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Bestselling author Michael Covel is the host of Trend Following Radio with 15+ million listens. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trading -- all passionately explored and debated. Guests include Nobel Prize winners: Robert Aumann, Angus Deaton, Daniel Kahneman, Oliver Hart, Harry Markowitz & Vernon Smith. More guests: Jack Canfield, Howard Marks, James Altucher, Dan Ariely, Jean-Philippe Bouchaud, Kathleen Eisenhardt, Marc Faber, Tim Ferriss, Jason Fried, Gerd Gigerenzer, Larry Hite, Sally Hogshead, Ryan Holiday, Jack Horner, Ewan Kirk, Steven Kotler, Michael Mauboussin, Tucker Max, Barry Ritholtz, Jim Rogers, Jack Schwager, Ed Seykota, Philip Tetlock & Walter Williams. 1200+ episodes.

Apr 14, 2013

My guest today is Charles Faulkner, an author, trader, and international expert on modeling the knowledge and performance of exceptional individuals. He was originally featured in "The New Market Wizards" by Jack Schwager. Faulkner has a new book coming out this fall called "Higher Level Trading: The Five Stages To Trading and Investor Mastery".

The topic is trading psychology.

In this episode of Trend Following Radio we discuss:

  • Human behavior and the investor's psyche
  • How Faulkner came to put together his newest book, and the qualitative differences between the five levels of experience, knowledge, and understanding
  • Developing the different levels of thinking that lead to expertise, and the correct path to take to developing these skills
  • Preparation, effort, "doing the work", and the right way to jump into investing
  • Some of the commonalities between those profiled in the "New Market Wizards" book
  • Ed Seykota's recent statements on day trading
  • Behavioral economics
  • The idea that the less you know about something the more convinced you are that it is true--and how a little knowledge can be a dangerous thing
  • "Perfection seekers", variation, and letting perfection slow you down
  • Outliers and the potential to make a change in your thinking
  • Efficient markets, Vernon Smith, and bubbles
  • Imagery, stories, prediction, and the skill of conceiving multiple scenarios
  • Reducing information, and vetting your inputs to find out what information is important and what isn't
  • Why we are most influenced by parts of our environment that we are unaware of

Jump in!


I’m MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I’m proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

To start? I’d like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here:

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