From a reader:
Dear Michael, I’m a keen listener of your podcasts and have both of your trading books. I wondered if youd come across the quote below and if you had any view or could offer any insight into the statement. I’ve assumed rightly or wrongly that Elder is steering the reader (beginner) away from the drawdowns associated with trend following, but Im merely guessing. The subject isn’t explored in the book. The statement has put me off trend following for the time being and was hoping you could enlighten me. For information, I am a beginner trader, mostly trading indices and stocks on a spread betting platform (so far without success!). I’m also not entirely sure what he means by a later stage of development: “A beginning trader is better off learning to catch short swings, while leaving long-term trend trading for a later stage of development (Ref. Dr. Alex Elders Come into my Trading Room).” Apologies for asking you direct, rather than Dr. Elder, but given your passion for trend following I thought I would ask your advice. It kind of raises the debate, Is trend following for beginners? The Turtle story seems to contradict this theory. Best regards, Tony
Yes, the Turtles do contradict that view. My view? I view it as one sentence by one man - who is not of the caliber of the traders I write about.
June 23rd, 2008 at 11:32 am
[...] Alexander Elder From a reader:. Dear Michael, I’ma keen listener of your podcasts and have both of your trading books. I wondered if youd come across the quote below and if you had any view or could offer any insight into the statement. … [...]
June 24th, 2008 at 5:46 pm
Tony,
The time to trend trade is now. The majority of the turtles were not seasoned trading veterans. In addition,if you are truly a beginning trader, you would be well advised to purchase the trading systems package from Michael. I purchased the course, and while not being new to trend trading, it was worth every penny just for the much needed focus I needed at the time. It has everything you’ll need to get started.
(Sorry for pitching your product in the blog Michael)
Tradechimp
June 28th, 2008 at 5:16 pm
As a trend follower, I certainly agree with Michael’s comments. However, there is a model for a progression from trading small swings to trading trends: Livermore. He started out as “the boy plunger”, day trading in bucket shops. He became a trend trader of the highest caliber. The Turtles found a way to eliminate the early, painful education that Livermore endured — certainly not something he recommends that his readers repeat.
By the way, I have kept Livermore’s first question, “Is it a bear or bull market?”, in mind lately when choosing trends to follow. It’s a great counterpoint to the ongoing, pointless argument over whether the US stock markets are in a bear market “yet”. What has been the trend? Bear!!! What’s the trade? Short!!!