The Trend Following Bible: How Professional Traders Compound Wealth and Manage Risk

After few nice read on my beloved football stuff, it is time to get serious again. In fact, it is the best way to kick off year 2015... provided this is a nice book!

At the end... it is a nice book. Relatively... Compares to Michael Covel with his Trend Following, Andrew Abraham may be the better author as he wrote this book with his professional trading experiences for 18 years in commodity. Put it this way... if Michael Covel's book focuses more on theory, Andrew Abraham presents this book with tons of practical part plus excellent examples.

I personally like the early part in this book where the author presents profiles of successful traders with evidence to support his "bible". In fact, along the book, the author repeats tons of psychology tips to ensure readers are ready with proper mindset. This is important to help traders instill strong mentality in dealing with trend following. After all, it is worth repeating as that stuff are useful regardless to newbie, intermediate or old and bold traders.

The only flaw is... there is a contradiction when the author tried to apply filters in bypassing certain trade opportunities. In my humble opinion, trend following is built up by tons of continuous small losses with a big chunk of huge profit to cover it. As such, every single opportunity is so precious that there is no way a trend follower can afford to miss out. As pointed by the author in the latter part of the book: "The last trade has no bearing on the upcoming trade. Every trade is 50/50 and statistically independent. You must take every trade - you cannot pick and choose because you do not know the future!" Ok... if that is the case, why apply filter and choose certain criteria not to trade? In my humble opinion, a cautious money management is good enough to solve the said problem!

Rating wise, this is definitely a nice book to read on. As such, I am rating it at 9/10 due to the small confusion as mentioned above. In fact, I highly recommend this book to newbie, as it is not so "theoretical" compares to Covel's "Trend Following".  It will be nice to read this book follow by Covel's other books. By then, readers may appreciate more on Covel's hard work in presenting his idea.

Last but not least... I wish to sum up this book with one of the best quote in the book:

After experiencing a loss or bad week, too many traders give up and start looking for or start trading a different strategy. And while the trading strategy they just abandoned is recovering from the drawdown, the new trading strategy may result in yet more losses, so again, they start looking for another. It becomes a vicious cycle.