Top Traders Unplugged

One of the great Investment books of all time is Reminiscences of a Stock Operator, which is the fictionalized biography of perhaps the most famous Financial Speculator of all time: Jesse Livermore. There is no doubt that even today, 100 years later, we can all learn from of the experiences of successful Investors. In this Best of Top Traders Unplugged, which I have appropriately titled Reminiscences of 3 Trend Followers, Michael Adam, David Harding and Marty Lueck, also known as the founders of AHL, finally shed light on one of the best kept secrets of modern finance.  I sat down with them in Abbey Road Studios in London, on the 30-year anniversary of when they founded AHL.  The conversation turned out to be witty, inspiring, and far more entertaining than it had any right to be.  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. Sugarcoating The Medicine Of Trend Following Niels: Now, rightly or wrongly my understanding of Winton and Aspect, in the early years, was that both firms had an emphasis on Trend Following within your strategies. From what I've observed, over the years, this seems still to be the case for you, Marty, at Aspect, but perhaps less so for you David. So let me come to you first on this one, David. If my observation is right, when did you begin to move away from the classical trend following approach, if I can call it that? Also, what was your motivation for doing so? David: It's a question of degree. There's still a fair amount of Trend Following in what we do but when we were doing our research in the early 90s we did a literature review and looked at what else, what other opportunities there were and we scoured the literature. Time and time again we came across academic papers referring to what is now called carry - the phenomenon of carry.  So we focused a lot of our research on that.  We developed a bunch of trading systems which used that and we even got as far as implementing those trading systems. They all went a bit wrong in the ERM - when Sterling exited the ERM. At that stage, we had quite a bureaucratic board process and it had become hard to take risks and so all those systems were taken out. The significance is that they went on and worked very, very well for the next 20 years - as well as Trend Following, actually. So, we didn't use that until maybe 2005 or 2006 or 2007 but it worked extremely well. There were other things that we were developing back then, which also worked, subsequently. They're not in the form that we were developing. There are some things that we developed back then which we still use today. To really fully exploit the potential of this kind of research you have to move into equity markets and it took me a long, long, long time to develop all the infrastructure and expertise to deal with thousands of equities, databases, corporate actions, and so on and so forth. By the time we'd done that the easy money in Convertible Arb was long gone, that was long gone - after 2008 really, with a number of other strategies, the easy money was long gone.  My own pitch is I just don't think the markets... There will never be no opportunities for people to do more research in science. Some people think that we're on the verge of a grand unified field theory of everything, and a grand unified field theory of efficient markets, and I just don't believe that. I know people who say, "Well, what it is then? What is the next big thing then?" Well, I don't know, that's why you have to do research. Niels: Very true. You've stayed true to your roots to a large extent Marty: To degrees, to degrees, Aspect was predicated on this trend following approach being an important utility that was begin overlooked by the investment community.

In this episode, we discuss the recent article from AQR Capital's Cliff Asness on the difficulty of sticking to a strategy through volatile periods, why we may never know if a particular system is broken, the differences between different Trading timeframes, and we give an update on the upcoming live event in New York in October.  We also answer some questions such as:  Is there a ‘Holy Grail’ of Stop Losses?  What is a good way to backtest a Trading system?  Is there a point where too much Diversification begins to negatively affect the return profile in a portfolio?  What are the possible causes that would move a person to Trade a longer timeframe? (**Please note that there was a technical issue with Jerry’s audio this week, and therefore he is only on the show for the first 20 minutes) 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/Macro recap from Niels 2:45 - Weekly review of returns 11:30 - Top tweets AQR Paper Reference: Quant Cassandra 20:30 - Question 1: James; Where can one find more information on stop losses/risk mgmt? Basso Research: How This Random Entry Method Beat The Market Book 1: Van Tharp’s Definitive Guide to Position Sizing Strategies Book 2: Van Tharp’s Trade Your Way to Financial Freedom 28:00 - Question 2: Brian; What software do you recommend for backtesting? 31:50 - Question 3: Paul; Discussion of the multiple facets of diversification 38:00 - Question 4: James; Can there be too much diversification? Article Reference: Wes Gray- Trend Following A Decade of Underperformance & The Epitome of No Pain, No Gain 51:15 - Question 5: Sam; What made Jerry decide to shift to longer-term trading? 55:20 - Performance recap 56:30 - Live event update 10/26/19-10/27/19 Subscribe on:

Today we’re joined on the show by Salem Abraham, a legendary Trend Follower, and President of Abraham Trading Company based in Canadian, Texas.  We discuss if Bitcoin has any real value, how Jerry Parker influenced Salem early in his career (and how he was able to help Jerry), why we don’t need to understand the reasons for a price going up, how looking at your returns too often can affect your performance, if Stanley Druckenmiller and David Harding are right about the effectiveness of Trend Following in today’s markets, and how being exposed to a variety of markets can reduce risk in a portfolio.  Questions answered include: what is Salem’s preferred timeframe to trade in?  Why is there such an increase in Return Dispersion among Trend Following funds today, compared to a while ago? What are Salem’s thoughts on High-Frequency Trading, Electronic Trading, and Arbitrage?  Will Trend Following ever become too over-crowded? 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 • 2:45 - Weekly review including Salem’s thoughts • 15:35 - Salem describes his background and discussion ensues • 47:00 - Top tweets • 1:09:30 - Question: What do you think about the markets being made up of more computers (vs humans)? • 1:30:15 - Performance recap Subscribe on:

On today’s episode, we give our thoughts on the recent Bitcoin rally, the possible benefits of trading single stocks rather than indices, how spending less time looking at the markets can benefit your Trading, and we also offer some other suggestions for better Trading Discipline.  Questions answered this week include: what are the main characteristics of a successful Trader?  How often should you change your parameter combinations?  How short-term did The Turtles trade, and how does that compare to Jerry’s Trading style today?  What is the definition of long-term Trading, and should CTAs be more longer-term in their strategies? 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 @MoritzSeibert, & @choffstein 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:

This week, we’re joined by Corey Hoffstein from Newfound Research, who also hosts the Flirting With Models podcast.  We discuss his journey into Systematic Investing, why the year you enter the markets will likely impact how you invest in the future, and why random returns can actually be worse for your system than bad returns.  Corey explains the term ‘Sequence Risk', why investors should avoid being too short-term, why risk can only be transformed and not destroyed, and if past performance is actually indicative of future returns.  We also get Corey’s views on simplicity versus complexity, how he approaches diversification, and how he invests personally. 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 & Corey on Twitter: @TopTradersLive, @RJparkerjr09 @MoritzSeibert, & @choffstein 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 • 00:00 - Intro including discussion of weekly events and the latest news from the FED • 05:35 - Weekly review • 08:50-  Corey describes his background • 22:00 - Corey breaks down the 3 components of diversification: What, How and When • 35:10 - Question: How do you know when your model is broken? • 42:15 - Question: Do you think TF will continue to work? • 52:00 - Question: What is sequence risk? & Why we should pay attention to it! • 56:50 - Question: What do you mean by risk cannot be destroyed it can only be transformed? • 1:01:20 - Question: How do you convince investors to include TF in their portfolio? • 1:06:45 - Question: Please discuss simplicity, complexity, model robustness, etc. • 1:17:40 - Question: How do you prioritize drawdown management above all else? • 1:21:20 - Question: Why is it easier to predict markets & performance 10 years out...unlike most other things in life? • 1:27:00 - Question: Do you think past performance is a guide? • 1:29:15 - Question from Christian: Do you think more information in models adds value? • 1:33:00 - Question from another Moritz: How do you invest personally? • 1:36:50 - Performance recap Subscribe on:

In the previous Best of Top Traders Unplugged, we went back in time to re-visit some of the key lessons that many investors learned during the Financial Crisis of 2008. It was my way of reminding myself, and you, of something that we as investors must never forget.  Today, Robert Carver goes much deeper into the human psychology that makes us ill-equipped to deal with our emotions in a rational way when it comes to making good investment decisions, and also, how you can overcome this behaviour and make your own plan for financial success.  So enjoy these unique takeaways from my conversation with Robert, and if you would like to listen to the conversation in full, you can go to Top Traders Unplugged Episode 89 and Episode 90. The Hindrance of Human Instinct Rob: ...So I’m genuinely interested in educating people and trying to explain to them that they need to be more realistic. That’s a completely different market place from where you are trying to compete with people who are trying to make the most outlandish claims to stand out from the pack of people making similar outlandish claims. Niels:  I agree with that completely. I think it is evident from reading your book that, that is the fundamental motivation. Now you touched already upon the point about the flawed human brain in your book, and you end up talking a little bit about some of the temptation of taking profits early and letting our losses run, and that’s really how we as human beings are wired. Tell me a little bit more about that and what it really means when it comes to trading if you get this balance the wrong way around so to speak, and what you found when you test this kind of human behavior if I can call it that. Rob:  So the natural human instinct when you see a position rise in price and you're long, is to say… is to want to take a profit. And this comes down to essentially that kind of strong feeling and you want to kind of lock that in. And the reason you want to lock that in is that you want to prove that you are right.  It’s the overwhelming human emotion to prove that you are doing the right thing and it’s called confirmation bias in the literature. Now when its stocks falling, if you sell a loss, then you’re going to be proving that you are wrong and nobody wants to do that. So what you actually then want to do is hang onto that position and hope it goes up in value. And as it keeps falling of course you have the same conversation with yourself until you’re forced to sell and perhaps because you’ve run out of money. So it’s really about the way the human brain is treating unrealized losses and unrealized losses differently. We are thinking about them differently. Even though they’re exactly the same. And you know this kind of mindset that it’s not a profit until you’ve sold it and it’s not a loss until you’ve taken the loss. It’s completely wrong. Now it’s very easy to think about a sort of pattern of price where it would actually make sense to buy on a small profit, and that would be if the market was trading in a small range. Now the problem is that most of the time markets don’t do that they trend. This isn’t the time for that kind of theological argument about whether trend following is a good thing or a bad thing. '...even in the large institutions that trade systematically, you still have debates about whether we should override the system, or cut the system's risk because of something that is going on in the world.' Certainly in the past people like Winton have done tests over hundreds of years of data where it is available, and markets have in the past exhibited a behavior where they’re trending. So if markets are going to trend and this behavior where you’re going to sell at a small profit and cut only when you’ve got a huge loss is exactly the wrong thing to do. You should do exactly the opposite of that, which is what a trend following system will do....

Can the VIX index be traded as part of a successful Trend Following strategy?  Do CTAs have the edge over traditional Hedge Funds by being invested in the less popular markets?  Should some parameters be adjusted according to the market being traded, and can you expect returns from Long Positions & Short Positions to be equal?  We also give our thoughts on MorningStar’s recent ‘Bubble Index’ experiment, as well as Real Vision’s recent interview on the subject of ‘selling volatility’. 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 & @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 2:55 - Weekly review 11:50 - Live event update 10/26/19-10/27/19 13:00 - Top tweets 45:00 - Discussion of Goldman Sachs paper on TF 52:20 - Discussion of Morningstar “bubble” portfolio article 56:10 - Discussion of Real Vision video on volatility  57:00 - Discussion of FT article on South Korea  1:00:00 - Question 1: Ryan; Can the VIX be traded as part of a TF strategy? 1:08:00 - Performance recap 1:09:00 - Next week’s special guest is Corey Hoffstein Subscribe on:

The financial crisis back in 2008 is slowly fading from the memories of investors. But for those of us who lived and traded through it, many important lessons were learned, and usually the hard way.  For many investors, it was a period that can be best described as an Emotional Roller-Coaster, where billions of dollars were lost by investment decisions which were primarily driven by emotions.  In my hope to make sure that these lessons are not forgotten and wasted, I wanted to share a story that I think many of us can relate to.  So I looked through my list of guests to pull a few Golden Nuggets from on this topic, and I thought that Robert Carver, who spent many years at AHL before deciding to share his knowledge about Systematic Trading through his books and blog, would be ideal for this.  So enjoy these unique takeaways from my conversation with Robert, and if you would like to listen to the conversation in full, you can go to Top Traders Unplugged Episode 89. A Solution For Avoiding Irrational Decisions Niels:  I can’t think of a better way to kick things off then by setting the scene, and you reading a little bit of the book in order for people to get a sense of your writing style which I very much enjoy.  So I would kindly ask you maybe to read a little bit of the preface and then a little bit of the introduction to the book, if you don’t mind. Rob:  Sure.  “I’m very bad at making financial decisions. Like most people I find it difficult to manage my investments without becoming emotional and behaving irrationally. This is deeply irritating, as I consider myself to be very knowledgeable about finance. I’ve voraciously read the academic literature, done my own detailed research, spent 20 years investing my own money, and nearly a decade managing funds for large institutions. So in theory, I know what I’m doing. In practice, when faced with a decision to buy or sell a stock, things go wrong. Fear and greed wash through my mind, clouding my judgement. Even if I spend weeks researching a company, it’s still hard to click the trade button on my broker’s website. I have to stop myself buying or selling on a whim. Based on nothing more than random newspaper articles or an anonymous blogger's opinion, but then, like you, I’m only human. Fortunately, there is a solution. The answer is to fully, or partly, systematize your financial decision making. Creating a trading system removes the emotion and makes it easier to commit to a consistent strategy. I spent many years managing a large portfolio of trading strategies for a systematic hedge fund. Unfortunately, I didn’t have the opportunity to develop and trade systems to look after my personal portfolio. But after leaving the industry, I’ve been able to make my own trading process entirely systematic resulting in significantly better performance.” I will now read from the Introduction. "But I hesitated, everything had happened as expected. I should go ahead and buy, but what if this was wrong, what if the financial industry really was imploding as everyone else seemed to think?" “It was the 23rd of January in 2009 and I was in my London office. Although I had a desk overlooking the Thames, I was usually too busy to appreciate the view. My day job was managing a portfolio of systematic trading strategies for a large hedge fund. But right now I was focusing on my own bank balance. Data was about to be released indicating how the UK colony had performed in the last three months of 2008. It would be bad news, the official confirmation that we were in recession, but nobody knew how bad. This didn’t mean extra work for me however, since a bank of computers would adjust our clients’ portfolios automatically when the news arrived. So I decided to devote some rare free time to trade my own money. With a stressful fulltime job, I was not a particularly active trader. But very occasionally,

This week, we discuss the importance of process over outcome, how sports can be related to Trading, and whether mistakes are to be avoided completely or something we should look forward to learning from.  Questions answered this week include: is Ray Dalio’s suggestion of 15 uncorrelated return streams the ultimate way to diversify your portfolio?  Are some markets more tradable for Trend Followers than others? Is market ‘noise’ making it harder for Trend Followers, or is the volatility a good thing? How do you deal with strategic retirement decisions as a Trend Follower? Is it in a Hedge Fund’s best interests to stay relatively small and private? 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 & @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 00:00 - Intro 02:30 - Weekly review 10:15 - Live event update 10/26/19-10/27/19 11:30 - Top tweets 40:30 - Question 1: Jack; When/how do you decide to change a losing TF system? 49:20 - Question 2: Werner; How do you decide not to add a specific market to a TF system? 57:15 - Question 3: Sam; Should investors decrease risk as they near retirement?, and if so...How? 1:24:30 - Discussion of noise vs volatility paper by Michele Cocchiglia & Stefan Martinek of Kelonia Capital Management: Deconstructing Noise - A closer look at the notion of noise, its definition and potential impact in today's market environment. 1:29:00 - Performance recap Subscribe on:

I get a lot of questions about ideas to help build the best Trading Model, and I understand why many aspiring managers feel that this is critical to their future success.  There is though, a lot of truth in the saying: “Most people overvalue ideas and underestimate execution".  What I mean by that is, when you want to start and build a business such as a Hedge Fund or CTA, I’m not so sure that the real challenge lies within the design of your investment approach.  Nowadays, I think that raising the initial funds from Seed or Early investors have actually become the biggest obstacle for new managers. This is something I have a long experience with, and this is why I wanted to focus on it, in today’s post.  So I thought that Kim Bang, who spent many years at a big firm like Bloomberg before starting his own CTA firm, is the perfect person to talk about this.  So enjoy these unique takeaways from my conversation with Kim, and if you would like to listen to the full conversation, just go to Top Traders Unplugged Episode 77 & Episode 78. Growing from Family Clients to Institutional Investors Niels:  Sure. Let's jump to the next topic that I wanted to ask, and I know and realize that you're a small organization. But still, I do want to ask because clearly you have a huge amount of experience in building organizations and running them and so on and so forth. You fully understand what is required in the trading world, so how have you structured your so-called "organization" as it is today with the AUM you have right now? How do you do that and still make it attractive for investors, maybe even institutional investors, to take you seriously? Kim:  Right, so it's not easy, I would say, and I think the reality is, is that if you're going to try to make a go of this business, you need to have some money yourself that you can put up. So, I think that you need a few million dollars that you can put into the business yourself. Maybe you can go to a family member or two, and ask for 1 million or 2, and maybe you have a friend or a business associate from your prior life, and maybe they'll put up a couple of million bucks. So, if you can get out of the gate somewhere around 5, and even better around 10, but I think that's the minimum level where you have to start. I think that you probably can't expect to get any more money from any outside investors for probably the first 18 months. I would think 18 to 24 months is probably the first time, which is around where we are right now. We are getting more inquiries now than ever, and it's from, I would call them, early adopters - but institutional clients. These are probably institutional clients that I would classify as very knowledgeable about this particular industry. So they're very comfortable. They understand the underlying investment strategies, they're very comfortable with the type of trading activity that goes on in these markets, and they understand the risk associated with it and the volatility. "We've been fortunate. Our timing for the launch was pretty good. As I mentioned to you, we're annualizing a little over 19% so far, and our Sharpe Ratio is running around 2, which is very high for historical standards in this space." So, they really understand. They actually like to make investments around this time frame. I think the reason, as you mentioned in your opening commentary, is that we've done some research, and it's very easy to do when you look at the BTOP50 firms -there's about 20 of them in there. It's very clear to see, all of them had their best performance in the first say 3 to 5 years in business, and their average performance was around 20%, which is pretty outstanding. And, by the way, these firms, they launched at all different times, right? It's not like they all launched 30 years ago. Some were 30 years ago, some 20, some 10 years ago, right? So they were fairly well dispersed. But in common,

Is ‘Buy & Holding’ the S&P500 index the perfect investment strategy?  Should you apply Equal-Weighting across all of your Trading positions?  Are long-term strategies the only way to avoid market noise?  Also, we give our thoughts on why you should avoid ‘Fat-Tail Distributions', Volatility versus Risk, how Trend Following strategies tend to ‘melt-up’ rather than crash down, and our upcoming Systematic Investor Series Live Event. 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 & @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 1:55 - Weekly review 6:30 - Live event update 10/26/19-10/27/19; 12 people 9:30 - Top tweets 52:20 - Question 1: Sam- Please discuss equal weighting positions. 1:00:30 - Performance update 1:01:50 - Final thoughts Subscribe on:

Regardless of the investment strategy that you apply to the markets, your strategy or approach needs to evolve over time.  The way we did Trend Following back in the 1970s, 1980s, & 1990s is not exactly the way we do it today, and I think this can be said about most, if not all strategies.  Now with some strategies, the model decay is so rapid, that if you don’t adapt quickly you can lose your edge.  I think short-term strategies are good examples of this.  Trend Following, being a longer-term strategy is, in my opinion, a lot slower when it comes to Model Decay… so you need to have been around for a really long time in order to have witnessed this evolution.   So when I looked through my list of guests to pull a few golden nuggets from on this theme, I thought that Marty Lueck, the co-founder of AHL and Aspect Capital would be the perfect person for this.  So enjoy these unique takeaways from my conversation with Marty, and if you would like to listen to the full conversation, just go to Top Traders Unplugged Episode 37 & Episode 38. How Trend Following Has Evolved Over Time Niels:  What has been the biggest changes over time and is it really small incremental changes, or is there something where you look back and you say in the last 15 years 2008, or 2009, or whatever it might be, we did actually discover something that we would say that was a big upgrade or that was a big find - key finding? Marty:  By and large it is very much an incremental process and we make a virtue of that because you don't want... the last thing we want to do, especially with our focus on institutional investors and a high level of transparency. The last thing you want to do is surprise an investor. With the benefit of hindsight, I highlight two particular features about the evolution of the approach. First, in an odd way... the first, Niels, is the importance of risk management and portfolio construction. I think this is something that investors and maybe managers that haven't been doing it for that long may underestimate the importance of this in the process, and again I'm saying this because I did (laugh). After all of the shenanigans of looking at Chartism and distilling it down into to so fundamental tech models, you come up with a pretty robust diversified set of medium term trend following models, or we did anyway. The neat thing, in the 1980s was the range of markets that have sprung up around us, Niels, afforded us a level of diversification that essentially... the combination of trend following across that range of markets it risk managed itself. You didn't have correlated risk shocks. You didn't have ... there was enough intrinsic diversification that if one sector was melting down you'd have opportunities in another sector. Risk management...I couldn't spell risk at the time. Then a couple of things happen. First of all (I'm going to foreshorten this) you got to an era where I think some of those trend following models became less efficient. You go to an era where markets did become more homogenous, so there's both a sort of macro effect as your pension fund manager in Japan begins to hold a similar looking portfolio to your pension fund manager in Sacramento. Whereas, once upon a time they didn't, it was much more parochial. ''You got to an era where markets did become more homogenous, so there's a sort of macro effect, as your Pension Fund manager in Japan begins to hold a similar looking portfolio to your Pension Fund manager in Sacramento" You begin to get a greater coherence of both investor holdings and then also with the advent of VaR metrics and that approach to risk management, you also got a more correlated response to events, so that everyone around the world who thought they were doing independent things would react in the same way to an event. In response to those kinds of increasing correlations in the markets and increasing propensity for s...

In today’s episode, we discuss whether or not Trend Following is more effective with Volatility Targeting, how cautious you should be of outlier events, how to use stress-levels as an indicator of how good your trading strategy is, and we give our thoughts on the concept of ‘Risk of Ruin’, in relation to the plight of Long-Term Capital management in the late 1990s.  Questions this week include: Should you trade in a style that suits your personality?  Can 10 years of financial data still be classified as ‘noise’?  Should the fundamental causes of market movements affect how you trade?  Should you reduce your position in a trade if it goes in your direction far quicker than expected?  We also touch on Howard Mark’s comments regarding the skill of catching a ‘falling knife’. 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 & @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 how to go from managing personal money to third-party money, in this current regulatory environment. We clear up some confusion surrounding the VIX market, touch on stocks vs commodities & how they affect on Trend Following strategies differently, as well as how to avoid a single driver from overly correlating your portfolio.  We also answer the questions: how do you define long-term versus short-term?  Did Richard Dennis’s Turtles ever add to winning positions? Are CTAs underrepresented at investing conferences, and are investors losing out by only choosing the most common names? 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 & @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:

In today’s episode, we discuss how much central banks or political events, can prevent or create market trends in the future.  We also discuss AQR Capital Management’s recent study on Trend Following performance in the current decade, and whether or not we have seen the end of large market trends. We wonder if technology prevents Commodities from having bull runs like Equities have had in the last decade, and we answer questions on scaling in and out of trades, where to get back-adjusted data, and if the US stock market will eventually stagnate like Japan’s in the 1990s. 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 & Wayne on Twitter: @TopTradersLive, @RJparkerjr09, & @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 - Weekly review 8:45 - Top tweets 37:30 - Question 1: Todd; What are your thoughts on adjusting stops based on price changes/volatility? 45:50 - Question 2: Paul; Have you considered the strength of a trend in your models? 53:05 - Question 3: Brian; How do you scale position sizes up and down based on performance? 1:02:15 - Questions 4/5/6: Sanjay; Aside from central bank (CB) action are there other reasons for the lack of trends in the last decade? If CB action is to blame and continues, will a lack of trends persist? What are indicators to watch to measure overall market trendiness? 1:22:45 - Question 7: George; What are your thoughts on data (back adjusting, roll methods, cleaning, etc.)? 1:30:15 - Performance recap Subscribe on: