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Alchemy of Self | 1' - 10' Deep Dives

3' - Trend Following

10 Dec 2024

Description

This book, Trend Following, by Michael Covel, is a trading strategy that capitalizes on sustained market price movements. It profiles successful trend-following traders, highlighting their methods, philosophies, and experiences, including their substantial gains and significant drawdowns. The text emphasizes the importance of disciplined risk management, objective decision-making, and a deep understanding of market psychology. The author contrasts trend following with other investment approaches like fundamental analysis and buy-and-hold, arguing for its superiority in capturing large market movements. Finally, the book explores the statistical underpinnings of trend following and addresses common misconceptions about this trading style.

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