212: Trading Triumphs - Brent Penfold's Journey to Success

In this episode we’re going to be talking about the pits. The trading pits may be closed (or most of them are anyway) but there is a lot of history there. There are lots of stories and events that occurred in the pits over the years that we can still learn from today. On this podcast episode we have special guest Damon Pavlatos who has been extensively involved in the commodity and financial futures industry since 1978. He has held Exchange Memberships on the CME, CBOT and Mid America Exchange. Not only did he trade on the floor for himself but he also executed for some of the biggest players around, including Paul Tudor Jones, Louis Bacon, Monroe Trout, Toby Crabel and others. In Damons 40+ years of experience he’s seen a lot, and he’s experienced a lot too. So, in our chat today he’s going to share some interesting stories from the floor, and some valuable lessons for traders of all levels of experience too. Some of the things you’ll discover in my chat with Damon are: The crash of ’87 – what it was like leading up to, trading through it and how the crash of 2008 was scarier than the crash of 87, One of the biggest causes of traders blowing up their accounts - it may not be what you think, Why volume could be the most important indicator and how order flow ‘clues’ can impact trading results, Why it so important to ‘stay ahead of the curve’ and adapt to changes in technology and the markets, Why some types of brokerage firms are dangerous and how to check if they’re properly capitalised, And so much more. We cover a lot in this episode so let’s jump over now to my chat with Damon   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

2 Sep 20181h 9min

Ever wonder how the ‘other side’ trades? I suppose it depends what ‘trading world’ you live in but in this episode we’re exploring 2 different worlds - the institutional world AND the private trading world. And joining us to do that is special guest Petra Zacek. Petra started out in the institutional world and in this episode she shares some interesting stories and lessons about her time there. But now that she’s a private trader she’s also going to share some insights into trading her own account and the transition from institutional to private trading. Some of the things you’ll hear in our chat today are: Why it’s important to think outside the box and express your trade idea in different ways, Making the switch from institutional to private trading and the impact her institutional experience has had on her trading today, How the institutional world research ideas, including what private traders are up against and how we can compete, Benefits of collaboration, using algos as an additional filter on top of a setup, how to balance accuracy with win/loss ratio plus a whole lot more. So let’s jump over to my chat now with Petra.   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

19 Aug 201842min

Quite often the focus for traders are the technical aspects of trading - indicators, back-testing procedures, robustness checks, statistics, trading platforms, infrastructure etc. All of these aspects can have an impact on trading performance. However, there are other aspects of trading too that often go unrecognised, ignored, and can have a huge impact on our performance no matter how good our strategies are. What are they? Joining us today to discuss high performance trading is Mandi Pour Rafsendjani. Mandi is a trader, speaker and peak performance trading coach who works with independent traders, prop trading firms and hedge funds to improve their trading performance. Some of the things you’ll discover in my chat with Mandi are: The key aspects that set high performing traders apart from everyone else, How traders can identify what’s really holding back their performance, Why it’s important to have a ‘reset button’, Two aspects of drawdown and how traders can more effectively manage drawdown, How to strengthen your ‘taking-losses’ muscle to better handle losses, And much more. So let’s jump over now to my chat with Mandi on high performance trading.   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

5 Aug 201852min

"Backtesting trading strategies does not work!” Got your attention? Maybe you agree with this statement. Perhaps you strongly disagree and you’re currently heading out to the backyard to grab your pitchfork. Or maybe you’re shaking your head thinking ‘what the heck swanny, have you finally lost it man?’. Well, the good news is I haven’t lost it (yet). We're going to dive deeper into this statement in the podcast episode today. But first, I'd like to introduce our guest - John Ehlers. John is a friend of the show. He’s been a guest multiple times, discussing topics such as cycles, indicators and digital signal processing. In our chat today we’re going to tackle robustness and also intraday trading. Some of the things you’ll hear on the show today are: The startling differences between intraday and daily timeframes and the critical factors you need to watch out for, Why it’s more difficult to predict where market prices are going on an intraday basic compared to daily timeframe, and how you need to think about intraday data differently, We’ll be digging deeper into this “Backtesting trading strategies does not work” statement to find out what it means, How to use a simple Genetic Optimization trick to determine the robustness of a strategy How Genetic Optimization can be used to identify suitable ranges for optimization parameters Why short walk forward periods could be better than longer, Plus a whole lot more. So lets jump over to my chat now with John Ehlers.   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

22 Juli 201840min

As Warren Buffet once said: "the stock market is a manic depressive.” The market can be full of euphoria and greed one moment, and switch to fear and panic the next. This can often be a time of danger and high-risk for some traders, but for other traders it’s a time of immense opportunity. How? In this podcast episode we’re joined by special guest Larry Connors. Larry has over 30 years in the financial markets industry and has been featured on the Wall Street Journal, Bloomberg, Dow Jones, & many others. He has been providing high-quality, data-driven trading research for over 15 years, and I’m sure that many BST listeners have a stack of his books on their bookshelf. I definitely do! In my chat with Larry you'll discover: How human emotions drive the market, and why it’s so important to look beyond price charts and indicators to understand what's moving the market, How we can leverage extremes in specific human emotions to create quantifiable and profitable edges, How Larry came up with the idea of publishing his book ‘Buy the Fear, Sell the Greed’ and what traders can learn from it, 3 simple indicators to quickly judge the mood of the market, How Warren Buffets investment approach to be ‘fearful when others are greedy and greedy when others are fearful’ can also apply to short-term trading, And yes, I’m going to ask Larry about that famous ‘Stops hurt’ chapter published over 10 years ago that still has people talking today, Plus we cover a whole lot more.   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

7 Juli 201835min

In this podcast episode we’re going to be talking about strategy design and different ways to look at the markets, and joining us as our special guests is Rikard Nilsson from Autostock. Rikard trades all different styles and markets, and has even built his own trading platform with some interesting features he’s going to share with us. Plus he’s going to share some interesting ideas on how he looks at the markets, some of which you may not have heard of before, including: The 'Predictive Average' indicator – how it can be used to indicate potential market behaviours over the following days/weeks and months, Validating strategies across different instruments, Excluding certain parts of the day based on data, Adaptive 'Backtrack Technology' and how to filter trading signals and position sizing dynamically based on past market behaviour, Plus loads more, so let’s jump over now to my chat with Rikard   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

24 Juni 201838min

A huge part of algorithmic trading is all about stacking the odds in our favour. Finding statistical edges, identifying times when probabilities indicate that market conditions are either favourable for a trade or perhaps unfavourable for a trade. And although probabilities aren’t certainties, they can still be an important guides for traders, so joining us as special guest for this episode is Scott Hodson from Probable Trades. Some of the things you’ll discover in my chat with Scott are: How to apply probabilities to trading strategies and why looking at cross-sectional probabilities across multiple dimensions of data can potentially enhance trading results, How a Probability Almanac can help track the performance of a trading strategy over certain time periods, Why it can sometimes pay to have a fundamental knowledge of the stocks you’re buying instead of just blindly following trading signals, How analysing risk to reward of past trades can help to determine at what point taking more risk is not beneficial, Why you need to care for your ‘emotional capital, just as much as your ‘trading capital’, A specific type of stop that can reduce the length and size of drawdowns, Shorting strategies as a hedge to smooth out the equity curve and reduce drawdowns, And much more.   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

10 Juni 201835min

In this episode we’re going to be talking about holey strategies and portfolios. Now, when I say "holey" I’m not talking about religion, divine intervention, holy grails or anything like that, although we could probably apply todays topics to those type of strategies that need divine intervention (and who hasn’t had a strategy like that at some point?). No, when I say "holey" I mean something with a hole in it, like a bucket that has a hole in the bottom. When you put water or some other liquid into that bucket, obviously it starts leaking, reducing the performance of that bucket and today we’ll be discussing holes in trading strategies and portfolios that could be reducing trading performance. Joining us as special guest for this episode is Ryan Moffett from Blackpier Capital. Ryan has spent the last 12 years specializing in designing and trading robust strategies, working with and being mentored by traders out of the CBOE as well as hedge fund managers out of New York and California. Some of the things you’ll discover in my chat with Ryan are: Why manual backtesting can be more beneficial than automated testing, How ‘deliberate practise’ can be used in the strategy creation process to get a deep understanding of a strategy, How to find holes in a trading strategy that could punish your trading performance, The hole in people’s portfolios and how allocating a small portion to ‘the 4th asset class’ can be a good hedge for a portfolio when other markets aren’t doing too well, Plus a hole lot more... (see what I did there!)   Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

27 Maj 201847min