The Little Book of Trading: Trend Following Strategy for Big Winnings

by Michael W. Covel

How to get past the crisis and make the market work for you again The last decade has left people terrified of even the safest investment opportunities. This fear is not helping would-be investors who could be making money if they had a solid plan. The Little Book of Trading teaches the average person rules and philosophies that winners use to beat the market, regardless of the financial climate.

The market has always fluctuated, but savvy traders know how to make money in good times and bad. Drawing on author Michael Covel's own trading experience, as well as insights from legendary traders, the book offers sound, practical advice in an easy to understand, readily digestible way. The Little Book of Trading:

Identifies tools, concepts, psychologies, and philosophies that keep people protected and making money when the next market bubble or surprise crisis occurs Features top traders in each chapter that have beaten the market for decades, providing readers with their moneymaking knowledge Shows how traders who beat mutual fund performance make money at different times, not just from stocks alone Most importantly, The Little Book of Trading explains why mutual funds should not be the investment vehicle of choice for people looking to secure retirement, a radical realization highlighting the changed face of investing today.

Genres: Finance, Nonfiction, Audiobook, Personal Finance, Business, Psychology, Money

256 pages, Hardcover

First published July 7, 2011

Reviews

[Melanie Cooley · Rating 2 out of 5]

Maybe 2 things that made the book worth reading. But I’m sure those two things could be found in a book full of lots of worthwhile things. Very vague and basic. I enjoyed the capitalism distribution charts in the appendix based on the coin flip analogy (also found in the appendix) and the other valuable point was diversifying by trading each market equally doesn’t mean the amount invested, but the amount of risk in each market. The second being something I’ve read in 2 other books, both of which where better than this one. That being said, it was a really short book, and offers insight to trading psychology as well as time management ideas, which are pretty spot-on. A great read for someone who knows nothing about the finance world or trading, a little bland for anyone wanting to learn something new.

[Kylie Young · Rating 1 out of 5]

Sounds like he just wanted to be different for the sake of being different, so that he can reveal a traders 'secret to success'. I'll put it with the conspiracy theory books

[Corey Graham · Rating 1 out of 5]

Even for a book that's titled, "The Little Book", it had surprisingly little to no information. It reads more like a brochure meant to inspire someone to take up trend-following, but offers no real insight. Each section starts off with an extremely brief bio of a successful trend-follower, followed by a long rant from the author on why trend-following is superior with some generic advice sprinkled throughout (e.g. cut your losses short and let your winnings run).

I really wanted to like this book since I enjoyed Greenblatt's, "The Little Book that Beats the Market." Greenblatt's book is also light (again, as expected for a "Little Book"), but offers a tangible system at the end. The Little Book of Trading, however, offers no such payoff.

If you're interested in reading about inspirational stories with real insights, you're better off just reading one of the books this author alludes to: Market Wizards.

[Greg · Rating 3 out of 5]

The reviews for this book were probably more entertaining than the book itself (or at least funnier).

It doesn't necessarily teach you how to trade, or give you a definite strategy, and when it mentions something like an x day channel breakout, it doesn't tell you exactly what that is, how to locate one or anything like that. Instead it gives some stories and backgrounds of people who aren't all that special but who do something that common wisdom claims is impossible, consistently beating the market.

But since I went into this book expecting nothing from it I guess there is no level of disappointment I could feel as if I got this book and expected some big secret to be revealed. It was fine though as some background material for my latest obsession.

[David Ingvarsson · Rating 2 out of 5]

The author is annoyingly ignorant about other styles of trading/investing then the one he believes in (trend following). Hard to say if the author really lacks understanding of, for example, fundamental investing or just Wants to sell his books by pretending trend following is the only way to go. Also annoying that he never present any proven system, just talk about things like "let your winnings run, cut your losses short". Still think book contains some value for people completely new to trend following, thats why I give It 2 stars.

[Patrick Mak · Rating 1 out of 5]

This book includes interviews of a dozen successful traders.
If you are looking for trading skills or how-to stuff, I recommend you to skip this book.

The more important messages I got out of this book are:
1. Build your own system and have faith in it (without telling you how to find your system-building criteria)
2. Have the concept of money management (which translates into 'Protect your downside!')
3. Ed Seysky is the greatest trader in the author's time

Not much I can get out of this little book.
A disappointing read, after all.

[Vikas Suresh · Rating 2 out of 5]

I was expecting more details and technical stuff but what it really is a distilled version of interviews. I would suggest read/re-read the little book of market wizards than picking up this one. I just couldn't go to the end as I did not see any benefit from reading it.

[Milan · Rating 1 out of 5]

Would you like to learn trading from someone who has never traded?

[Darius · Rating 2 out of 5]

Though I'm dubious about full-fledged "technical" traders, someone recommended Covel's larger book and I settled on the "little book" as a compromise. The book has left me unconvinced. I think some ideas from technical analysis should be incorporated into an investor's toolkit, but not a full-blown approach.

However, even for someone who finds technical analysis more plausible that I do, this book falls short. Much of it is very general, modern-pulpit, motivational-style life advice: get over irrational fear, be willing to try new things, learn to live with risks which threaten damage mostly to ego but have great promise. All sorts of decent, if not unique, life advice, but that's not why someone would pick up this book. On the actual topic, details are really short.

I don't know if the larger book has more. If it does, the condensation should have pulled in more details about technical trading and less about life in general. It also does not need so many stories about people who made it from rags to riches because they were "trend-traders", while not telling us much about what they really did.

It is an easy read, but I stopped reading about half-way through.

[Brett · Rating 2 out of 5]

Superficial view of the trend following concept. No discussion of actual models or examples.

[Prem Grover · Rating 2 out of 5]

Light on substance, heavy on vague tidbits of advice. Valuable to mention the value of diversification and position sizing.

[Russ · Rating 4 out of 5]

The book offers vignettes of various trend following traders. It is breezy and entertaining - perfect for the beach or a rainy summer day. You won't learn how to trade or how to build a trading system. but you may learn more about trading psychology and the attitudes necessary to be successful in stock trading.

[Franklin Aquino · Rating 4 out of 5]

An Inspiring for Unorthodox Traders

Mr. Covel does a wonderful job explaining the intuition behind a trend following approach. He expertly weaves in stories and anecdotes from successful trend followers to paint a picture of success for the reader.

[Elliott Olson · Rating 3 out of 5]

Too general. Overall, inspirational for those seeking better than average returns. Needed more information about the trading system specifics

[Alex Shrugged · Rating 4 out of 5]

It was enjoyable to listen and understand most of what I was being told about following the trend in any market and making money doing it. However, as much as I found it inspiring, the practical value of this book in terms of making me money is quite limited. I knew what the author was talking about. There needs to be an inner drive that pushes one to seek out the best way to do things. I have felt that inner drive in many things, but not in financial things. That is why this book has limited value for me. Nevertheless, I really did enjoy the ride.

I might listen to this audiobook again. The narration was terrific.

[Frederic Bontemps · Rating 5 out of 5]

This short book offers some titbits on trading and the trader's mindset. Emotions are the enemy of the successful trader. If you have a probability of losing it all on a trade, you will not succeed longterm.

My takeaway is the basic advice of following a system and quantifying your results monthly and/or yearly based on prices alone. The best way to come up with and execute a trading system is study the some of the successful traders mentioned. The enemy of successful trading is seeking "perfection" in every trade or trading too often by not letting your winners run.

[yuching · Rating 4 out of 5]

1.閱讀這本書的目的
.從金融怪傑這本書中，了解到Ed Seykota, 然後發現他用的是趨勢跟蹤交易策略。而這本書的作者，一系列作品也是提倡Trend following。
所以想透過此書，更加了解Trend following
.想要從專家的經驗中，吸取Trend following 精華
.想要用Trend following來進行股票交易

2.閱讀後的收穫與感受
. 沒有最佳系統，只有最適合系統。一個好的交易系統，要能夠不受時間與市場影響。
. 好的Trend following 系統可以忍受少數年度大虧損，但是整體來看收益還是大幅增加。
. Trend following系統沒那麼容易建立，但一旦建立後，要堅持到底。不能因為有虧損而放棄不用。
. 無須預測未來，活在當下，專注於當前發展，根據當下而做反應
. 止損很重要
. Trend following 系統是機械式系統交易，所以可以避免情緒造成的交易影響
. 每筆交易要承擔的風險應該都要一樣
3.閱讀後會採取什麼行動
. 繼續研讀Trend following相關書籍
. 用XQ找出自己的交易系統
. 在用XQ 發展自己交易策略時，都會先回測勝率。不再盲目買股。


4. 3 個月後有什麼改變
. 可以更加掌握Trend following 精神
. 用交易系統來操作股市
. 提升股票的獲利 與降低虧損

[Jeremiah Dunham · Rating 2 out of 5]

I kind of hated this book. The author's overtly contrarian style really annoyed me. The book was a collection of stories about successful trend following traders and there was almost no practical information about trend following strategies or tools. All that said, I gave it 2 stars because the general idea of trend following and some of the descriptions therein were new to me and motivated me to explore it further.

[Abhishek Solanki · Rating 2 out of 5]

The book is more a character portrait of successful trend traders than a primer on how to actually go about building a trend trading strategy. Good for a lazy afternoon read but not really helpful if you're trying to get started in the field. Basic concept repeated throughout the book - money management (don't bet the house on a trade), exiting when a strategy tells you to (follow an algorithm rather than emotion). That's it.

[Helen Mary · Rating 5 out of 5]

A refreshing read. Covel has a way with words which makes even the seemingly dry and mechanical world of trading bustle with life. It’s not the one with the charts. If you’re after a reference with charts, this is not the trading book to pick from your shelf. But it would be similar to positive mind setting that Joe Ross is also known for.

[Kenny Gunawan · Rating 3 out of 5]

A great book for those who want to get to know trend following ways of trading. But, there’s not much of technical methods taught here, only interviews between the author and people who find their success from this trading method.

[D.H. Lim · Rating 4 out of 5]

First book read that introduces to Trend Trading. Good food for thought counter to the traditional buy and hold strategy which requires a long horizon of 30/40 years without knowing where the market will be when you are too frail to work.

[Oscar Dent · Rating 3 out of 5]

This needs to be read in tandem with (or better, after) the turtles book, or Trend Following. This is a solid read, but it is mostly fairly anecdotal evidence. You definitely need to have done wider reading to really appreciate this; but even then it doesn't add too much.

[Williamprasetyo · Rating 4 out of 5]

Its quite good , But too much story in it

[Henry · Rating 3 out of 5]

"Schools teach you have to follow systems. You need to figure out what system is for you"

[Faisal · Rating 3 out of 5]

An interesting pitch about catching the market trend instead of trying to forecast market direction through fundamental analysis.

[D · Rating 1 out of 5]

Vapid sport metaphors and platitudes. No examples of systems, just lots of "hype it up-buy my other book" kinda of advice.

[dpc727 · Rating 3 out of 5]

filler

seemed like lot of filler. it was interesting though. it certainly covered many heretofore unknown names. did i mention it seemed to have filler material?

[Ben · Rating 3 out of 5]

Trend trading over several years. Much of it is inspirational, telling stories of successful traders.

Makes me want to look into trend trading, though look further if you want practical advice.

[Systemchalk · Rating 1 out of 5]

This book is self aggrandizing nonsense. If you want a text equivalent of motivational speaking, this is for you. If you want information look anywhere else but in these pages.