Top Traders Unplugged

In today’s episode, we discuss if it’s possible to successfully blur the lines between Discretionary & Systematic Trading, why most of the largest Hedge Funds in the world are Systematic, results of the rolling 10-year returns of Trend Following versus the S&P 500, how diversification can prevent long drawdown periods, why forming an opinion on your stock position can negatively affect how you manage the trade, and we also explain some of the differences between Cash Contracts and Continuous Contracts.  Questions answered this week include: Should you beware of high win percentages?  Are large drawdowns a normal part of Trend Following? What are the largest up or down moves we’ve ever experienced? If any listeners would like to leave us a voicemail message, you can do so here. Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 - Intro 1:05 - Macro recap from Niels 5:50 - Weekly review of returns 14:55 - Live event update 10/26/19-10/27/19 15:20 - Top tweets 45:40 - Question 1: Sam; What are the biggest performance moves (up/down) in your career? 54:40 -  Question 2: Sam; Why do some trade long-only (versus long-short)? 57:45- Questions 3/4: Bruno; What do you think about using cash versus futures to calculate trends/create systems? Is there a way to value a commodity? 1:04:40 - Performance recap 1:05:50 - Final thoughts Subscribe on:

The tables have turned! In this episode, Niels Kaastrup-Larsen becomes the first featured guest on Erik Townsend's newest podcast - MacroVoices Spotlight! In this epsiode, Niels and Erik discuss Trend Following, the history of the Turtle Traders, Benefits of de-correlation and conditional correlation, how CTAs have been performing, and much more. Erik Townsend is a software entrepreneur turned successful hedge fund manage who currently hosts the MacroVoices podcast. If you enjoyed this episode, you can visit macrovoices.com to find many more episodes on the topic of investing. Subscribe on:

“If we can follow just a couple of simple rules, we can overcome the behavioral errors which are the plague of so many investors.” - Daniel Crosby (Tweet) Welcome to Top Traders Round Table, a podcast series on managed futures brought to you by CME Group. On today's episode, host Niels Kaastrup-Larsen speaks with Dr. Daniel Crosby, Chief Behavior Officer of Brinker Capital, and the host of The Standard Deviation Podcast. Dr. Crosby came to investment management through clinical psychology and therefore has a unique perspective on behavioral economics. The discussion ranges from how human behavior is evolutionarily ill-equipped for investment management, the importance of having rules for investing during turbulent times, and what investors can do to modify their behavior for success. Subscribe on: In This Episode, You'll Learn: * What makes Daniel’s background rare in investment management * How the eradication of Guinea Worm is relevant to investing behavior * Why the evolution of human behavior is antithetical to investing * How being a quantitative investor is beneficial to overcoming bad behavioral economics “Knowledge does very little to change human behavior.” - Daniel Crosby (Tweet) * The correlation between activity and success in the markets * What are the building blocks of behavioral finance * Why “I don’t know” is the most under-appreciated phrase in investing * The role of conservatism in behavioral economics This episode was sponsored by:     Connect with our guests: Learn more about Daniel Crosby and Brinker Capital “I never know what’s going to happen. But I am a market historian and I know what’s happened previously, and I feel I can tilt probability in my favor by operating within those parameters.” - Daniel Crosby (Tweet)

In our special Anniversary Edition of the Systematic Investor Podcast, we invite Peter Borish onto the show to discuss the differences between Discretionary and Systematic Investing, Peter’s journey from the New York Federal Reserve to his role at Quad Group, his experience working with Paul Tudor Jones, his opinion on the CTA industry and its current approach to attracting capital, the benefits of having solid business partners during the best and worst of times, the power of Market Cycles, how perception rather reality can affect a client’s judgement, the effectiveness of Trading coaches, and we also get Peter’s opinions on the current state of the markets.  We asked Peter many questions this week, including: Where do you draw the line between normal drawdowns, and feeling compelled to change your models?  How do you best explain the benefits of a Rules-Based Trading approach to potential clients? What does Quad Group do, and how difficult is it to find new talent?  Can the collapse of Passive Index Funds be the main driver behind the next recession? Thank you to Jim for submitting your voicemail to the show.  If any listeners would like to leave a message, you can do so here. Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 -  Intro 1:20- Weekly review of returns 5:30 - Voicemail from Jim 7:20 - Peter Borish Bio 11:10 - Moritz: What sparked your interest in trading? 12:50 - Jerry: What are your opinions on me/CTAs and the evolution/future of the industry? 18:00 - Niels: Can you comment on Tony Robbins coaching Paul Tudor Jones? 22:20 - Niels: Do systematic traders need coaches? 29:40 - Moritz: How do you balance sticking to a system vs changing/evolving? 41:25 - Niels: How would you pitch TF nowadays to attract more investors? 47:10 - Jerry: How should systematic and discretionary be combined? 51:25 - Jerry: Do famous macro traders use trend but not talk about it? 57:25 - Niels: Do you think famous traders deep down are systematic? 59:10 - Niels: Please explain Quad Group and your role. 1:02:05 - Niels: How many managers do you evaluate and how many make the cut? 1:03:50 - Jerry: What’s your view on the future of hedge funds and CTAs? 1:04:50 - Jerry: What is your current macro view? 1:08:25 - Moritz: Is Quad’s trading systematic or discretionary? 1:09:10 - Moritz: Is the systematic trading in options/derivs or futures/stocks? 1:09:50 - Niels: How do you give people a specific loss limit at Quad but also want them to follow systems that may perform worse than backtests/history? 1:14:40 - Jerry: How do you help a trader grow his AUM/business at Quad? 1:17:00 - Niels: What questions do you ask potential managers? 1:18:50 - Performance recap

In this week’s show, we discuss using multiple systems to further enhance diversification, the differences between a portfolio meeting expectations versus benchmarking it against an Index, Trend Following in-house versus using an experienced Systematic Investment manager, having the temperament to stay the course with your investments, and the effectiveness of trying to predict the next moves of CTAs. Questions answered this week include: Are interest rates lower than usual at the moment? Does the market ever display any meaningful sentiments from the crowds? Do we use any rules for liquidity? What questions would we consider before allocating to a Systematic Trading strategy? What’s the maximum loss of equity we would be willing to accept due to one return driver, such as the Swiss Franc in 2015, and do we ever have to ‘step-in’ and override our systems? Thanks to Seth for submitting your voicemail to the show.  If any listeners would like to leave a message, you can do so here. Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Subscribe on:

Today we discuss the potential dangers of avoiding simplicity, how good Trading is counter-intuitive to Human Nature, the benefits of doing the same thing over and over, how to earn big profits through aggressive Trend Following strategies, the secrets to building wealth through investing, and how we like to approach correlations in our portfolios.  Questions answered this week include: Why are complex strategies more attractive to investors?  Is the phrase ‘this time it’s different’ actually true?  How important is it to have access to vast amounts of data?  How much capital is needed to operate a profitable & diversified Trend Following portfolio?  What questions should Investors be asking Fund Managers?  Do we use Volume as part of our strategies? Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 - Intro 1:00 - Macro recap from Niels 2:40 - Weekly review of returns 7:45 - Voicemail from Sam 10:15 - Top tweets 44:20 - Question 1: George; With small AUM, should traders/investors outsource TF? 1:04:15 - Live event update 10/26/19-10/27/19 1:05:00 - Questions 2/3: James; What are the most misunderstood parts of TF? What questions should investors be asking? 1:19:50 - Questions 4/5: James; Do you look at volume or just price? If correlations pick up, do you alter your system? 1:22:45 - Performance recap Subscribe on:

Today, we discuss the potential dangers of taking time away from the markets, the importance of Investor behaviour over the ability to analyse data, Morgan Housel’s article on the universal Laws of Investing, the differences between Buy-and-Hold, periodically re-balancing your portfolio, versus a more active Trend Following approach, as well as the art of profiting from Tail Events.  Questions we address this week include: is Inter-Market Analysis a useful tool or a dangerous approach? Should a Trading System be designed to be comfortable to execute?  Would a reduced presence of Trend Followers in the market result in slower, more random price movements?  What is the overall effect on markets of large participation from Trend Following strategies, and can the space become too overcrowded? Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 - Intro 1:00 - Macro recap from Niels 3:40 - Weekly review of returns 8:30 - Top tweets 59:30 - Question 1: Craig; If less TF market participants exist, shouldn’t trends be slower and more random on ST horizons? 1:12:45 - Live event update 10/26/19-10/27/19 1:13:30 - Performance recap 1:15:00 - Challenge to Sam to record the first message Subscribe on:

This week, we discuss the current state of the Bond market, how the larger, commercial institutions affect overall CTA Trend Following performance, how to deal with the fluctuations in currencies when performing backtests, and we also give our thoughts on various Trading exit strategies. Questions answered this week include: does the majority of CTAs get out of their equity positions when the S&P500 falls below its 200-day moving average?  Should you avoid trading markets that perform badly in backtests?  Can a system that is working too perfectly be a bad sign? What are the implications for trading every market in the same way?  What is the benchmark Sharpe Ratio for Trend Following strategies?  Is there a limit to portfolio diversification? Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 - Intro 1:45 - Macro recap from Niels 3:25 - Weekly review of returns 12:20 - Top tweets 34:40 - Question 1, Sam: What is the benchmark TF Sharpe ratio? 43:00 - Question 2, Sam: Can there be too much diversification? 53:15 - Question 3, Walter: Please discuss how you deal with foreign currency denominated futures. 58:10 - Question 4, Walter: Since most stocks don’t beat the index or T-bills, shouldn’t shorting be easy (versus the conventional wisdom shorting is hard)? 1:03:00 - Questions 5 & 6, Jeff: What are the risks of using larger (vs smaller) ATR multiples for exits? What kind of exits does DUNN use? 1:08:40 - Performance recap 1:09:40 - Live event update 10/26/19-10/27/19 Subscribe on:

This week, we discuss the importance of avoiding any emotional attachments to your positions, how correlated markets can affect your portfolio, how to decide which trades to execute when your signals outweigh the amount of equity available to trade, and we also give our thoughts on Margin-to-Equity related to Position Sizing.  Questions answered this week include: does uncertainty in the markets have any negative effects on Trend Following strategies? Can the S&P 500 ever be a good comparison when gauging Trend Following performance?  Are there any signals that can reliably measure trend strength? When Trend Following strategies aren’t working, should you apply any other strategies?  Does Jerry trade Index Futures or single stocks? Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 - Intro 1:50 - Request for podcast reviews 2:45 - Macro recap from Niels 6:45 - Weekly review of returns 8:50 - Live event update 10/26/19-10/27/19 9:50 - Top tweets 44:30 - Question 1: Sandeep; Please discuss market correlations. 49:40 - Questions 2/3: James; When adding new markets to a system, what are you looking for? How do you calculate trend strength? 1:00:30 - Question 4: Dante; What strategy should one use in high volatility periods? 1:04:30 - Question 5: Ali; How do you pick the markets in your system? 1:09:20 - Question 6: Ali; Will Jerry please discuss how he trades single stocks 1:13:00 - Question 7: Ali; Can you recommend a broker? 1:14:15 - Question 8: Ali; Please discuss margin to equity and position sizing 1:18:00 - Performance recap 1:19:15 - Check out Top Traders VoiceMail Subscribe on:

When it comes to Behavioural Finance, a few people stand out in terms of their contribution to helping us all understand why and how it works. The intersection between Human Behaviour and Quantitative Investing can be difficult to understand for even the most sophisticated investors.  Today, I want to share some really important insights from one of my favorite professors, who is also a practitioner of this discipline, namely Andrew Lo of MIT Sloan School of Management and Director of MITs laboratory of Financial Engineering.  Many people know Andrew as the father of the Adaptive Market Hypothesis, and our conversation was wide ranging, entertaining, and deeply insightful.  So enjoy these truly unique take aways from Professor Andrew Lo, and if you would like to listen to the conversation in full, just go to Top Traders Round Table Episode 18 and Episode 19. The Ecosystem of the Financial Markets Niels: Now, our conversation today will focus on a number of different topics within the managed futures industry, and, perhaps, a few that will fall a little bit outside of this. So, to kick things off in a slightly different way, I want to come to you, Andrew, first, and ask what you think of when I say Rabbi Mahony, Rabbi Mahony, Rabbi Mahony, and I hope you know what I’m referring to so that our listeners don’t think that I’ve completely lost it at this stage. Andrew:  Well, thank you for bringing that up. That comes from one of my stories that I’ve written about in my book, Adaptive Markets. It’s an idea about thinking about financial markets more like a biological ecosystem rather than a physical system.  As you may know, most economists suffer from this disease that I call physics envy. We wish that we had three laws that explained ninety-nine percent of all behavior, the way the physicists do. In fact, we have ninety-nine laws that explain only three percent. So, the idea behind adaptive markets is that we really have to think about these financial market dynamics as coming from human interactions, and trying to model those human interactions is really critical. So, the Rabbi Mahony story really has to do with the fact that I heard many years ago about a technique for getting parking in Harvard Square.  It’s a terrible, terrible challenge to drive a car into Harvard Square because there is never any parking. So, for years I just decided not to do it. But, a friend of mine said that, if you used this following algorithm: before you go to Harvard Square you utter the incantation, Rabbi Mahony, Rabbi Mahony, Rabbi Mahony, at that point you should be able to go to Harvard Square and get parking. The amazing thing is this algorithm actually works. But, the more interesting reason is why it works. It works because it changes the way we behave. It changes our expectation for getting a space. Because now, once you utter the incantation, you must, somehow, in a part of your brain, believe that you might be able to get a space and that changes the way you drive. It changes how you look for parking, and, magically you actually increase the chances of getting a space. So, it really says that human behavior can actually change our reality.  Sometimes things need to be believed in to be seen. Niels:  Yeah, absolutely. Just out of curiosity, do you think that belief always precedes action and plausibility? Andrew:  I think it is something that happens simultaneously, in many cases. Our beliefs have an impact on our behavior, but our behavior has an impact on reality, and that reality shapes our beliefs. So, it’s kind of a feedback loop that is happening and updating all the time. Unless we’re aware of that,

This week, we discuss whether commodities are more risky to trade than equities, if a stocks-only Trend Following strategy can be profitable in the long run, if a deep drawdown is worse than a long drawdown, and the importance of over-estimating any possible drawdowns implied by a backtest. Questions answered include: should all Trend Following funds be required to provide Crisis Alpha? Is there ever a good time to override your system and trade outside of the rules? Should you always execute trades from your signals immediately, or wait for an extra confirmation sometimes? Is there an edge to be gained from seeking the perfect entry into a long-term trade? How many positions should you have open at any one time? What can be considered a good amount of leverage? Register your interest for our upcoming live event in New York here. You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 - Request for podcast reviews from listeners 2:15 - Intro/Macro recap from Niels 7:50 - Weekly review of returns 11:50 - Live event update 10/26/19-10/27/19 12:50 - Top tweets 58:50 - Questions 1/2/3: James; Why don’t you like the original Turtle system? What systems do you prefer? Regarding entries/exits, do you prefer executing intraday, on close, etc.? 1:06:20 - Question 4: James; What is the average leverage in your portfolio and how many positions do you hold at any one time? 1:12:30 - Performance recap 1:14:00 - Discussion of Salem Abraham decision to revamp his business away from a classic CTA Trend Following shop Subscribe on:

It has been said that: 'The biggest room of all, is the room for improvement', and one thing that is clear to see in the amazing careers of today’s guests, is the continued hunger for learning in the quest for an improved investment process. This has led to an unprecedented success for this trio.  Today, I share the last key insights from my conversation with Michael Adam, David Harding and Marty Lueck, also known as the founders of AHL.  In this post, we don’t just discuss the importance of learning... but also how you must un-learn certain things in order to move forward.  Lastly, we discuss what the three of them wish the legacy of AHL will be. So, sit back and relax and enjoy these truly unique takeaways from my conversation with Michael, David and Marty and if you would like to listen to the full conversation, and I hope you do, just go to Top Traders Round Table Episode 13. Keeping Systems Optimized & Minds Open Niels: I think it was once said that, "The biggest room of all is the room for improvement." By this I mean, when I look at your achievements, I see a continuing hunger for learning. What about the flip side, you touched upon it earlier today about unlearning. Are there certain things you've found really important to unlearn in order to continue to improve your strategies? Were there things that you thought were really good only to realize that they were in fact flawed and much riskier than you thought? Mike: That's probably a different view amongst the three of us. I remember, in the early days, David had an office where what he would do, he was surrounded by data, there literally was this much. His desk used to be a complete chaotic mess full of cuttings from the Wall Street Journal and bits of paper and notes. My desk was always completely clean. I thought that that was because I was more organized and focused than David, and he used to say to me, "Empty desk, empty mind."  I've always believed that one of the biggest challenges in systematic trading is not remembering what you know it's having the discipline to forget what you know because applying what you know to the next thing that you do is a very powerful hidden form of optimization. I think that building into research processes the organized capacity and insistence that people forget. Also, recruiting people who never worked in the field before, always, always, feeding people who aren't polluted by knowing stuff is really, really, important. On the other hand it's very hard to develop systemic trading if you don't have a real feel for the way that markets work, so there's this constant battle, I think, between what insights you have, what wisdom you have on the one hand, and yet have the abilities to forget the specifics. I don't have an answer to that. I think it is extremely hard to do. David: Yeah, I think what you said is spot on. Also, with the other people we've recruited, the struggle has been to get them to forget the efficient market theory. You need clever people with good mathematics and computer science. Typically you get them because they've passed degrees and took exams and so on and so forth. They've often been taught the efficient market theory which is a beguiling theory because the mathematics is appealing and difficult so it's something they can master. 'The whole thing is always in need of constant care and attention. We spent an awful lot of time and money on improving the execution of what we do, and I think we got that to a really great place, and there's more that we can do.' Then having mastered that they believe it to be true, most of them - most people having mastered something difficult.I think education can crush creativity. It's interesting that Steve Jobs didn't actually get a degree, isn't it? He went off and did a smorgasbord of courses including, famously, calligraphy. I think, sadly,

In this week’s episode, we discuss Ray Dalio’s recent article on Paradigm Shifts and his comments on the safety of Gold.  We also touch on the perils of having too many filters that keep you from entering a trade, why you should avoid ‘sure thing’ trade recommendations from others, the importance of having a plan before entering a trade, the benefits of incorporating what you’ve learnt from others about Trading into your own strategies, and the reasons for buying at the 52-week high as opposed to the 52-week low.  Questions this week include: is it better to have multiple exit strategies on a trade or just one single criteria?  Should long positions have the same Trading rules as short positions? Is there such a thing as having a ‘healthy fear’ in the markets? You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Episode Summary 0:00 - Request for podcast reviews from listeners 2:30 - Intro/Macro recap from Niels 3:30 - Weekly review of returns 6:30 - Discussion of Ray Dalio article 10:00 - Jerry’s highlights for the week 12:15 - Discussion of paper on TF speeds 27:00 - Top tweets 58:30 - Questions 1/2: Harsh; Can you have different exits for longs and shorts? Can stop distance adjust dynamically based on profit? 1:06:00 - Question 3: Sebastian; Can you trade without pain/fear if you deeply believe in your approach? 1:14:15 - Performance recap Subscribe on:

In 1987, 3 scientists, 1 from Cambridge and 2 from Oxford, were brought together by their shared passion for the markets and for computers.  Little did they know, that over the next 3 decades, this passion would lead them to build 3 world-leading multi-billion dollar Systematic Investment businesses.  Today, I would like to share another Golden Nugget with you, from my conversation with Michael Adam, David Harding and Marty Lueck, also known as the founders of AHL. In this post, we focus on how markets and the importance of Asset Allocation have evolved since the beginning; a crucial insight into what has made them so successful.  So enjoy these truly unique takeaways from my conversation with Michael, David and Marty, and if you would like to listen to the conversation in full, just go to Top Traders Round Table Episode 11. The World's Biggest Neuron Network Niels: Historically, at least, the role price of a market has been the only input in systematic models, certainly in the trend following space. The universe of markets have also been very well defined, being highly liquid, exchange traded, like futures on CME. Tell me, how have you evolved when it comes to the data you use and the markets you trade? David: We trade a lot of equities and we use a lot of other data sources, basically. Niels: What could they be? David: You got me there. (Laughter) Most of the risk is on endogenous variables like price, intra-relationships between markets, and various convolutions of price, sectors, and this sort of thing. Obviously, we have all the balance sheet data, all the fundamental data, all the weather data, there are all sorts of different types of data. We have a lot of experimental systems with small amounts of money on them. I expect we have one or two bigger allocations with key data inputs, but those I'm keeping to myself. Niels: What about you Marty? Are you looking in new directions when it comes to data and markets? Maybe I can follow-up because that's my next point I want to ask, is about are you also moving off the exchange? What's the motivation for doing that and what are the risks you have to take into account if indeed you are? Marty: Well, so the first question is data and the evolution of the trading programs. Of course, we have an appetite for new ideas, new influences on markets, new effects. As David says, "If we knew what the next big thing was we wouldn't tell you and it wouldn't be research."  I think there's a lot of hype these days with machine learning techniques and all this just explosion of new data sources that surely the answer is in there somewhere. If you just leave it to the folks at Google the answer will become immediately apparent. My view is it's a little bit harder than that. There's plenty of work to be done and there's plenty of opportunities. So, I'm not going to claim that we've got some fantastic new system that employs satellite data and engages recursive neural net and presto we know what's happening tomorrow and next week. 'I think all three of us have a healthy paranoia around operating in the markets, and that comes from the real experiences of thinking it was safe when it wasn't safe.' So, no, it is overhyped. On the other hand, it is there. That data exists and there's more information out there than there's ever been, ever. You need to work out how to assimilate, how to digest and how to use that stuff. David: One of the things that experience has taught all of us is danger of hindsight bias or over fitting to data sets. You saw this recently in a rich data set, or maybe 5 or 6 years ago. This Google Trends is a huge and rich new data set, obviously, a vast amount of data using Google's algorithm which forecasts when there are going to be flu epidemics. It made the front page of all the newspapers. It made the BBC News.

On this week’s episode, we discuss the resurgence of ‘boutique’ funds, the new Austrian bond which promises a yield of 1.2% over 98 years, why having new markets to Trade can be good thing, and the differences between Volatility Targeting, versus adjusting overall risk exposure according to market conditions.  Questions answered this week include, should you really trade a strategy that suits you?  What is the ideal sample size when backtesting data, and should you pay attention to valuation when entering a Trending market? (**Due to a technical issue with Jerry’s audio this week, his sound quality is not as good as usual.  Our apologies for this.) You can download your free guide to Systematic Investing, and subscribe to our mailing list by visiting TopTradersUnplugged.com Get a free copy of my latest book "The Many Flavors of Trend Following" here. Send your questions to info@toptradersunplugged.com Follow Niels, Jerry & Moritz on Twitter: @TopTradersLive, @RJparkerjr09 and @MoritzSeibert And please share this episode with a like-minded friend and leave an honest rating & review on iTunes so more people can discover the podcast. Subscribe on: