Trend Following
Michael W. Covel’s *Trend Following* demystifies a time-tested trading strategy anchored in the core mantra: “cut losses short, let profits run.” Unlike traditional buy-and-hold investing or speculative guesswork, trend tracking focuses exclusively on price action, tuning out noise like fundamental analysis or expert predictions. Covel brings the strategy to life through legendary traders—from David Harding’s $300B AHL fund to Bill Dunn’s 40-year track record of outperforming during crises like the 2008 financial meltdown. He breaks down critical distinctions: separating speculation from passive investment, exposing the flaws of mainstream mutual funds, and explaining how behavioral finance reveals why trend tracking exploits human cognitive biases. Backed by 800 years of historical data and academic research, the book proves trend tracking delivers consistent absolute returns, reduces portfolio volatility, and thrives in extreme market conditions. It’s a practical guide for traders seeking to overcome emotional decision-making and build a disciplined, profitable approach to the markets.