Trading Book Reviews

Book Review: Trend Commandments

An intense look at the psychology and mentality of the trend following approach to trading

[easyazon-link asin=”0132695243″][/easyazon-link]I’ll admit to not being 100% sure how to describe [easyazon-link asin=”0132695243″]Trend Commandments[/easyazon-link] by Michael Covel. I’ll give it my best shot, though.

First of all, I’ll say it’s a pretty fast, easy read. The book is structured in a kind of series of articles or essays fashion. There are lots of them, and each “chapter” is only a couple pages. I read them straight through from front to back, but I see no reason why they couldn’t be read out of order if desired. The page count is about 240 in the print version I have, but it reads much more quickly than that because of its structure.

Like Covel’s earlier book, Trend Following, this is an unabashed endorsement of the trend trading approach. I’ve described that former book as being like a philosophy text which includes the discussion of the subject matter by numerous practitioners. Trend Commandments is also very philosophy oriented, though focuses pretty exclusively on the author’s own views on the subject, views informed by years interacting with the sorts of practitioners featured in the first book.

This is not a practical manual.

That needs to be made very clear. Covel does not describe trend following systems. You won’t find advice on indicators or methods for identifying trends. He does speak on the subjects of risk management, as well as market diversification. In the latter case there is a specific listing of markets that could/should be included in a trend trading strategy. The risk discussion is only really in terms of generalities.

So the bottom line is that if you’re looking for a book that lays out one or more trading systems you’ll want to look elsewhere. This book won’t fulfill that requirement (Covel’s The Complete Turtle is better in that regard, but I’d actually recommend Way of the Turtle as a more practical trend trading manual). If, however, you’d like to understand the mentality which underlies the trend following approach to trading, this is definitely a book worth reading (I’m planning on doing some future blog posts related to ideas brought up in the book). Just be prepared for a very unapologetic criticism of other approaches and mindsets found in the markets and media.

By the way, the “commandments” only really come in at the very end of the book in the form of a long (definitely not just ten) list of quotes from noted traders.

Make sure to check out all my trading book reviews.

By John

Author of The Essentials of Trading

Leave a Reply

Your email address will not be published. Required fields are marked *