Pod Insights Michael Covel's Trend Following Ep. 1387: Screw Your Brain on Tight with Michael Covel on Trend Following Radio About this episode Please enjoy my monologue Screw Your Brain on Tight 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.
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/
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Hope you enjoy my never-ending podcast conversation!
Transcript 0:00 Speaker 00 24 and 7, a significant number of perhaps, perhaps not, intelligent people are glued to the news, glued to X, attempting to front run whoever and whatever on the latest piece of war news. It sort of takes your breath away. People are this greedy and this fucking stupid that they think they're gonna get their home run. Now, just like with the lottery, somebody will win some lucky bet. And millions of other people will think I should be playing too,
0:44 Speaker 00 just like at the casinos and just like at the lotteries. I mean, we're living in this time where you can't say certain things. And the certain things are the truth that everyone knows. Everyone knows the truth, but you're not allowed to say it. That's an interesting place to be. At some point, that breaks. It ceases to work. Now, look, I'm gonna get into it in a second. From a trend following perspective, who cares? Just run your system and let shit happen. Well, that's true. But if we're at one of those moments in time where
1:29 Speaker 00 good men need to step up, good men need to lead, and good men need to speak the truth, what good is all the trading profits if civilization implodes? And clearly, when you have a situation where multiple countries in the West are supporting significant numbers of their population to do nothing, one group pays for another group to do nothing for reasons not defined, eventually that breaks. And eventually, those good men who are paying for those men to do nothing, that system breaks. There's a snap. And the good men just say, This is done.
2:14 Speaker 00 We're out of this. We're over. We're not playing anymore by this. We're not living in a world where you can't speak the truth. We're not believing the assorted social lies that have been set down over the last century. We're going to deal with the here and now, and we're going back to merit. Now, even if you get to that place, you can still have greed and fear, and you can still have bubbles. But we're headed to that kind of a place fast. Does it happen in my lifetime? I sure as fuck hope so. Because living in a world where you can't speak the truth, that's just not fun. It's shitty. I mean, right now, the world, from a market perspective, it's jerking back and forth.
2:59 Speaker 00 Up, down, up again, down again. Trump says something markets move. Israel responds markets move. Iran reacts markets move again. What do people do? They stare harder at the screen. They look at their indicators, they look at their candlesticks. They read more X posts. They lean in closer. They think if I can just understand one more variable, I'll finally get it right. That's the instinct. But it's a trap. I think, deep down, everyone knows it's a trap. But too many people play the lottery. And the lottery is also sports gambling. I mean, if all you do is watch sports and gamble, what kind of person are you?
3:43 Speaker 00 Well, you're the kind of person that makes up a market. Because the market is made up of rational players and irrational players. It's a zero-sum game. I always like to think about that. Because all of these people that are kind of dead weight in society, they make up a market too. If you're a trend-following trader, ultimately, if you're successful, you are winning their losses. Today, we're not really watching markets, news, whatever. We're watching uncertainty. And uncertainty does not care how smart you are. Volatility does not care how smart you are. Think about it this way.
4:25 Speaker 00 You cannot know enough to trade this war environment. You can't. Not because you're lazy, not because you're uninformed. It's structurally impossible. Think about the inputs. Political incentives, military strategy, backroom negotiations, intelligence leaks, media distortion, central bank reactions. Now, ask yourself this, Mr. and Mrs. Rocket Scientist. How the fuck do you model that? Do you think the guy on the TV can model that? Do you think the loudest voice on X with millions of followers can model that? Do you think anyone can model that consistently?
5:09 Speaker 00 And if you do, could you write that down for me? Could you explain it? I mean, people try. They always try. Humans don't like random. They want cause and effect, clean stories, a reason for every tick. How batshit crazy is that? How batshit crazy is it that any intelligent person wants a reason for every tick? For every hour or for every day? Yes. If someone drops a nuke tomorrow, that will be a momentous day in human history. But generally speaking, a significant part of the population thinks they can figure out every tick, every hour, every day. If the market drops, they say it's because of Trump.
5:53 Speaker 00 When it rises, it's because of diplomacy. When it drops again, it's because of escalation. Bullshit, bullshit, bullshit. Same inputs, different interpretations, constant confidence. This isn't analysis. This isn't trading. This isn't trend following. This is storytelling after the fact. And storytelling is useless for good trading. Now, what am I up against when I say that I'm up against the Wall Street industrial complex? They love the idea of a story. And it can work until it doesn't. And maybe we're facing that situation. Maybe this boomer population that has rode that wave up.
6:33 Speaker 00 All of a sudden in their seventies, they get fucking kneecapped. Would that not be the most interesting time period? The group that has benefited and believed the most in buy and hold. To be sitting there in their seventies and eighties with a 50% haircut. I'm not wishing that, but you're an idiot if you can't imagine that. That's the whole premise of any type of good strategy. Prepare for the worst. The stoic mindset. If you're not ready for the worst, if you're not preparing for the downside.
7:16 Speaker 00 If you don't have an exit, you're a masochist. Look, here's an uncomfortable truth. If you need to understand why before you act, you will always be late. Always. Because price moves first. Explanations come later. Trend following starts from that premise. Not as a theory, as a survival mechanism. Trend following says, I don't need to know why. I need to know what is happening. And more importantly, I need to know what I will do about it. That's the separation most people never make. They confuse information with action. Let's make it simple. You can watch 10 hours of geopolitical analysis, read every headline, memorize every expert opinion,
8:00 Speaker 00 and still have no fucking idea what to do when the market moves. Because the market knowing is not doing and markets reward doing. Trend following flips the equation. It says, price, movement, price, action is the input, not the opinions, not the forecasts, not the narratives, price. And this is where it gets a little hard for people. Because just following price has no investing quality to it. It's pure momentum. It's pure crowd psychology. It's an entirely different type of intelligence. It's saying, "I'm not going to waste time with this type of investing intelligence,
8:42 Speaker 00 fundamentals. I'm going to use my mind to look at the markets with a different form of intelligence that has arguably a much more solid foundation." Think about it this way: price reflects everything. Trump's statements, they're in the price. Missile launches, in the price. Sanctions, in the price. Rumors are in the price. Things you will never hear about, they're in the fucking price too. So why are you chasing explanations when the outcome is already visible? The outcome is the price right now. Well, because for people, humans, humans that want to be tucked into bed at night, and humans who imagine a government official kissing them on the lips, it feels better. It feels like somebody cares about me. Somebody's tucking me in. Markets don't
9:27 Speaker 00 give a shit about that. They don't reward feeling, they reward discipline. Let's talk about volatility, because that's what people really fear. Not loss, the movement, the unpredictability. They start crying, "Oh, the market's crazy. Oh, it's so crazy." No. The market is honest. Unlike some of those groups of people that keep me and you from saying certain things that we know to be true, the market, at least at this point in history, is still true. The market price is still true. Now, I'm sure there's some assholes out there that want to disguise the price. They want to abuse the price, hide the price, and maybe one day they will. And maybe one day, price will not be a thing.
10:08 Speaker 00 Maybe they will kill math. I can imagine anything, because there are some really sick, sick people at the top, right now, controlling and making decisions. And they've got significant parts of the population in a haze, in a propaganda haze. And this part of the population sits back and goes to themselves, "Well, I really don't know what's going on, but I should just trust those people on the TV, because those people on Fox News and CNN, they're in suits, and they're in front of a camera, and I should trust them." Can you imagine? Maybe some of you can't, because you do this. I mean, what's the old famous line between Reagan and Gorbachev? Trust, but verify.
10:53 Speaker 00 If you tell me there has to be a war, it'd be nice of you to offer some shred of truth. Given the history of America and wars since the 1960s, I've watched smart people that I've known for a long time seemingly not have the IQ to understand that. They are 100% trust. They could give a shit less about verify. Guess what? With trend following, you don't have to trust and verify the price. The price is the price. It's already trusted and it's already verified. So here I am, making a case about very rational, personal, political perspectives that I have,
11:37 Speaker 00 which I know in any debate, in any forum, I would win if not for a bad system. A bad system, I mean by the politics out there that wants to hide certain things. But again, you don't have to trust and verify price. It is what it is. I mean, back to volatility, it's not the enemy, it's the signal. No volatility, no price movement, there's no trend. Without trend, there's no opportunity. When people complain about whip saws, about noise, about sudden movements, about this, about that, about the latest strait of hormones, whatever. What they're really saying is, I don't have a framework that can handle uncertainty. They're saying, I don't know what the fuck to do with volatility. They're saying, I don't have any rules.
12:23 Speaker 00 They're saying, I just trust. I trust the powers that be for their political stances. I trust that the markets will reward me and I block out everything else. That is a perspective. That is a perspective you can take. I really can't argue with it. I don't want to talk to you that much if that's what you want to do. It's not really a thinking man's perspective, but I can appreciate it. I can understand it. Just don't open your mouth in public because you sound like an idiot. Let's be clear about this. Trent Folling does not promise profits today, or tomorrow, or next week. It promises something else, a way to operate when you don't know what's coming next.
13:07 Speaker 00 And right now, no one knows what's coming next. No one. How do you deal with that? How do you deal with, "I don't know what's coming next"? The future is opaque. Always has been, always will be. Here's the twist. You don't need clarity about the future. You need clarity about your behavior. Clarity about you. That's the edge, not prediction. Behavior. Your behavior. Not your prediction. Your behavior. Your response to the movement of price is your edge. Think about it this way. Timing requires precision. Precision requires knowledge. Knowledge requires certainty. And there's none of that.
13:51 Speaker 00 There's just people with different views, being driven by different things, making decisions in the great marketplace that there is. And all of that input, and all of the reasons why they make their buys and sells, embedded in the price at any given time. That is a valuable piece of inside information. The most valuable piece of inside information that you will ever hear in your life, unless you're some crooked motherfucker with actual inside information, and you're doing something illegal. But the greatest piece of inside information is that it is embedded in the price.
14:35 Speaker 00 Trent Folling doesn't try to enter at the perfect moment. It enters when the move is already going on. Sounds counterintuitive, it sounds late, it sounds inefficient. It's robust. You're not picking bottoms. You're not picking tops. You're not trying to get lucky on one market. Yes, I get it, there's gonna be some crypto guy out there who says he made a million bucks in one day. So what? It's not you. It's not real. Look, chaos does not last forever. It resolves. And when it resolves, when the volatility, the uncertainty, things change, trends emerge. How do you put yourself in the car, so to speak,
15:20 Speaker 00 as the trend is emerging? You need a system for that. You need a rule set for that. Something that you can follow. Again, I'm saying something a touch redundant in my life, but this was the brilliance of the Turtle Trader story. The brilliance of Bill Dunn. The brilliance of John Henry. The brilliance of Ed Secoda. Larry Height. David Harding. Martin Luke. The guys at Trend's Trend. You're not the first people. You're not the first person to hear about this. I'm not either. But I'm sharing it with you now. I'm giving you a perspective that you know you have not heard
16:01 Speaker 00 on CNBC, or Bloomberg, or Fox, or CNN, ever. Think about that. I'm not sitting here pretending to be the highest IQ in the world. Sure, I'm a wise enough guy, but you've never heard the types of issues that I'm putting into this episode right now. You've never heard these debated or talked about on any of the channels that I just mentioned. Ever. Never. And it won't ever happen. Because they need you to watch. They need you to be addicted. They need you stuck to them. Like flies on shit.
16:44 Speaker 00 You are the advertising money. You're nothing more than a drug mule. I get it. The world doesn't make sense right now. There are debates to be had in so many corners of economics and politics and the social sciences. None of it makes sense. I agree. But stop trying to make sense of it. Just trade it. Follow the price. Manage the risk. Let go of the need to know. Let me tell you another little secret. Your need to know, that's what's holding you back. The moment you release it, you don't gain certainty. You gain something better.
17:27 Speaker 00 And before I tell you what you gain that's something better, I just have that feeling. I can't play the music now because I used to, but I can't play the music now because of all the crazy copyright violations. Even if you just play a small snippet, you can't do it. But I've got that Ted Nugent song playing in my head, "Stranglehold," that great guitar riff. So when I tell you that you gained something better, you're listening to Ted Nugent play "Stranglehold" in the background. That's what's playing right now. Because the something better that you gain is a process, a system, a rule set.
18:06 Speaker 00 And in a world like right now, markets like right now, process, systems, rules will beat the narratives, the stories, the predictions, and all the other bullshit every freaking time. You've just got to ask yourself, do you want to be smart? Or do you not want to be smart? That is a choice. See you again next week.
18:37 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. 1386: Nelson Dellis Interview with Michael Covel on Trend Following Radio Next Ep. 1388: Ross Greene Interview with Michael Covel on Trend Following Radio Page updated November 6, 2026 · transcript and summary are machine-generated
