Michael W. Covel - Trend Commandments: Trading for Exceptional Returns

Fire up the barbecue. Michael Covel skewers the sacred cows of Wall Street with tasty bite-sized bits of the truth about what it really takes to succeed in trading and life. Wide-ranging, irreverent, revealing, eminently quotable, and right on the money.

Charles Faulkner, Market Wizard Trading Coach

A rapidly moving, non-technical, and outside-the-box effort that smartly captures the essentials of trend following.

Peter Borish, Chairman and CEO, Computer Trading Corp

Covels Trend Commandments offers a breezy rumination on what is right about trend following and what is wrong about conventional trading approaches.

Jack Schwager, Author of Market Wizards and Schwager on Futures series

Michael Covels Trend Commandments is full of practical wisdom in bite-size portions on the benefits of trend tradingwritten in a straightforward storytelling format. Its definitely one to add to your financial bookshelf.

David Stendahl, Signal Financial Group

Michael Covel is the very best at explaining the concepts of successful trend following in plain English. Im certain youll be a successful trader if you follow the ideas he outlines in Trend Commandments. This book (and his previous two!) are required reading for new employees in my office.

Steve Sjuggerud, DailyWealth

An outstanding book for anyone who wants to become rich by trading markets. Today, government regulations and fiscal and monetary policies are badly distorting financial markets. Covel accurately explains why, in this manipulated financial environment, you should never expect markets to move as you wish or expect. Rather, disregard your fundamental beliefs and simply follow the trend. Highly recommended!

Marc Faber, Managing Director, Marc Faber Ltd., and Editor, Gloom Boom & Doom Report

Investors have experienced two bear markets in the last decade. This has led to rising volatility, uncertainty, and investor angst. For some it has been a lost decade, but for trend traders it has been a decade of opportunity. Trend Commandments helps you focus on what matters most: the trend of the markets, whether up or down. You can profit from either. Trend Commandments is essential reading for those who have the desire to thrive and survive in an era of fast-paced trending markets.

Jim Puplava, CEO, Chief Investment Strategist, PFS Group

Buy and hold has been a difficult investment system for investors for a decade. In Trend Commandments, Covel challenges readers to think differently and question their beliefs about market truths ingrained in them for years. Forewarned, you just may never see the world the same way again.

Mebane Faber, Cambria Investment Management

If you are even thinking of a career in trading, put down all the other books. Buy this one. Read it. Now you can start your career.

James Altucher, Managing Director, Formula Capital

Trading for Exceptional Returns

Michael W. Covel

Vice President, Publisher: Tim Moore
Associate Publisher and Director of Marketing: Amy Neidlinger
Executive Editor: Jim Boyd
Editorial Assistant: Pamela Boland
Development Editor: Russ Hall
Senior Marketing Manager: Julie Phifer
Assistant Marketing Manager: Megan Colvin
Cover Designer: Chuti Prasertsith
Cover Design Idea: Michelle Sanks
Managing Editor: Kristy Hart
Project Editor: Betsy Harris
Copy Editor: Geneil Breeze
Proofreader: Sarah Kearns
Senior Indexer: Cheryl Lenser
Interior Designer: Gloria Schurick
Senior Compositor: Gloria Schurick
Manufacturing Buyer: Dan Uhrig

2011 by Michael W. Covel
Published by Pearson Education, Inc.
Publishing as FT Press
Upper Saddle River, New Jersey 07458

This book is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services or advice by publishing this book. Each individual situation is unique. Thus, if legal or financial advice or other expert assistance is required in a specific situation, the services of a competent professional should be sought to ensure that the situation has been evaluated carefully and appropriately. The author and the publisher disclaim any liability, loss, or risk resulting directly or indirectly, from the use or application of any of the contents of this book.

FT Press offers excellent discounts on this book when ordered in quantity for bulk purchases or special sales. For more information, please contact U.S. Corporate and Government Sales, 1-800-382-3419, .

Company and product names mentioned herein are the trademarks or registered trademarks of their respective owners.

All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher.

Printed in the United States of America

First Printing June 2011

ISBN-10: 0-13-269524-3
ISBN-13: 978-0-13-269524-4

Pearson Education LTD.
Pearson Education Australia PTY, Limited.
Pearson Education Singapore, Pte. Ltd.
Pearson Education North Asia, Ltd.
Pearson Education Canada, Ltd.
Pearson Educatin de Mexico, S.A. de C.V.
Pearson EducationJapan
Pearson Education Malaysia, Pte. Ltd.

Library of Congress Cataloging-in-Publication Data

Covel, Michael.
Trend commandments : trading for exceptional returns / Michael W. Covel. 1st ed.
p. cm.
Includes bibliographical references.
ISBN 978-0-13-269524-4 (hardcover : alk. paper)
1. Investments. 2. Stocks. I. Title.
HG4521.C818 2012
332.6322dc22
2011011412

To breakfast at Tiffanys...

This is your last chance.
After this, there is no
turning back. You take the
blue pillthe story ends,
you wake up in your
bed and believe whatever
you want to believe.
You take the red pill
you stay in Wonderland
and I show you how deep
the rabbit hole goes.

A very special thank you goes to Michelle Sanks, my editor and researcher in chief.

Also: Salem Abraham, James Altucher, Karla Anselmo, Greg Avallon, Arlana Aylward, Bryan Aylward, Bryan Bangerter, Aisha Barber, Jesse Barkasy, Steve Beamer, Marty Bergin, Peter Borish, Danielle Bourbeau, Tim Bourquin, Jim Boyd, Jason Burack, Gibbons Burke, Steve Burns, Sandy Brasher, Kevin Bruce, Jim Byers, Chuck Cain, Kavita Channe, Michael Clarke, CME, Jerome Covel, Johanna Covel, Mary Covel, Eric Crittenden, Luke David, Gary Davis, Rebecca Clear Dean, Gary DeMoss, Nikesh Desai, Bernard Drury, David Druz, Bill Dunn, Guy Edrington, Robin Eggar, Martin Ehrlich, David Eifrig, Billy Emerson, Alistair Evans, Mebane Faber, Charles Faulkner, Jack Forrest, Black Francis, Debbie Gallaher, Kevin Gallaher, William Gallwas, Danuza Gartner, Jason Gerlach, Marcus Gersbach, Michael Gibbons, Mark Gjormand, Dave Goodboy, Norman Hallett, David Harding, Esmond Harmsworth, Betsy Harris, Rika Heidemann, Betty Henon, Paul Henon, Larry Hite, Dalice Huffman, Ed Holiday, Brian Hurley, John Hurley, Patrick Hurley, Virginia Hurley, Withers Hurley, Brian Hunt, Bucky Isaacson, Marshall Jake Jacobs, Ajay Jani, Bobby Johns, JonPaul Jonkheer, Perry Jonkheer, Shaun Jordan, Chris Kacher, Joseph Kavaliauskas, Sylvester Kavaliauskas, Ken at Breakout Stocks, Jordan Kimmel, Martin Klitzner, Jeff Kopiwoda, David Kreinces, Krystal, Katrina Kurdy, Eric Laing, Kimberly Laube, Jeffrey Lay, Charles LeBeau, Jez Liberty, Lindsay LoBello, Sandy Lynn, Jeff Macke, Alex Mann, Erin Marie, Michael Martin, Paloma Martinez, Luci Mattinen, Brian McHugh, Mark Melin, Juan Carlos Mendoza, Todd Miller, Gareth Moore, Gil Morales, Jerry Mullins, Paul Mulvaney, Jered Murphy, Victor Niederhoffer, David Nott, Tom OConnell, Matthew Osborne, Michelle Pelle, Julie Phifer, Tim Pickering, Jim Preston, Nancy Preston, Jim Puplava, Barry Ritholtz, Lloyd Ritter, Baron Robertson, Cullen Roche, Jim Rohrbach, Ian Rummer, Marlene Sanchez, Michelle Sanks, Barbara Schmidt-Bailey, Steve Segar, Ed Seykota, Greg Shaughnessy, Mike Shell, Marsha Shepard, Steve Sjuggerud, Richard Slaughter, Nell Sloane, Alex Spiroglou, David Stendahl, Clint Stevens, Matthew Stich, Susan Stich, Celia Straus, Leodalys Suarez, Jon Sundt, Timothy Sykes, Larry Tentarelli, Irve Towers, Dennis Tran, Francisco Vaca, Justin Vandergrift, Robyn Vandergrift, Trish Vianna, Damon Vickers, Danny Walsh, Matt Waz, Bryan Werlemann, Paul Wigdor, Addison Wiggin, Cole Wilcox, Bryce Woodall, Luciana Antonello Xavier, Daniele Yeonas, Monica Yeonas, Thai Yin, Jack Zaner, zerohedge.com.