Trend Following by Michael Covel

Book Summary

Michael Covel’s Trend Following rejects the myth of market forecasting, arguing that success comes from reacting to price momentum rather than predicting the future. It provides a data-driven blueprint for building disciplined systems that thrive on market volatility and "black swan" events.

Key Concepts:
Reaction over Prediction: Ignoring "why" a stock moves and focusing entirely on "what" the price is doing right now.
Systematic Discipline: Replacing ego and intuition with rigid, rules-based entry and exit strategies.
Thriving in Chaos: Designing frameworks that stay rational and profitable during market crashes when others panic.

Why It’s a Must-Read:
It is essential because it dismantles the "expert" culture of Wall Street and replaces it with mathematical reality. It teaches you how to stop being a victim of market uncertainty and start using that same uncertainty as your greatest source of profit.