Episode #534: Michael Melissinos – Mastering the Art of Trend-Following

Guests: Michael Melissinos is the founder of Melissinos Trading, an investment firm that employs a systematic trend-following approach.

Recorded: 5/15/2024  |  Run-Time: 40:04   

Summary: In today’s episode, Mike shares his journey into trend following and his approach to trading. He emphasizes the importance of removing biases and opinions when observing trends and executing trades. We get into the nuances of trend following, sticking to a trading system, and much more.

Sponsor: 10 East is a membership-based investment firm founded by Michael Leffell, former Deputy Executive Managing Member of Davidson Kempner, focused on providing targeted exposure to private markets. 

Comments or suggestions? Interested in sponsoring an episode? Email us Feedback@TheMebFaberShow.com

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Welcome back, everybody. We got a super fun trendy episode today.

Our guest is Mike Melissinos. Mike’s the founder of Melissinos Trading, an investing firm that employs a systematic trend following approach. Today, we’re going to do a deep dive into all things trend. Super excited.

Welcome to the show, Mike.


Thank you for having me. Pleasure to be here.


So listeners, this is going to be a really fun episode because you’re going to get somewhat of a unique origin story from a trend follower who has built their business, I want to say emerging trend follower, but anyone younger than not doing it since the eighties a call as more of the recent vintage, the younger crop.

But let’s start with your story. You were Bear Stearns. When did you get the trend following bug? When did you start to really learn about this concept and idea? And was it immediate? Were you just bitten overnight or was it a gradual inoculation?


I think it was gradual. I remember very vividly because this was a very intense period of my life.

Summer of 2007, I was in public accounting and we had just finished the busy season for auditing the hedge funds, and that was when things started to crumble a little bit as it happens.

I think I just randomly started reading about trend following. It was Mike Covel’s book from back then. I think it was the first edition.,

And I remember, and I told him on his podcast too years ago when I was on it, that I slammed it shut for the first time. I was like, “No, no, no. No way. It’s coming too easy to me. This can’t be right because all my preconceived notions about the markets, they’re hard. There’s this big complex problem to figure out, yada, yada, yada.” That started to plant a seed.

I ultimately opened the book back up, started to read more, started to go, “Uh-huh, okay, now this is making a little bit more sense. I didn’t understand why it’s difficult to do this.” And then at the same time, I’m itching to get out of accounting. I never really wanted to be in it to begin with.


Has anyone really been like, “You know what? I really, really… CPA is what I get hot and bothered about?”


I don’t know. I guess there’s got to be some people, but I’m not one of them.

So I called my friend, one of my best friends, who worked at Bear Stearns at the time, and I said, “Can you get me in there? I’ll do anything.” Just that story.

So I went on a couple interviews, landed it, and was off and running with my peon analyst job there. And we were a bridge between the analyst team and I worked on the healthcare and biotech stocks that they covered there. So it was a bridge between the analysts and the traders.

I started working at Bear Stearns in fall 2007. If you’re doing the math, it’s about six months before it ultimately went down in March.

So that was the big aha for me because you can read about all the past crisis moments where trend following does well and how it protects you and all these types of things, and it’s a different thing when you’re experiencing it in real time though. It’s much different. And then when you’re experiencing it inside the walls of the castle that’s crumbling. So that was a big moment for me.

And I stayed on at JPMorgan for a while, but then in the fall, several months after Bear, Lehman, and that was the other big aha because at this time I believe from the Bear collapse through Lehman.

And then through the end of the year, I was tracking monthly performance of guys like John Henry and other trend following funds. And then I think at some point I had had enough. I needed to get going on doing my own thing because I thought… I believe I understand what this takes, how to do it, and the good and bad of it all.

And then at that point, I was not skilled enough to build a system and I just started simply with good old-fashioned Microsoft Excel and just started testing some things. I probably waited too long, I missed some good markets, and then it ultimately pissed me off to the point where like, “Okay, that’s it. I’m done. No more waiting, let’s go.” So that was it January 1st, 2011. So that’s when I started.



And so let’s talk about that jump. It’s one thing to be an equity person and say, “All right, I’m going to start trading. I’m going to start researching companies and stocks,” because there’s a pretty low bridge or bar to jump over to get working. Even doing some sort of simulations. There’s a lot of prepackaged software programs like Portfolio123 or the… There’s a ton of literature about stock screens. How many dozens if not hundreds of books are there about stock screens?

But for a trend follower, you hit a soft spot because I did my early simulations and still do most in Excel that spoke to me. But how’d you make that initial jump?


Well, I don’t think I was that comfortable at all even the day I started. I had not traded a futures contract the day before I made the first trade for the fund.


How nervous were you?


Very nervous.

I knew the math and I knew I was taking the right position size and all those things, and I had the correct distance to my exits and all those things, but it was still nerve wracking because here we go, real money’s on the line now. We’re not in the Excel spreadsheet anymore.

One thing that helped me was calling and emailing a bunch of trend followers at the time, and one in particular who has since retired, David Druz who retired after 42 years. I still have my notes from that call.

But I called him thinking, “I’m an idiot. I don’t know anything. I probably can’t do this. I’m not that smart. I was a baseball player.” All these negative self thoughts. And he’s like, “Hold on, hold on. You don’t need to be that smart to do this. You need to be very tough. You need to be organized,” and things like that. You don’t need to be some mathematician.

So he really didn’t give me any, say, technical advice, but that really helped calm me down to hear it from a guy who…

For your listeners who probably don’t know him, he finished his career with 15.6 annualized returns net of fees and expenses after 42 years. That is just absurd. I’m sure you could point to someone maybe better, but a continuous track record for that long is just ridiculous.


Which is funny because when you hear so many people in the media that just aren’t that familiar with trend following, they always say, “Oh, yeah, but there’s no long-term track records.” And I’m like, “There’s nothing but long-term track records.” A lot of these guys have stuck around as opposed to many hedge funds, traditional equity hedge funds, that close up shop after a little while. I’m like, “There’s a ton of these old school dudes that have been around since the eighties and nineties.” That’s a long ass time to be trading in futures markets and not get taken out to the cemetery.


Yes. So it speaks to their dedication, who they are. They are trend followers at their core. It’s not just a business to them, it’s what they do. It’s how they think, how they view the world.

So I guess back to what made me more comfortable, it was really just spending a lot of time, a lot of time with the pencil and the pad and making sure the math was correct before I got going, but then you ultimately have to adapt to what your situation is.

Druz at the time I believe was trading a hundred million and Jerry Parker at the time trading a billion. John Henry, same, a billion. Done. So these were guys that were well-established and all that.

I knew I wasn’t going to be able to start like that with trading dozens and dozens of markets and multiple systems and all these complex rules and things. So I started with $300,000 so I could only trade 11 markets, and I just picked the very crude way of picking of a fixed portfolio was trade a couple of agriculture, trade with-


Started with letter A and just went down the alphabet?


Kind of. You break the futures markets up into their sector. So you got the currencies, the interest rates, the stock indexes, and the commodities. So just take a few from each, get equal exposure, do the best you can.

And I still remember I picked gold over silver and silver went nuts in spring of 2011. I was like, “[inaudible 00:08:42].” I got to stupid gold. It’s doing okay. But silver went bonkers then. I forget exactly what the percentage rally was, but it wasn’t anywhere near gold. But then silver crashed, which would’ve been fine, but on the short side, but gold took off a little bit later. So I felt, “Ah, okay, okay. At least, I got something out of that.”

All that started to get me thinking about, “Oh, yeah, I need to have more. I need to trade more. I need to observe everything. I can’t just pick 11. The statistics aren’t as strong when you just pick 11 versus say 50,” as you mentioned, 50 or a hundred, and now I trade over a hundred different markets.

But again, you have to get there as your situation evolves. So now the fund’s much bigger and it can handle a lot more markets and more systems and things.

So I think being comfortable really with what you can do. If you’re looking at everyone else thinking, “I’m not as big. I’m a nobody, I’m this, I’m that,” all that has nothing to do with your trading, has nothing to do with the decisions you can make, the best decisions you can make for yourself and your investors. So I really just tried to isolate, put the blinders on, and just do what I could do, and then over time, we adapted.


What do you think about actual implementation? Are there any broad descriptions when you tell someone who understands the trend following say, “Okay, well here’s the paintbrush?” I assume you don’t disclose the exact formulas, maybe you do, but how’s the sausage made?


Yeah. I don’t think the Xs and Os of the details are that important. One of my metaphors for trend following that I use to explain things is simply health and fitness. Everyone knows what to do, but how hard is it to do?

So I think when I tell people about what I do, we’re just trying to look for opportunities everywhere. I don’t want to be biased. I don’t want to be prejudiced against any markets, to any countries, to any areas, any direction because markets do go down as well.

So I’m removing these biases and I’m simply just sitting back with no dog in the fight and we’re observing trends, and when we see trends develop and, “Oh, how do you define a trend?” Like okay, we can get into all that, but it’s not that important. There are very basic ways to do it. Everyone’s probably heard of it anyway. That’s not the secret sauce. So it’s not really even worth giving too much time to talk about because it might elude that, “Oh, that is the most important part of it.” So we’re observing these trends.

And then we’re simply trying to position them with simple, basic survival first principles of not going out of business. We’re putting the I can only lose what I put in the middle and I’m not sticking my neck out too much, put myself and put my investors at risk of imploding or going away.

So make very small bets, take little risks. Any good business that would last a long, long time would do. And hey, if it works, we’re going to stick with it. We’ll ride that winner. And again, we’re going to remove all bias and opinion on that and say, “We’ll use cocoa right now.” Why not? Because cocoa has been absolutely nuts, even though it’s reversed as we all know it would have.

But this year, really over the past couple years, but especially this year, it was just any other trend. You get in and historically cocoa, not a very good market for trend, very choppy, but you never know, right? Is why you take all the trades.

So we’re in this trade for a year, like any other trade. Okay, this is good. And then it starts to take off early this year in ’24. Okay, great. I didn’t know this was going to happen.

But I put myself in a position within our business risk. We’re still protecting. It’s always what we care about, protecting our ass, protecting our money just in case, but we’re always open to being surprised and have a happy surprise on the upside if something new happens. So cocoa did just that. It all surprised us.

So the question if it comes from an investor or someone looking to invest is like, “How did you know?” I didn’t know, but I put myself in a position of benefit in case this new thing happened and it just so happened that it did. Great, wonderful. But it doesn’t always happen to this extent where you get a bubble.


What do you think about excluding markets or designing the portfolio? Because I think a lot of people would have this seduction that, “Hey, when I model this out historically cocoa doesn’t work and therefore, I’m going to exclude cocoa.” And this reasoning makes sense on the surface. You’re like, “Look, cocoa is one of these agricultural markets. It’s supply, demand, yada, yada, whatever it is. It doesn’t really lend itself to a trend following methodology.” And then you’re saying, “Hey, no, actually the philosophy is what you’re describing.”

What do you think about what to exclude? Do you exclude anything? Because at some point you can’t just trade everything under the sun. How do you think about coming to the final portfolio where there’s things you might kick out for various reasons or not?


The easy ones to kick out are the ones that are illiquid, that could be hard to get out. All I care about, especially back to Bear Stearns before that when I was in high school, getting ready for the major league draft, getting in a horrific accident to where it ended my career. So I’ve been at an early age introduced with major risk and pain.

So I am a very, very scaredy cat. So any sign of trouble I’m protecting first. I don’t care about the grandiose money making thing. Of course, I want to make money. Of course, it’s the whole point of the game, but I really care about staying in business first and foremost.

So really, that’s an easy one. Liquidity. If it’s not trading very well or if my position size becomes too big for a certain market, I’m just no, I’m going to just stand off and say, “All right.”


But is that a discretionary decision or is that something you think about ahead of time where you’re like, “Look, position sizing, I’m going to trim this as it gets to be X, Y, Z?”


It’s something I thought about ahead of time where I wouldn’t have it in the portfolio if I could not trade really an optimal size. At least for now. I might change my mind on that as I go, but that’s at least where I am now.

But that’s not the case for me. No. I’m too small so I could trade everything just fine.


I was reading… Jim Simons passed away this past week and there’s been a lot of commentary about him.

And listeners, if you haven’t read Greg Zuckerman’s book, I think it’s called The Man Who Solved the Market. There’s also a great acquired podcast on Simons and RenTech.

But he’s the quants quants. Super sophisticated science and mathematics. They do a lot more high frequency trading and market making arbitrage types of investments. But he did some trend following work for sure over the years. But there was a time when he overrode his system.

And the discussion is interesting because it wasn’t one of the actual system, it was more one of business survival, which I thought was an interesting way to think about it because on a system by system basis, the quant is you really don’t want to be overriding stuff. That’s the whole point of having one to avoid the emotional decision making. But this wasn’t even system related. This was firm survivability rated where he is like, “Look, we’re not going to optimize on total return or risk adjusted return. We’re going to optimize on surviving.”

But it seems to me like it’s a little bit of a seduction and temptation to then be like, “Okay, well, when else is this discretion going to creep in?” Which seems like a hard needle to thread.


I think it’s a slippery slope. Once you start changing rules and you may get away with it or you may not get burned too bad, you may have just more an enticement to change some more things because I believe it’s a feeling you’re looking to medicate and people medicated by changing their systems at specific times like, oh, that’s curious why you did that.

Maybe reflect a little bit, maybe write it down, maybe take an inventory of I’m getting a little deep and weird here, but where you feel in your body what might be happening. You’re like, “Oh, yeah, I might be starting to itch or something on the back of my neck. I might be more fidgety.”

All right, you may have some impatience or you may have some fear of missing out or frustration about missing out on something. You want to get that one back, you want to get even. You want to make some changes and yeah, you’re sick of seeing stupid cocoa just whipsaw you for years on end, so get that the hell out of here. I can’t look at it anymore.

All right. Interesting when you’ll kick that out and I think did you say at breakfast last week that they closed the cocoa ETF two months before the big run?


Yeah. I love the counter indicators on when things… It’s like there’s so many of these examples.


That happens all the time. It’s amazing… Just amazing, of course that happened. Of course that happened. And I think that happens subtly as well.


The iPath Bloomberg Cocoa Subindex, I think they closed… Oh, it was an ETN and I think it closed last summer. So not exactly to the day, but it’s like the coal ETF. There’s so many of these where they close right before it goes on a ripper.

You had a fun piece where you were talking about would you rather be shot from 50 or 500 feet and would love to hear that story because that was interesting. I did not know this. And you get to the conclusion of things you know that just aren’t true and we can apply it to markets as well. I want to hear what you’ve learned or things we know that are not true.


When I was into my military phase reading a lot about it, just maybe it was around the time when Bin Laden was killed and I was just like, “This is awesome. How did they find him?” All these things and just started reading about all these seals and all these covert special op guys. So that blew my mind because it’s so counterintuitive.

You think, “Oh, me, I know nothing about weapons.” I don’t believe I’ve ever fired a weapon in my life, I don’t come from a family that has when they did long ago, but thinking not knowing anything about guns, you think, “Oh, yeah, yeah, of course I would want to get shot further away because it’s going to be slower. The bullet will slow down and do less damage.” No. Especially now…

And this example in that book that I brought that example from, a U.S. soldier getting shot by AK-47, which is a very big bullet, a very serious weapon. So the bullets tumble and all it does is create a bigger entry wound and it does more damage as it goes through you because it’s not going a straight, clean, narrow tunnel type of pattern. It’s this big gaping, sideways bullet going through your type pattern. So that’s how the doctor knew that he was shot from close up because if he was shot from far and he got shot above the knee, it would’ve taken his leg right off. So that was a wow.

So I started thinking about that and was like, “Oh, yeah, what other things do we know and how do we come to know things?” And that might be another sore subject, but I started to ask people in my life these types of things during the COVID time. Everyone had all the answers right away. It’s like, “How do you know that? They didn’t even have the stats on this yet. Who told you that?” It’s something you’re just repeating, I think.

So I’m very cognizant of people coming to conclusions and very confident in their words, in the way they talk. So I always ask, “How do you know what you know?” And if it’s, “Well, that’s what he said.” “That’s what I heard.” That’s nothing. That’s not going to pass at NASA. It’s not going to pass when you’re taking serious risk, no one’s going to do this.

But one thing that I was talking with Jerry Parker about several years ago, and I think I brought it to him, he’ll probably claim the opposite. He’ll claim that he brought it to me, but I said, “Oh, yeah, yeah. When you’re running tests and you’re looking at markets, just number them. Do not look at the names because then you’ll invite a story.”

And then after that, I believe it might’ve been someone from Renaissance or someone, some other big quant shop that mentioned that as well, and I said, “Oh, they’re stealing our ideas.” I’m sure this is not like a novel idea, I just hadn’t heard of it before.

I think that’s one thing about the markets is that if you picture yourself as a sailor and they woke you up in the dead of night and they dropped you on a ship in the middle of an ocean, wherever, some large body of water and say, “Okay, get out of here.” Well, you know where home is, get out. He’ll be able to do it because he knows, all right, I know the water. I know that I could follow the stars. I can navigate out of here. I don’t need to know which ocean is this. No, you don’t get to know.

And same thing with the market. Sometimes, not knowing what you’re trading is helpful because it’s hard because we’re humans and we’re interested in other things. We’re watching the news and talking to people. We get these stories in our head.

It’s like, well, yeah, this is a good trend, but this is cocoa. Historically, this thing sucks. You may want to cut or pair it back because really anytime it’s gotten this far away from the mean that’s trending so strongly right now it’s probably almost done. Okay, you think it’s done, then it doubles or it triples from there.

So I think sometimes not knowing what you’re testing or trading can be a benefit. No one’s going to do that. But in terms of just being able to stick to the system, be able to do the trades, which is so important to do, especially in the systematic way of doing things. Again, we’re not discretionary. We’re not picking trades and trades to do and not to do because of our opinions or things like that.


I was thinking about this as I was volunteering in my son’s school this morning and the topic was the science lab constellation. So Orion’s Belt, Ursa Major, stuff like that. And the teacher… And look, these are seven-year-olds, so it’s not complicated, but she’s talking about how the planets revolve around the sun instead of vice versa, which is what people thought a long time ago.

But I actually saw an amazing GIF on Twitter, which we will post in the show notes because she’s like, “Look, the sun is fixed and everything’s spinning around the sun.”

And actually, what this GIF showed, which I didn’t think about for the first forty-some years of my life because the universe is expanding, the sun is actually moving through space and the other planets are… It’s like a corkscrew revolving around the sun as it moves. And once you see it again, you can’t unsee it and you’re like, “Oh, that’s totally not what I thought was happening, but that totally makes sense. And I can’t think about the world in this fixed format anymore.”

Of course, I’m not going to say that to the teacher in the seven-year-old class because it would confuse everyone, but we’ll add it to the show notes, listeners. I’m pretty sure almost all of you have not thought about the world in this term.

How many trades do you think you’ve made in the past? Was it 10 years? When did you start?




Oh, man. So you’re a double digit already. You’re a teenager, a poorly behaved teenager. So how many trades do you think you’ve made in the past 13 years?


Say several thousand.


Yeah, several thousand. Let’s hear some memorable ones. It can be good, bad, in between. This is normally a closing question, but I thought for you case study wise, are there any that particularly stand out as being giant winners? Because of the beauty of trend volume, you never know what’s going to be the winner.

When I think of angel investing, it’s similar. If I could go back and rank all my angel investments by my confidence at the time, I don’t know that the top 10 would necessarily have been the highest rated. Sometimes, you just get returns from anywhere.

Let’s hear some stories you want to tell good, bad, in between trades of years, your…


I think the first big winner started to be in 2014 for me, which was the U.S. dollar on the long side, or if you want to talk about the short side, just shorting euro and pound and Canada, yen, all those things.

That was after a period 2011, ’12, those first few years were despicable for currencies to absolutely just whipsaw at wits end. You make dozens of trades and these stupid things and you’re like, “Oh my God.” And then here we go, you get the next one, you get the next trade and then boom. And I believe it was… Got that U.S. dollar long trade in the summer of 2014, and I think we finished that year up almost 40%. Something great. It was great.

But that was a good lesson because I remember my feeling at the time of taking that trade, this thing sucks, here we go again. I’m just going to lose. But it was also like… This is when other people are having trouble doing this trade too. That’s probably a good sign that no one wants to do it now. That’s probably the right thing to do. When I don’t want to do something when I’m feeling frustrated, it’s probably a good thing to do because everyone else is feeling that as well.

That was the first real memorable one because that helped me get my first decent income after starting and again, people started $300,000 . I think I made $3900 my first year. It was a slim time for a bit. So that was a real good one because I actually get to put a lot of money in our investors’ pockets, into my pocket as well.

But then a similar feeling was in mid late 2020 when everything crashed, COVID crash. Commodities, currencies, all sucked. Stocks sucked. And then started to get these trades, started to get these long trades maybe towards the end of the year, Q3, Q4, and it was a similar feeling. It was after several years or maybe a couple years of nasty markets, especially with this recent crash, and you’re just like, “Come on.”

Again, that same feeling again. Here we go. I’m going to take this stupid long. Market’s going to roll over, blah, blah, blah. And then we get a huge wave of inflation, get huge commodity trends, stocks go way up, crypto goes way up. And I was participating in all of them. So it’s just so annoying the way… I feel almost like the cosmic level of it all works.

And it just brings you to your point of I hate it. And again, this is why it’s another important part of staying in business and learning the skill because if you don’t, the fruit is right there, it’s getting right there, right to the edge, process and your frustration and the feelings that you get to get you off of your system, to get you to do the wrong thing are almost cosmically connected somehow. It’s very annoying. I hate it. But that’s the way it is. So I had another great run and…


And it feels like part of tuition. If it was easy, then probably everyone would do it and then it would destroy all the benefits of the potential alpha possibly as well.

2022 was an interesting period because for the most part, trend was one of the few things that did well and largely, and you can correct me, due to being short bonds.


I remember a lot of people up in arms that year because the beloved 60/40, both legs got hammered. At that point, been trading like this and living like this, living like a trend follower. Again, not just trading like a trend follower. This is my life, this is how I view the world in terms of trends, in terms of taking small risks, riding winners and cutting and not really having a strong opinion about things like, “Oh, yeah, that doesn’t surprise me.” “Yeah, that happened? Oh, yeah, that makes sense. Yep.”

So when both legs go down and everyone’s freaking out like, “Yeah, you didn’t expect that. Of course that could happen.” I didn’t expect it to happen now, but I’m always ready for it to happen.

So I remember not really being affected too much because I don’t participate in the media, I don’t watch it and I don’t watch CNBC, so I’m not really a part of the conversation too much.

Again, I got my blinders on living in my little world of trend only investors talk, my friends talk, and live in the New York area. A lot of people that are interested in this stuff, they can’t help but talk about it. So it’s like, yeah, been short bonds for three years. What do you want to tell you? Just keep rolling the quarterly futures, I got nothing else to say. That’s that.

And I don’t know where they’re going to stop. I don’t care about the fed. This is just what’s happening and you got to grow up, man, and you got to respect the trend at some point because it’s going to teach you that lesson. Don’t let it be an expensive lesson.


Sitting through lots of small losses is the mountain we have to climb in order to get those big winners. What’s the broad batting average over a decade in? Are you like Pete Rose? Are you Ted Williams? Are you Mookie Betts? What’s the batting average for trades? And maybe does it matter or does it not matter so much?


Mathematically, it’s close to Ted Williams, but Ted Williams, his batting average in the context of baseball is very, very, very good. Let’s say a 360, whatever hell he hit. I’m thinking about the one year he hit 406.

The winning trades about 45% of the time are winners. Actually maybe a little lower than that.


Does that seem high for a traditional trend following or not? Is that in line?


Short term, it would be. Short term is generally lower because you generally have some more whips in there. But in times when you get these strong trends that bottom or that top and they just keep going, a shorter-term system will get in those a little bit quicker. So on those types of trades, the shorter-term system might make more money on those trades, but in between, it might get hammered because it takes four more trades than I do. It takes 10 more trades than I do because I’m not getting in and out as often.

With a longer-term system, again where you’re trading markets on average one to three times a year, now that’s about normal. And that’s on a per trade basis if you went to what is your monthly positive-negative, 12 months.


You may not know this offhand, but what’s been your longest trade? Do you know? Because there’s some that have been multi-year.


Yeah, I think it was the bond short. I think it was just over three years. And that was just doing nothing trade.


What’s trending now? Give us a broad swath of what the world looks like. I feel like most of the time people can guess, okay, I get XYZ is probably positive, XYZ is not. But give us some broad sweeping views of what’s trending up and down. This is mid-May, listeners, 2024.


Strongest trends right now broadly are equities. I wish I had a sexier answer than that, but it’s not.

Behind that, I think crypto, even though they’ve… I’m talking specifically about the two markets I trade, which are the Bitcoin and Ethereum futures. I don’t touch any of the off-exchange, non-regulated stuff. No effing way. But those two have been strong even though they have some nasty reversals at times.

Then beyond that, Mexican peso, Japanese yen on the short side, carbon emissions on the short side, even though that’s starting to reverse a bit.

Other than that, in commodities specifically, a lot of things are not doing a whole lot. Agriculture is petering out. There were a lot of shorts, now they’re starting to reverse, maybe go back up.

Same with energies. Crude oil is just stuck around this $80, 75, $82. It just can’t get out of that little range.

So I always hope for long trades. So I’m hoping we see some resurgence in some of these commodities again because they represent a lot of the markets that I trade and observe. But yeah, bonds as expected was a three-year very smooth trade, did nothing. You woke up and you made money short bonds for a few years.

So now as expected, I think now that has reversed. It doesn’t necessarily mean that the whole move is going to reverse, but the bond price is off the lows and then they’re sluggish. What’s the Fed going to do? I feel like the easy money’s been made for a while. I think it’s going to chop around.


You look back at the bond trade and has there been a more obvious trade in hindsight?

I was chatting with an advisor the other day, a very successful traditional advisor, and he’s like, “Looking back on it,” he’s like, “What was I thinking? Investing in bonds at 0%?” He is like, “Were we expecting to go into a deep deflation? What an odd choice in retrospect.”

And so trend following, why it’s such a great idea is there are times when there’s dislocations and the eventual outcome feels pretty well-known. You may not know in the short term where it’s going to go, but nothing else was really going to protect you when bonds eventually went from zero back to normalize other than trend. And granted if it happened overnight, may not have helped, but usually that’s not the way things work.

Where do people find you? They want to learn more about Mike and the firm. Where do they go?


They go to… Pretty active on LinkedIn, Twitter. Twitter is a little bit more spicy, but LinkedIn a little bit more professional. You just look up my name Michael Melissinos. I know it’s tough to spell, so I would just copy it from the show notes.

And the website as well, Melissinos Trading.

I have a Substack as well. I replicate all the articles I write on Substack on the website, just so it’s just easy for everyone to go, not be scattered all the time. But I liked Substack because it just gets me thinking, gets me talking about things I like to say. If I have something to say, I’m going to write it down there. I’ve been in a little lull recently, but I usually like to do one once a week.

And the same thing with the podcast. That’s been a little lull recently. I do it with Jerry Parker, but that’s just the Talking Trends podcast. Very hokey, but that’s everywhere, Apple, Spotify.


Awesome. Mike. Thanks so much for joining us today.


Thank you. It’s a great time.