Pod Insights Michael Covel's Trend Following Ep. 1324: Strange Days with Michael Covel on Trend Following Radio About this episode Please enjoy my monologue Strange Days with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive. --- I’m MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I’m proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I’d like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can’t get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!
Transcript 0:00 Speaker 00 As always, some motivation, some inspiration, and perhaps today, a different way at looking at things. This is what excites me about life, and I like to share on this podcast. One from X that I reposted that I love. There are really only two ways to get outsized returns in almost any domain, including your personal life. Number one, bet early before anyone else notices or cares. Number two, get lucky. If you're always chasing what everyone else wants, you've already lost.
0:41 Speaker 00 And isn't this the cruel irony of something like X or any social media platform? We're all chasing breaking news. Breaking news isn't how you trade. It's not how you invest. But let me keep it at that for a moment. Bet early before anyone else notices or get lucky. Now, there's nothing wrong with getting lucky, but it's not exactly a system or a strategy that you can count on. Bet early before anyone else notices or cares. Now, that has a certain trend following ring to it. Because when you take a trend following position,
1:26 Speaker 00 you don't know what's going to happen. You can't predict a trend. You don't know how far the trade that you've just entered will go. You can't know. No one can know. Now, I've got another example here in a few minutes that builds on this, but I just want to stay at this point for a second. The betting early part is important, very important. But betting early doesn't guarantee a win. And that is tricky. That is hard for people to wrap their head around. Because we all want to think there's an explanation.
2:09 Speaker 00 We all want to think we can be smarter. We all want to think that if we just read one more post, we will have more information. Come on, this is just dopamine, all kinds of chemical rushes in our body. But it doesn't equate to useful information or knowledge. I mean, it might be useful in some abstract way. But if you're trying to trade, if you're trying to invest, or if you're just trying to have a great life, chasing your tail is no way to go. But that still doesn't obscure the fact that this guy is right. You gotta bet early, or you gotta get lucky. And I'm going to paraphrase from an American politician.
2:52 Speaker 00 I don't care if you disagree. If you disagree with what I just said, I don't care. Why should I care? I don't. Now, the people that understand what I just said, talking about getting it early or getting lucky, they get it, and they know why I don't care. But if you don't know, that's incumbent upon you to start your search, to start looking, to start trying to figure things out. How does the real world work? Here's a way to think about how the real world works from author James Clear. Quote, "You don't need all the answers right now.
3:35 Speaker 00 New paths will reveal themselves if you have the courage to get started." End quote. That sure sounds like trend following too. You don't have all the answers right now, but you still take a position. Or you still start. One of the worst things that anyone can do, one of the worst things that can happen to somebody. They have a great idea, and then they listen to their friends and family. They have this great idea. They don't yet execute, and they get feedback. And what do the friends and the family say? Well, they give their opinions. And since most people don't really take big risks in life,
4:19 Speaker 00 usually this feedback from the uninitiated is their perception of how, whatever your idea might be, will go wrong. And they don't have a fucking clue. And here's where it gets interesting. If you have the idea and you don't listen to all these people that are the naysayers that want to tell you it won't work, and you just try, and maybe it doesn't work initially, but you keep trying and you keep adjusting and you keep sticking with it. That's how it ends up working. So the idea that somebody can sit out there, hear your idea before you've even executed it, and give you useful feedback when they have no track record themselves of executing,
5:04 Speaker 00 you don't want to do that. I mean, I'm guilty of it too. I have my ways of gathering information.
5:12 Speaker 00 Sometimes I think I will get useful information from people and I get nothing.
5:17 Speaker 00 For whatever reason, maybe they can't deliver, they can't bring it to the table. Maybe it's a competitive situation, maybe there's envy involved, I don't know. But I love ideas and I love executing ideas. That's what makes me go. So if that's what makes you go, we're going to have a lot in common. Now, I mentioned an example coming up in a few minutes, just a few minutes ago. And it's this example.
5:43 Speaker 00 I posted, "For me, the greatness of the Market Wizards books are the trend followers, especially the first two books. They are the stars." Now, for those of you that don't know, the Market Wizards books were written by author Jack Schwager. He's been on my podcast many times. The first two books, The Market Wizards and The New Market Wizards, are pretty much trading classics. And I've said it on this podcast, I'm lucky that Jack did not name these books trend following, because both of his first two books featured a significant number of trend following traders.
6:24 Speaker 00 Bruce Kovner, Michael Marcus, Ed Sokota, Larry Height, Bill Eckhart, Richard Dennis. Many would argue that George Soros, Paul Tudor Jones were trend following traders as well. And so I make that simple post on X, that the trend following traders in Jack's books are the stars. The ones that have taught us all so much over the years. And I'm lucky enough to have had the chance to get to know some of the people in those two books.
6:55 Speaker 00 And it's an amazing story, this small group of people, that everyone doesn't necessarily know they're trend following traders, even after all these years, and even after I've beat the drum for all these years, but this small group of traders, in these two fantastic books, are trend followers.
7:14 Speaker 00 A very specific form of trading. If you don't yet know what trend following is, don't worry. The example that I'm about to share will show you that a lot of people don't know what trend following is.
7:27 Speaker 00 So I made that post, and I get a reply from somebody. One of those people, I will affectionately call the reply guys. He says, "Most people will agree that trend following is sensible, but they will then struggle to define the trend." Exclamation point. Now, most people will not agree that trend following is sensible. Most people don't know about trend following, so that is wrong right out of the gate. It's 2025. Most people have no idea what trend following trading is. But let's take him at his opinion, that most people think it's sensible. He then says, "But they will then struggle to define the trend." Now that ladies and gentlemen is word salad.
8:14 Speaker 00 They will struggle, what the hell does that mean? To define, what the hell does that mean? The trend. I don't know what that means either. So I replied, "If they lay it out like you, indeed, they will struggle." Now, of course, I'm out there giving some punches and some kicks to people that are saying things wrong, because social media is a stage. And if somebody replies to me, I don't reply to everybody, but if somebody replies to me, and I think it's a useful opportunity to educate, I will reply too, in the great game of social media chess.
8:53 Speaker 00 So after I say, you know, if they lay it out like you, indeed, they will struggle. He says, I don't even know what that means, but I'm not struggling.
9:02 Speaker 00 Can you just feel the passive aggressiveness oozing through his pores? I don't know anything about this guy. Hold on, let me click on his X. Okay, now I see. Stock market cycle, 17.6 year stock market cycle. Well, obviously he's into a world of bullshit. The 17.6 stock market year cycle nonsense, whatever. If you're sitting out there right now and you are throwing your money at the word cycle, I don't care who is telling you, I don't care where you're getting it from. If you think the word cycle is the way for you to profit, you have just fucked up. You've gone down the wrong path.
9:47 Speaker 00 You're in the wrong forest, you're with the wrong people, you don't know what the hell's going on, and you need to stop right now.
9:54 Speaker 00 Because when you see or hear the word cycle in the world of investments or the world of trading, you've gone the wrong path. It's over. Stop. Take your losses. Now I can hear some of you out there, you are warming up your Elliot Wave replies. And you're going to tell me about somebody that used Elliot Wave in the 70s or 80s or 90s. Look, it's 2025. Trend following one, there is no cycle analysis. No one's betting off that. No one is putting their money at risk on cycles. Not happening. You know, a lot of people are masochist.
10:38 Speaker 00 A lot of people like to hurt themselves. I'm not into that. If you're into that, that's great. Just steer clear of me. I don't want to hear about it. Now again, I don't know that this is a bad guy. I mean, the word cycle promotion under his bio is not a good sign. But he's got a nice smiling picture here. So I replied, if one understands trend following, they don't quote, struggle to define the trend, end quote. And I told him again, that's word salad.
11:09 Speaker 00 Just quoting back to him what he said. Because if you understand trend following, you're not defining a trend. If you understand trend following, you're taking a position. You probably got a 30 to 40% chance that it's going to end up being a winner. A 30 to 40% chance that that particular entry that you take will actually amount to something. So you're not defining a damn trend. So if someone starts talking to you about defining a trend, turn off, tune out. They're probably going to promote cycle analysis.
11:46 Speaker 00 Whatever the fuck that means, who cares? It's just one of those words that you should have on filter. If you're in the investment world, the trading world, and you hear the word cycle. Where's your fucking wallet? Is it still in your pocket? Now, before you think for one second that I don't have the proof, I don't have the receipts to back my words. There's eight books, ladies and gentlemen. This podcast has no shortage of legendary trend following traders. And if you want some white papers, trendfollowing.com/resources. White papers that will keep you busy for quite a while.
12:33 Speaker 00 So isn't this the great opportunity of social media, though? If you are somebody that wants to go out there and you want to teach, you want to share, you want to educate. You want to give some insight you think you have. Well, somebody gets to come along and add their voice. They can say something useful, or they can say something moronic. And then we get to decide how much do we participate? How much time do we give it? Now, I can only recommend you give it only so much time because eventually you'll get a headache. And that gets back to the whole point of, I don't care.
13:11 Speaker 00 You have a problem? You have a mental disease? You're not feeling good? Someone stressed you out? I don't care. You have some other problem? Some other concern? Something happened to your family a thousand years ago supposedly? I don't care.
13:29 Speaker 00 I don't care about any of it.
13:32 Speaker 00 And the people that want you to care? Are the kinds of people that are trying to knock you off from doing good work. They're trying to stop you from moving ahead in your life. You cannot give them your time of day.
13:50 Speaker 00 Now, sometimes I know I get a little intense on these podcasts and you might think, what kind of guy is that in person? Well, I can tell you today that I walked up and down the second day of Chinese Lunar New Year. I walked up and down a hundred flights of stairs today.
14:07 Speaker 00 It was a little uncomfortable. The most I've done in a long time. But it is relaxing. It's invigorating. It is my meditation.
14:20 Speaker 00 I mean, I have other forms of exercise meditation. And look, this podcast is a form of meditation. I share something, I give a perspective, I call something out. But it doesn't stick in me. It doesn't stick to me. I don't give a shit. I don't care, again. If you have some drama, if you have some concern? I don't care. The people that I enjoy? Are the people that I hear about? Starting something new? Building something new? Whether it's a business? A family? Those people are exciting. Those people are invigorating to me, those people are motivating. Not the reply, guys.
15:05 Speaker 00 But we need the Reply Guys because the Reply Guys give us the opportunity, like I said, to teach. I have one more share today. It is from the film director, James Cameron. And it's titled "Strange Days."
15:22 Speaker 00 It goes something like this. It's brief, less than a page. Stick with me.
15:27 Speaker 00 You will see how, even if you're not interested in Jim Cameron, a film director, even if you're not interested in a screenplay, you'll see, this is universal. This comes around to all of us, regardless of your endeavor. "At the beginning of any writing project is the agonizing period in which nebulous ideas dance before the mind's eye, like memories of a dream, and vaporous vague shapes take on human form and begin to answer to their names. Trying to will a world into existence. I circle around it, nibbling at the edges, writing notes about the social infrastructure, and expounding to no one in particular about the themes of the thing. And slowly, a change happens.
16:11 Speaker 00 Without warning, it becomes easier to write a scene than to write notes about the scene. I start sticking words in the mouths of characters who are still mannequins, forcing them to move and to walk. Slowly, their movements become more human.
16:26 Speaker 00 The curve inflects upward, the pace increases, the characters begin to say things in their own words. By the end of this period, I'm writing 10 pages a day. The last day becomes endless, often stretching around the clock to the following noon. The curve becomes almost vertical as the thing seems to come alive. I become a witness only, a court reporter, getting it down as fast as I can."
16:52 Speaker 00 Now, what that really applies to, in my humble opinion, is learning.
16:57 Speaker 00 The sheer act of learning. That once you get past the definitions. Once you get past the basics. And it's in your blood. It's second nature. And once in second nature, it talks to you. Your inner voice, that inner voice is on your shoulder, talking to you. Saying, keep going. Saying, don't you see it? Saying, never stop. Saying, go on. And that inner voice, unlike the friends and family that I mentioned earlier. That inner voice is tough. That inner voice is strong. That inner voice is an ass kicker.
17:41 Speaker 00 And that inner voice will ass kick the F out of anybody who tries to stop you. So you see, when James Cameron is writing about script development. It's not really about script development. I mean, it is for him, but his words are something that are applicable to all of us. Take out script development and insert whatever into what he just wrote. And it's for all of us. We are in a fantastic time right now. A fantastic time where you must have the foundation. And that's what I'm ultimately talking about today. You gotta have the foundation. And if you have the foundation. You're not too worked up by the fact.
18:26 Speaker 00 That something like OpenAI comes out and a Sam Altman comes out. And supposedly owns everything in the AI space. And then in the snap of the fingers. Out comes the Chinese DeepSeek. And a couple of days later. Alibaba releases another AI that's supposedly better than both of those. Now, you could not prepare for any of that. All you can do is be ready to follow along, make decisions and ride waves.
19:02 Speaker 00 But you gotta have that foundation, right? The foundation is what I'm getting at today. The foundation is the script development. The foundation is the idea that you can either be lucky or you can get in early.
19:14 Speaker 00 But you need a set of rules to do this, whether it's for trading, investing, or just life. You need an approach.
19:22 Speaker 00 So when the world of AI unfolds like it has in the last week, you're not worked up. You just say, ah, interesting. No one knows what the fuck is going on. But you've got to know what you're gonna do. You've got to know who you are. And if you know what you're gonna do, regardless of what happens, and if you know who you are, regardless of what happens, you're okay. Now, if you don't know, if you're just blowing in the wind, and I hate this term, if you're just an NPC, look it up if you don't know what an NPC is. You should know by now. Essentially, it's a form of a lemming.
20:05 Speaker 00 You know, those rats that jump off the cliff and die into the ocean. I hope I've said something today, though, that gives you some inspiration to go dig or gives you an understanding, a new perspective. Maybe I'm just a meditation back to you. You know, I mentioned that I have my forms of meditation. Maybe if you hear my words, they offer some solace, some meditation back in the sense that you can say, hey, I'm not the only one that thinks this way. There's other people that think this way. And guess what? I only became this way because I exposed myself to the best.
20:47 Speaker 00 I exposed myself to mentors. I found them. I went after them. Because I knew in my twenties, I had to get somewhere.
20:58 Speaker 00 I was on a race. I had to find the insights, the wisdom, the information, the knowledge. And the only way I could get that was to go to those people.
21:09 Speaker 00 Now, some of this started pre-internet. It's a little harder today. But there's no shortage of ways to go find out how things work. And then, once you know how things work, like I've said, it's up to you. It's up to you to punch a hole in the wall. It's up to you to kick the door down. If you don't want to do that, you can take a government job and you can sharpen pencils for the rest of your life. But you're not going to be friends with people like me. I mean, you've really got to think about that. If you've got yourself a position in life right now where you're sharpening pencils, meaning you're not doing shit, and you found out a way to get paid for not doing shit, it doesn't end well. Get out of that.
21:54 Speaker 00 Try something new. I'll see you again next week.
22:03 Speaker 00 I see a time when those awake will understand how to make money in up, down, and surprise markets. Whether new trader or experienced, college student or financial advisor, protecting against a crash, or just trying to make a lot of money, trend following offers everyone an answer in uncertain times. To get started immediately, send me an email, [email protected] . I will send you the right trend following steps to take, along with my free video. But if you want to buy and hold, trust the government and trust Wall Street, this is absolutely not for you.
Previous Ep. 1323: Negative Error Culture with Michael Covel on Trend Following Radio Next Ep. 1325: The Worms Crawl with Michael Covel on Trend Following Radio Page updated November 7, 2026 · transcript and summary are machine-generated
