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The Little Book of Trading: Trend Following Strategy for Big Winnings by Michael W. Covel

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Introduction

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A Wake-up Call

BEN STEIN FAMOUSLY SAID, “IF YOU DIDN'T LOSE A LOT OF money during the Panic of 2008, you were probably doing something wrong.” I heard those words and wanted to scream. His view could not be any farther from the truth. People made fortunes in 2008 with solid moneymaking strategies. The winners were not doing anything wrong, they just happened to have had the vision to prepare for the unexpected and when the big surprises unfolded—they cleaned up.

Investors have been conditioned for decades to believe that they cannot beat the market. They've been told to buy index funds and mutual funds, listen to CNBC, and trust the government. I have news for you. That does not work. We have all seen one market crash after another for the last decade. But the powers that be keep telling us that the old investing ways are the only way. Deep in our gut we know it's not true. Even if we don't know who the winners are, there are winners in the market, especially in the middle of a crash.

I am going to introduce you to a way of thinking, to a way of making money that is entirely different from what you have been taught. It varies vastly from what you have heard from the brokerage firms, the media, and the government.

First of all, you can leave fundamental analysis at the door. A lot of people are taught that fundamental analysis—knowing a company's financial statement ...

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