Pod Insights Michael Covel's Trend Following Ep. 1372: The Chart Fight to Start 2026 with Michael Covel on Trend Following Radio About this episode Please enjoy my monologue The Chart Fight to Start 2026 with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.
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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.
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Transcript 0:00 Speaker 00 So I wanted to start off 2026 with a little bit of a fight, an educational fight. To have an educational fight, you gotta say something to work up the angry folks, or the uninformed folks, or the people that are just a little bit nuts. Now, I'm gonna read some responses to a tweet that I made, a post on X. And some of these people are probably fine people. Some of them probably have an agenda. Some of them probably have no earthly idea what's going on. But I find most all of their responses are useful for me to fight back against, for you to hear how to do things the wrong way.
0:44 Speaker 00 Because if you hear how things are done the wrong way, that can help spark the right way. So what did I say? Two-parter, because I clarified. I said, "If you are trading as a trend follower, using price exclusively for decision-making, what are charts for?" Question mark. I then added a clarification. "If you are trading as a trend follower, using price exclusively for decision-making, and are not discretionary, what are charts for?" The point being, first, you're a trend-following trader. You gotta know what that is. I'm amazed, in 2026,
1:26 Speaker 00 how many people have no earthly idea what trend-following is. Or how many people want to use the subject heading of trend-following to include some other bullshit that they think about the markets. Because, look, as a trend-following trader, you start the year off, or you start any day off, or any month off, and you're looking at a tracking portfolio of markets, and you're saying to yourself, "What's gonna happen?" Well, you don't know. So how do you make your decisions? You wait for a price move. That could be any price move. Let's say, Market A is at 100. It goes to 105. You enter. You don't know what's gonna happen next. But you've taken the momentum signal and now you are in.
2:10 Speaker 00 Now you have to keep this mindset across all markets. We're not in love with one market. Now you see, when I frame it this way, you can see where people get confused because I say, hey, all you need is data. You just need the price data. You wait for your momentum indicator and you get in. So I say, what are the charts for? And that's where it gets interesting, as I stated at the top. One reply, higher timeframe charts for decision. Trend and pivot support slash resistance. Then, lower timeframe charts for precision. Price reaction confirmation at support or shift in the balance of supply and demand
2:54 Speaker 00 to anticipate a breakout of new uptrend. Ladies and gentlemen, that is not trend following. That is what I affectionately call, and I'm going to say it many times today, word salad. If I wasn't being affectionate, I would call it fucking bullshit. Try to take that comment. Replay it if you need to. And code it. Code it into something concrete that you can repeat. You can't. And you're gonna see this with these replies. The chartist, the chart thinking is about art. It's about subjective. It's typically about one market. Being in love with one market,
3:36 Speaker 00 having your technical analysis of prediction of charts in front of you, and extrapolating out. Again, from the top, I said, if you're a trend following trader and you use price as a decision making cue, which is what trend followers do, then what are charts for? Well, there's my first reply, and I have no earthly idea what that meant. You don't know what it meant. And honestly, the person that wrote it has no idea what they meant. Now let me take a step back here. I'm not trying to be mean, or call anybody names, or pick on anybody in particular. I don't know any of the people that replied, but I'm gonna chase the truth, and I'm gonna be tough about it.
4:18 Speaker 00 And I replied to that individual, "Remember, I said trend following." He replied back, "Sorry if I misunderstood." Yeah, didn't understand what trend following was. Another individual said, "As a tool to tell what trading mode to be in." "To clarify point, oversimplified, trend slope best quickly assessed on log plot, will indicate if trend is sustainable equals S over 1 to 3 months, or is too steep to last. If S use STD stops, if greater than S tight stops, if greater than S parabolic tools." I replied, "Not trend following." And that was also more word salad bullshit. Another individual said, "I use charts for reassurance."
5:03 Speaker 00 I said, "So you don't follow a system?" "Yes, I do have a trend following system that helps me identify entries, exits, and risk. However, it's not perfect, and I make adjustments where needed." What kind of system is that? Is there a system for the adjustments? I seriously doubt so. This is, "I have a system, but if I'm feeling something right now, the system goes out the window," which equals no system. Another individual writes, "Not a trend follower, but to see the trend, you need price time series data. Charts are just visualization of price time series that is easily readable by humans.
5:45 Speaker 00 If we would be computers, array of floats would be better, but we are not." I replied, "That's not how trend following works." He replied, "Not sure what you mean by that. Do you mean there is some other way to measure trends than price time series data?" He's not talking about measuring trends, he's talking about predicting trends. And that's not what trend following is. Trend following is about taking your momentum indicator, getting in and not knowing what's going to happen next. You see the chart mindset, which has been built across X, Instagram, etc. The chart mindset is such that if you see a chart,
6:26 Speaker 00 you can then therefore predict what is going to happen next. That's not trend following, ladies and gentlemen. And you know what? There is no proof of this. Where are the long timeframe track records like Bill Dunn's, over 50 years, that shows chart reading success? They don't exist. Another person writes, "I'm a visual person. Graphs illustrate price and show you where your stop exits are all in one." I replied, "Why illustrate price? Why not just use price?" He replied, "Because it's easier for me to keep track of a whole lot of graphs than a spreadsheet full of numbers.
7:10 Speaker 00 Even if I have buying and selling signals in my spreadsheet that simply flag red or green whenever the price is right, it's still an illustrative point. It's just on a spreadsheet instead of on graphs. Graphs save me time but do not replace spreadsheets. Graphs give me the quick overview that I can usually trade off, but spreadsheets contain the truth. And if I'm questioning anything with my graphs, I go straight to my spreadsheet. I'm new to this but actively improving." Fair enough, but just skip the charts. Just check your price data once a day, once a week, and has your signal been hit? That's it. You don't need the other stuff. The other stuff, the charting, is just, you know, a form of mental masturbation.
7:55 Speaker 00 Another individual wrote, "Because I need visual representation for market-generated information." I replied, can you state that objectively? He replied, while numbers alone are sufficient for some, especially pit traders, I find it challenging to process long-term data without a visual aid. Charts provide a clear representation of past price movements, allowing me to more effectively analyze market information and identify trends. My original statement was, what he just described is not trend following. He wrote back, okay, I agree that charts are secondary in trend following as a swing trader or investor. I'd still rely on them to identify trends, entries and exits on long positions with risk involved.
8:40 Speaker 00 As a day trader, I tend to mix up the jargon of trend and price discovery and wouldn't be able to put on risk without some form of visuals. At the beginning, I said trend following, not day trading. And you don't identify trends when you take an entry. You simply take an entry because when you take an entry with trend following, you don't know if the damn market is going to continue to go your way. It might go the other way and you might get stopped out, wham-bam, thank you, man, just like that. So the idea that you take an entry and you've identified a trend based on a chart is absolute not valid. Where is the evidence? If there's evidence, share it with me. I can see Bill Dunn's evidence.
9:24 Speaker 00 I can see Ed Secoda's evidence. I can rattle off 20 trend following traders that have appeared in my podcast and see their evidence. Where's the chart reading evidence? Of course, I knew this was going to happen when I posted something about charting because it's like a cult. If you go against the chart-ing thinking, here they come. And you know what? Again, fine with me. It's great educational material. Now I replied to that last comment he said, I said, with all due respect, word salad. He replied kindly, simply, I wouldn't be able to trade without charts. I just don't understand your question or point, so I'll reread your book. Fair enough. Somebody else replied, to consider your strategy logic over time and market paradigms.
10:11 Speaker 00 I replied, what does that mean? He said, I would say, can one feel math? Question mark. Speed volatility of movements, log charts of trends, lack of diversification across broad market segments, et cetera, et cetera. Math is not just math. With enough experience, math becomes artful insights into broad market evolutions. I replied, word salad with an alarm flashing. But he did, for the first time, give some of that chart thinking. He used the word art. Trend following is about science. It's about science and data. It's about something that we can replicate over the past.
10:54 Speaker 00 We can test, we can measure. Art is subjective. I like art. I like being subjective with my taste of art. But when it comes to the markets, if you're new, if you're experienced, whatever, why do you want to be subjective? If the best on the planet, the greats, measure, count, use science in their thinking, wouldn't you get a little nervous if somebody says, I look at the markets in terms of art? Isn't that another way of saying, I look at the markets in terms of absolute bullshit? And I don't know what the fuck I'm talking about.
11:36 Speaker 00 But if I call it art, I can defend that because you can't criticize me because it's art. It's subjective, it's opinion. That's not what success looks like. Now, he replied to my word salad comment, plot out your market chart, hang it on the wall and stand back to look at it. If price is lower left to upper right and you were long and you are thinking, you are a great trader. That is no different than a chart that is upper left to lower right. And you're thinking you don't know what you're doing when you experience substandard or expected results. I don't know what the fuck that means. More word salad. Clear thinking. That's what you want. That was the whole premise when Ed Sikota started his trading tribe, especially his post online.
12:20 Speaker 00 Getting people to write words that are clear. Sentences that are clear. If you write sentences that sound like you're a crazy person, locked in a white room, in a straitjacket. Guess what? Your market strategies, your market performance are probably not going to be so damn good. Someone else said to my chart question. They make me feel like I know what I'm doing. I replied, how? No reply back. Somebody else replied, I'm not a trend follower, but I still would want to know where to put my stop loss. Yeah, no kidding. That's what trend followers do. Daily. And I replied, if using price, why does a chart help? He replied.
13:04 Speaker 00 Even as a hardcore trend follower, charts matter because stops live in space, not philosophy. You don't place a stop on the concept of trend. You place it below a swing low, above a breakout level, and outside recent volatility. That is visual. That is a chart. Volatility context. ATR numbers come from data. Sure. Oh my God, I can't even read all this stuff. Anyways, he concludes by saying, price only, no charts is like saying, I drive by speed alone. Mirrors are for amateurs. Where do people learn word salad? It doesn't even make any sense. Code this shit, motherfucker. Put it into code. Write it in a sentence that we can understand. Give it some math. We are dealing with numbers after all.
13:49 Speaker 00 And that's what I said to him. So you can't say all that with numbers? His reply. Ah, I understand. This exchange is not about truth. It is about defending your brand position. You're just trying to reduce trading to a slogan-sized box because slogans sell books. I wish you godspeed and many book sales, brother. I will go back to my charts. I replied, weak, because that's all I could think. I don't want to debate somebody that doesn't really have an open mind to look at what trend following even is. And he told me, I'm going back to my charts. Now imagine, that is the thinking. And you see these pictures sometimes on X or wherever.
14:33 Speaker 00 The guy's got 15 monitors on his desk. Not this guy. I don't know who the hell this guy is. But some guy's got 15 monitors on his desk. And there's these charts up. And somehow or another, he has this instinctive intuitive ability to look at all 15 monitors. And scan back and forth. With this tremendous ability to analyze the chart. As an artist, as a pilot in the dogfight. Like, who the fuck makes up this shit? Who makes up this stuff? Isn't there like a word salad for charting responses? If you challenge anybody to define this stuff, all you get is word salad. I gotta come up with something other than word salad, but that's hell it is. It's just a bunch of words that don't mean a damn thing.
15:19 Speaker 00 Now, I did finally have somebody come to my defense. The guy said, ha, ha, good point. No one can give a straight answer. And I replied, no one ever does. It's hocus pocus. And somebody else jumped in and said, I don't understand the question. If you're only using price for decision making. Would it follow that charts are literally the only thing you can use? It's just the price data graphed visually. I replied, no. Trading using price data is not about charts. Now let's take a step back again here. And try to make this clean and easy for the uninitiated. And I've used this example before. Imagine you're on the desert island. You have no freaking charts. Okay?
16:02 Speaker 00 All you have is the old time ticker tape. Let's say from the 30s. And with this old time ticker tape, you just get price data. Let's say you get a closing price for each market each day, and that's it. So you're on the desert island. You don't have news. You don't have information. You don't have screens. You don't have CNBC. You don't have anything. There's no charts. Unless you're drawing charts in the sand with, I don't know, snail shells. But let's assume that's not even an option. All you have is your ticker tape. And your price data, and that's it. And now you've got to make decisions about your portfolio choices, how much you're going to risk on each trade, when you're going to enter, when you're going to exit with
16:45 Speaker 00 a loss, and when you're going to exit with a gain. So even if you hate me for picking on your charting, even if you think I was picking on you by rereading your message and saying something nasty, and I apologize if it sounded nasty, I, again, don't have any bad feeling towards anybody, but when I see crazy town stuff, I call it out. So just go with me, you're on that desert island and all you have is the price data. Make it work. Be a trend following trader with just that. That gets at my original point. What are the charts needed for? Now let's extrapolate out two examples.
17:29 Speaker 00 This is what I've done across my books, my podcast for decades, because that was what excited me. Wow, look at all of this evidence, evidence that is proof of concept, not just Mike's opinion. Everything I've said here today is backed up by the books, the podcast, the evidence is in. If you're not aware of it, that's on you, not me. And the evidence is overwhelming for trend following using price data. And while I did not state it at the top, remember, there are two forms of technical analysis.
18:09 Speaker 00 Predictive technical analysis, which includes all of the technical analysis books with the squiggly line chart reading. And then there is the reactive technical analysis, which is trend following, which has proof? You already know, I just told you. Now I think the icing on the cake, the cherry on top response, and I give this guy credit for being funny with a hot girl, but he replied to my comment of chart reading as hocus pocus.
18:43 Speaker 00 He replied with an AI meme that he made and it featured one pain on the left and one pain on the right. And the pain on the left said, "Covel using 362436 exclusively. What are charts for?" He's basically laying out the measurements of a hot lady and mocking me and saying, "What are charts for?" And on the other side of the meme is a picture of Sydney Sweeney showing all of her goods. And he's got the caption there that says, "The chart." So he's basically mocking me and saying, "All I care about is the 362436, the numbers. I don't care about what the numbers look like." And he's making the point
19:25 Speaker 00 that here, the numbers are Sydney Sweeney. I get that. It's cute. It's funny. Sydney Sweeney is hot. But all it does is further make my point. Because if you have the numbers, where and how does that extrapolate out to the hot girl? Meaning, he's drawing some conclusion here that I'm only looking at the numbers. But he is looking at more than the numbers. He is taking the numbers and saying, "Mike, I can see the numbers that you see, but I also see this hot woman. And you don't see the hot woman, Mike." Ladies
20:09 Speaker 00 and gentlemen, I rest my case. That is predictive technical analysis. He can see anything he wants to see in the numbers. He can see a hot girl. He can see a dog. He can see the devil. He can see God. He could see a pile of shit. But he's just seeing it. It ain't real. It's just his imagination. It's his subjective imagination. His subjective interpretation. His reading of the charts and imagining what's gonna happen next because he can read the charts and see something that I don't see. And in this case, he says, "I don't see Sydney Sweeney." Sorry, man. I see Sydney Sweeney. She's hot. But Sydney Sweeney is not in the
20:54 Speaker 00 fucking numbers. The numbers are the fucking numbers. There is no Sydney Sweeney in the numbers. You're in La La Land. Now, I know he was just trying to be cute. Fair enough. But as I said at the top, this is all educational. This is a great way to teach, to break it apart. Now, I'm sure some people listening, maybe they don't get it. Maybe they really don't understand, and maybe they still don't understand. Because they've been indoctrinated with all these damn technical analysis books. And they think they're supposed to predict tomorrow. They think they're supposed to read the chart. And my challenge back is to write it all down and to measure yourself.
21:36 Speaker 00 Not on one market you happen to be staring at, but across a diversified portfolio. Across today, yesterday, last week, the last four weeks, the last six months, the last year, the last five years, the last 10 years, the last 50 years. Put some discipline on yourself. Put some discipline on yourself. And if you do that, if you can force yourself into that thinking, how much money did I just make you today? Seriously, how much money if you did not understand what I was saying today? And you still might not, but I'm sure plenty of people had their aha moment of, damn, I've got to measure myself.
22:20 Speaker 00 No more prediction, no more interpretation. And now I'm going to do it like the great traders have done it. How much money did I save you today? How much money did I make you today? Don't tell me $1,000. Don't tell me 10,000. Get it over seven figures over the course of a lifetime. If you did not know what I was talking about today and you were of the mindset of many of these people that responded on X, if that's where you were, and let's say you're a fine person, a nice guy, you just didn't get it and you wanted to push back on me, fair enough. Look, I'm not a mean guy. I might sound a little ornery, but I just made you bank.
23:03 Speaker 00 If you didn't get it, I just made you bank. Over the course of a lifetime, I just saved your ass. Now, are you going to admit it? I get plenty of nice emails all the time. Check out my website, trendfollowing.com/blog. I post the positive feedback. So, don't get me wrong. I know there are a lot of people out there that appreciate things that I do. I get the feedback. But I want to fight too. I want to fight against bad thinking. It's fun. And you can always find a convert in there somewhere. Somebody listening to me today will absolutely either save themselves a million bucks
23:45 Speaker 00 or make themselves a million bucks just by the thinking that I'm putting on the table today. Guaranteed 100%. See you again next week.
24:02 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, Trendfiling offers everyone an answer in uncertain times. To get started immediately, send me an email, [email protected] . I will send you the right Trendfiling steps to take along with my free video. But if you want to buy and hold, trust the government and trust Law Street. This is absolutely not for you.
Previous Ep. 1371: The Performance Perspective with Michael Covel on Trend Following Radio Next Ep. 1373: The White Lotus with Michael Covel on Trend Following Radio Page updated November 6, 2026 · transcript and summary are machine-generated
