over the years have found useful in exorcising their own psychological demons.

Central to Douglas' thesis is that the elements of character that produce success in most of life's endeavors are completely different from those that will make you successful as a trader. To thrive in business or some professional career, you have to work hard to develop the skills that will allow you to be in control of your environment. To build a business empire, you have to be a great leader of people. To become a heart surgeon, you have to learn how to control your scalpel. To be a good mother, you have to know how to discipline your children.

But successful trading, says Douglas, is the process of yielding to the market and being in control only of yourself and the way you respond to changing market conditions. When the idea of being in control of yourself sinks in, you realize that you as a trader get exactly what you deserve from the markets. If you consistently get poor results, you deserve this. If you consistently get great results, you deserve that. The market doesn't care, one way or the other.

As with any book filled with original and profound ideas, The Disciplined Trader isn't always an easy read, particularly as it slogs through the painful process of pummeling away at our self-destructive mechanisms. Fortunately, as with life, the journey provides a reward and Douglas spends the final chapters of the book explaining practical techniques that will help you to "get it together" as a trader.

Trading in the Zone

Maximizing the trader’s state of mind is the key to successful results.

Conflicts, contradictions and paradoxes in thinking can spell disaster for even a highly motivated, astute and well grounded trader. Mark Douglas, a trader, personal trading coach, and industry consultant since 1982, sends the message that "thinking strategy" will profoundly influence a trader’s success rate. Douglas addresses five very specific issues to give traders the insight and understanding about themselves that will make them consistent winners in the market.

Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude offers specific solutions to the “people factor” of commodity price movement. It uncovers the true culprit for lack of consistency when it comes to stock picking: lack of focus and self-confidence. Through simple exercises, traders will learn how to think in terms of probabilities, and adopt the specific beliefs necessary to developing a winner’s mindset. Along the way, they’ll gain valuable insights into their own entrenched misconceptions about the market.

Backed by compelling examples, Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude adds a new dimension to getting an edge on the market. Through a better understanding of themselves, as well as of Wall Street’s realities, traders will come to leverage the power of their psyche for unprecedented profitability.

Entries and Exits

Come behind closed doors and see real trades made by real traders.

Go into 16 trading rooms where you meet traders who open up their diaries and show you their trades.

Some of them manage money, others trade for themselves; some trade for a living, others are on the semi-professional level. All are totally serious and honest in sharing their trades with those who would like to learn. You will meet American and international traders who trade stocks, futures, and options using a variety of methods. All are normally very private, but now, thanks to their relationships with Dr. Elder, you can see exactly how these traders decide to enter and exit trades. Each chapter illustrates an entry and an exit for two trades, with comments by Dr. Elder. With Entries & Exits: Visits to 16 Trading Rooms as your guide, you can get closer to mastering the key themes of trading—psychology, tactics, risk control, record keeping, and the decision-making process.

The companion Study Guide for Entries and Exits is filled with striking insights and practical advice allowing you to test your knowledge and reinforce the principles outlined in Entries & Exits: Visits to 16 Trading Rooms

You are about to visit the trading rooms of sixteen men and women. These traders live in different countries, follow different markets, and use different methods, but all share several traits—most importantly, their dedication to trading. They are utterly serious about their work, while most of the amateurs who supply the bulk of their winnings are chasing the excitement of an adrenaline rush.

Why would a person who is trading for a living talk about his or her method instead of grinding out profits in silence? Winners know full well that success in trading does not depend on knowing "the secret." There is no secret—only hard work, focus, attention to detail, being careful and long-term oriented with money, and having a bit of flair.

Trading is a vast field, and like a doctor, you must specialize. Many beginners spread themselves painfully thin by investing in and day-trading stocks, futures, and options. Each trader in this book concentrates on an area that appeals to him or her, be it buying breakouts, writing puts, or trolling for dull stocks ready to explode from consolidation zones.

People become successful when they focus on what they love to do. In reading Entries & Exits: Visits to 16 Trading Rooms , you will probably come across a trading vehicle you like or a concept that appeals to you. Once you find it, stay with it and mine that area for its rich deposits.

There are massive differences between traders at various stages of development. Beginners look for tips, while intermediate traders keep asking about indicator settings. Experienced traders love to watch others make decisions and explain them. Traders in this book
will share a wealth of information with you; what you take home is entirely up to you.

Trading can give you money, which can buy many good things—freedom from a boss, the ability to travel wherever and whenever you like, and much more. Still, when the chips are down, it is not money that determines the quality of your life. Your goal in trading should be to become the best professional you can be.

We owe a debt of gratitude to the sixteen traders who opened their trading rooms—helping all of us become better traders and serving as examples of kindness, generosity, and drive. They show us that there is more to life than money, even in a trader's life. This book is designed to help you break out of isolation, learn from others, pick up ideas that suit your style, and return to your trading room a better, more confident trader.

How to sell and sell short

Selling is the hard part of trading. If the stock we buy rises, when do we take profits? If our stock falls, when do we bite the bullet and exit the trade? If our stock stagnates, when do we say enough is enough and move on to another opportunity? Every serious trader must make these decisions.

Beginners and amateurs invest the bulk of their time in looking for new trades. Many become pre-occupied with finding some magic combination of indicators that will always identify good stocks. They assume that if they get the entry right, the trade will take care of itself. Professionals, on the contrary, understand that monitoring the reward-to-risk ratio of an open position and exiting at the right price and time is absolutely fundamental to their success.

If perfection is possible anywhere, it is certainly not in trading. No one can consistently pick the absolute tops and bottoms. Good trading means taking reasonable profits and limiting losses. Reaching for extremes is not a viable long-term strategy. Leaving some money on the table is a normal and even positive thing. When it comes to profits in trading, the power word is "enough." A mature trader knows when to exit.

In Sell and Sell Short, Dr. Alexander Elder explains how to set profit targets and stop-loss orders prior to entering any trade. He shares real-world examples that show how to manage your position by adjusting your exit points as the trade unfolds. Specifics include:

• How to control risk by linking the placement of your protective stop with your money management and position size
• Where not to put your protective stops
• Why using moving averages as profit targets works well in the early stages of an upmove
• Why channels or envelopes are better targets when you are riding a trending stock
• How to use support/resistance areas for profit targets and stop losses in long-term position trades
• How to adjust your targets when market conditions change or your stock blows through the initial profit target

Stocks go down as well as up, but most market participants only go long—effectively throwing out half of their profit opportunities. Dr. Elder shows that stocks tend to fall twice as fast as they rise. This provides great opportunities for faster profits in selling short, but calls for different strategies than when trading from the long side.

Shorting—profiting from market declines—is one of the favorite games of market professionals, and they account for the bulk of shorting in most markets. Whenever you see a situation in which the mass of amateurs is crowding one side of an issue, while the more experienced and better capitalized professionals are on the opposite side, ask yourself—which side is more likely to win? That is the side of the market which you want to be on.

It pays to run your trading account like a hedge fund, with some long and some short positions at any given time, shifting their balance as your view of the market changes. Being comfortable with selling short allows you to wrestle with the market while standing on both feet. This is a much more comfortable position for a battle than standing on only one foot—only going long.

Trading for a Living

To master successful trading is based on three M’s: Mind, Method, and Money. Trading for a Living helps you master all of those three areas:

• How to become a cool, calm, and collected trader
• How to profit from reading the behavior of the market crowd
• How to use a computer to find good trades
• How to develop a powerful trading system
• How to find the trades with the best odds of success
• How to find entry and exit points, set stops, and take profits

Trading for a Living helps you discipline your Mind, shows you the Methods for trading the markets, and shows you how to manage Money in your trading accounts so that no string of losses can kick you out of the game. To help you profit even more from the ideas in Trading for a Living, look for the companion volume—Study Guide for Trading for a Living: Psychology, Trading Tactics, Money Management.

It asks over 200 multiple-choice questions, with answers and 11 rating scales for sharpening your trading skills. For example: Question Markets rise when

there are more buyers than sellers

buyers are more aggressive than sellers

sellers are afraid and demand a premium

more shares or contracts are bought than sold

I and II

II and III

II and IV

III and IVAnswer B. II and III. Every change in price reflects what happens in the battle between bulls and bears. Markets rise when bulls feel more strongly than bears. They rally when buyers are confident and sellers demand a premium for participating in the game that is going against them. There is a buyer and a seller behind every transaction. The number of stocks or futures bought and sold is equal by definition.