235: How traders can compete in the markets and find profitable edges - Jason Strimpel

Who wants a steadily rising equity curve with little or no drawdown? I'm sure most traders do, but unfortunately it doesn’t usually end up that way. Drawdown is a big part of trading and can be one of the the biggest challenges traders face, so what techniques can we use to potentially help reduce drawdowns? Our guest for this episode, Scott Phillips, is going to share techniques he uses to manage drawdowns in his own trading. In our chat you will learn: How to quickly test a trading idea to determine if it’s worth more investigation Why it’s so important to understand market types, the impacts it could be having on your trading results and how you can leverage this knowledge to create strategies with enhanced performance How to improve your trading results through better trade management and multiple exits.   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 Okt 201650min

Building robust trading strategies that can detect and adapt to market conditions can be a real challenge, and failure to do so can often result in poor trading performance and drawdowns. How can we build more robust trading strategies that adapt to market conditions as they change? Our guest for this episode, John Ehlers, who has a guest on episode 48, joins us to share some common problems traders face when building trading strategies along with tips on how to overcome them. In our chat you will learn: Tips and techniques to detecting and adapting to market conditions Common problems traders face with indicators and how to fix them The 4 requirements to building a robust trading strategy How the conventional wisdom of using indicators causes late signals and how to use them to anticipate instead A simple technique to determine if your indicators are working properly for the market conditions   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.

18 Sep 201642min

Trading algorithmically based on sentiment data is a relatively new field compared to more established approaches. With the explosion of social media and computing power, the analysis of sentiment data has also increased, with some hedge funds committing considerable resources to researching the applications of sentiment data in trading. However, there is also some skepticism of the value of analyzing social media for trading, so what is sentiment trading all about? Can sentiment actually be used in trading models and how? Our guest for this episode, Richard Peterson, has been analyzing sentiment for over 20 years. He started what was probably the world’s first fund specializing in sentiment trading, and now runs a company called MarketPsych, specializing in the collection and analysis of sentiment data. In our chat you will learn: Why sentiment is so important and how it can give traders an edge The challenges of using sentiment data in trading models The best and worst markets for sentiment analysis as a predictor Applications of sentiment analysis in quant models and the future of sentiment analysis   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.

4 Sep 201641min

Whether you’re a retail trader with a small account or a fund manager with millions or billions under management, something that we all need to consider carefully as traders is how or where we’re going to use the money in our trading accounts. 'Capital allocation' sounds boring but it can have such a huge impact on our trading results. Unfortunately, it can sometimes be overlooked for other aspects of trading like entries and exits, leaving traders with an inefficient use of their capital and can result in lower returns and poor performance. Can we use our trading capital more efficiently to achieve higher returns? And if we can, then how? Todays guest, Michael Melissinos, started out as a junior analyst at Bear Stearns and is now running his own systematic trend-following fund Melissinos Trading. Mike is a competitive guy, always looking for ways to improve his trading performance and in today’s episode he's going to share with us some practical ideas and research, including: The 3 most important things that influence trading performance Why what you trade is more important than entries and exits Ideas to improve trading results through dynamic capital allocation How to use indicator scores to measure trend strength 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.

21 Aug 201657min

Today’s guest is a trader that has been requested quite a few times actually, I’ve had a lot of requests to have this person as a guest on the show, and the guest is Adam Grimes. Adam has two decades of experience in the industry as a trader, analyst and system developer and is currently Chief Investment Officer of Waverly Advisors. He’s previously held positions at Level Partners, MBF Asset Management and SMB Capital and is the author of ‘The Art & Science of Technical Analysis: Market Structure, Price Action & Trading Strategies’. For those of you that know Adam and his work, his approach to trading is a mix of quant and discretion, and I think even if you’re a purely systematic or quant based trader it’s interesting to hear other people’s approaches and points of view. So we start off the chat by discussing his approach of mixing quant and discretionary models, and then we move onto behavioral factors in the market and why approaches that look at the market as purely rational fail. We then end the chat discussing Keltner channels and their applications to trading, so there’s quite a variation in topics here but I’m sure you’ll find it interesting. Topics discussed Mixing discretionary decisions with a quantitative framework Why behavioral factors in the markets are so important and why approaches that look at the market as purely rational fail The application of Keltner Channels in 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.

8 Aug 201647min

When I was preparing for the previous podcast episode on system trading through the Brexit, I had to review some of the past podcast episodes so that I could include some background content for the guests, and as I was going through some of those past episodes I realized that there was so much great information in them that I had already forgotten about. I even found some concepts or ideas that didn’t really catch my interest because it wasn't appropriate to my trading at the time but it’s now more relevant to me personally, so I thought it might be time to do another review of some of the past episodes as a reminder and to perhaps gain or reinforce past insights. Last year, we did a podcast episode where we reviewed episodes 1- 20. That was episode 30 if you’d like to go back and hear that. In this episode we'll review lessons and highlights from episodes 21-40. Some of the topics we’ll be discussing are: How to never run out of trading ideas, The importance of creativity and a simple technique to increasing our creativity, How to manage data mining and avoid overfitting, A number of approaches to building robust trading strategies, How to bet bigger with a smaller overall risk, Plus 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.

24 Juli 201642min

The results of the Brexit decision took a lot of people by surprise and the markets reacted accordingly. What was interesting about this market event is that we all knew the date and time period when the Brexit votes would start rolling in, so we had a rough idea when we might see some type of market reaction, if the market reacted at all. As systematic traders, what should we do in this type of situation: Should we continue trading as usual, following our systems? Should we override our systems to reduce exposure, or perhaps temporarily stop trading altogether? Are there any other approaches that we should consider? How do we go about deciding what to do? In this episode we’re asking 13 system traders and past guests of the podcast (actually it's 12 past guests and one future guest) about their approach to trading around the Brexit vote. I’ll be asking them what their trading plan was going into the Brexit decision and you might be surprised with some of their answers. I’ll also be asking them what factors they considered to reach that decision, whether they were happy with the approach after the event and any key learnings we can get out of this experience. I personally found it really interesting to hear what they had to say so I’m sure you will too. Topics discussed How 13 pro system traders approached the Brexit decision - did they trade through it, reduce exposure, stop trading or something else? Their answers may surprise you! The factors they considered when deciding on that approach Lessons learned and insights from their results and the market reaction to the Brexit decision   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 Juli 20161h 20min

Traders are always looking for an edge and today's guest shares a simple approach he calls an 'unfair trading advantage', that can have a dramatic impact on trading strategy performance. The guest on this episode has been on the show before, to discuss breakout trading strategies back in Episode 43. In that episde we discussed the steps to building breakout strategies and we even released a breakout strategy toolkit, included an ebook, cheatsheet and EasyLanguage code for 2 breakout trading strategies. In this episode, our guest Tomas Nesnidal will be sharing a different trading approach, and it’s something he likes to call ‘an unfair trading advantage’. He’s going to explain to us what it is and why he calls it an 'unfair advantage.' It's something that a lot of traders have probably heard about but perhaps are not aware of how to use it properly or even the positive impact it can have on trading results. Tomas will explain it in this chat so take a listen! Topics discussed An 'unfair trading advantage' all traders should consider for their own trading strategies The technique that most traders have probably heard about but don't know how to use properly The incredible impacts this technique can have on trading performance   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.

26 Juni 201640min