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076: Entries, Exits and Trend Following with LarryTentarelli
 
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As traders, we can sometimes get tempted into making things more complicated than they need to be. Entries… Exits… Position sizing… Trade management… There are a number of aspects to trading where we get to decide how simple or complicated we really want to make it. Our guest for this episode, Larry Tentarelli, has developed a simple, no nonsense approach to trading and in our chat he shares the trading insights and approaches he’s developed over the past 20 years. In this episode Larry shares: - Simple techniques to trading and trade management that turned Larrys trading consistently profitable - How traders can overcome the challenges of finding a trading style that suits their personality - The “four legs of a table” approach to trading and why it’s so important for trading success - Why there is no perfect entry signal and the key aspect of trading you should focus on instead PLUS a bunch of listener questions submitted by you!
Views: 6592 Better System Trader
031: Greg  Morris discusses the real meaning of Risk, using Market Breadth and the 'weight of the ev
 
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Greg Morris was Sr. Vice President, Chief Technical Analyst, and Chairman of the Investment Committee for Stadion Money Management, overseeing the management of over $5.5 billion in assets. He has been featured in the media a number of times, being invited to lecture about technical market analysis around the world. He is currently semi-retired, serving as a consultant and working on a few projects, including golf. In this episode we talk about the real definition of risk and how to manage it, the applications of market breadth and how the 'Weight of the evidence' concept can be used in trading. Topics discussed - Why defining risk as volatility isn't accurate and what risk really is - Can diversification actually be used to minimise risk? - Why Rebalancing doesn't make sense - The ‘Weight of the evidence’ concept and how it can be used in trading - Why it’s important to test indicators over non-standard ranges - What market breadth measures can reveal in market tops - Different types of breadth and their applications in Trend Following - Selecting indicators and why diversification of indicators is vital - How often should you tweak your model if something isn't working so well - The current state of the market
092: Trading for a living with Nick Radge
 
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Have you ever dreamed of leaving your day job to trade for a living? Or living a life of freedom – travelling the world or hanging around at home, doing whatever you like during the day while you live off your trading profits? When I first started getting into trading I had this grand vision in my mind of leaving my corporate job, travelling the world, living a life of luxury all supported by my trading profits. It’s a common goal for alot of traders, but getting to that stage can be difficult, and knowing when you’re ready to make the leap can be challenging. I regularly receive emails from people asking questions like: - How do I know I’m ready to trade for a living, - How do I become a full-time trader, - How much money do I need, - What other factors do I need to consider before taking this step. The guest for this episode, Nick Radge from The Chartist, has an extensive trading history and also mentors other traders. He’s in a great position to answer all of our questions on trading for a living, so that’s what he’s going to do for us today, plus… … he’s also going to share some honest advice that all traders need to hear before taking the step to ‘trading for a living’.
124: Managing Trades with Linda Raschke
 
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Trade management is a critical component of a trading strategy. It can often be the difference between a profitable trade and a loss… However many traders focus on the entry only and leave trade management as an afterthought. In episode 49 of the podcast, Linda Raschke, said “trade management is probably the most neglected area of system development”. In that episode we focused on Linda’s approach to modelling the markets but in this episode Linda is back to discuss trade management and exits, including: Why trade management is such a neglected aspect of trading, How to model different types of exits and the impact of market environments, How volume and breadth measures can give clues to the tone of the market, and How to use the power of relative strength to target the best markets to trade.
Views: 3159 Better System Trader
020: Larry Williams shares tips and insights from 50 years of trading.
 
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In this weeks episode Larry Williams discusses conditional trading, understanding what drives prices, the misuse of indicators and how to apply them correctly. We also discuss cycles, forecasting markets, what to look for in market tops plus loads of listener questions where Larry shares tips and insights from 50 years of trading. Topics discussed: - What it means to be a conditional trader - Why buy and sell signals need to be analysed in the context of market conditions - Fundamental factors that drives markets - Interpreting the COT reports correctly - The buying differences between retail and commercial traders and how it can indicate future market direction - Why you should approach trading like a combination lock - Coming up with unique indicator ideas - The mis-use of indicators and how to use them correctly - Trading styles of successful traders - Forecasting markets based on technical factors - Characteristics of stock market tops and bottoms - The fundamentals to watch during market tops Listener questions: - Issues with the Forex market - Trading prices patterns, do they still work and are they scalable - Why short term price patterns work - What happened in 2002 and why you need to consider that when backtesting - Will trend trading always be effective? - How many positions to trade at one time - Money management tips for those who aren't into heavy maths - Choosing the best markets to trade - Favourite Larry Williams indicator - What keeps Larry motivated to trade after 50 years - What drives peak performance (it’s not money…) - The key component that really drove Larry to becoming a consistently successful trader - How Larry lasted so long in the industry - How to overcome emotions when entering or holding trades - Larry’s biggest contribution to the trading industry - Why Larrys strategies have lasted the test of time - Common traits against the most successful traders - The trading model that’s worked for Larry for over 50 years -uploaded in HD at http://www.TunesToTube.com
Views: 12448 Better System Trader
009: Gary Antonacci discusses the different types of momentum and how they can be used in a strategy
 
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Gary Antonacci discuss all things momentum; the different types of momentum and their individual applications, how they can be combined, how momentum can be refined, the benefits and challenges of momentum, why momentum works and much more. Topics discussed The different types of momentum and their use How to combine them for better performance How Dual Momentum protects in a bear market The benefits of Dual Momentum The impact of lookback periods and rebalancing Using Dual Momentum with other asset classes Reducing the impact of mean reversion in stocks Why momentum works and is likely to continue working in the future -uploaded in HD at http://www.TunesToTube.com
Views: 1572 Better System Trader
049: Linda Raschke on trading edges, modelling markets and day trading techniques.
 
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Trading edges come and go... In an industry with such a low survival rate, what does it actually take to not only survive, but thrive, over an extended period of time? The guest for this podcast episode, Linda Raschke, has been trading for over 35 years. She traded for several hedge funds before starting her own, ranking 17th out of 4500 hedge funds by Barclays Hedge for 'Best 5 year performance'. She's experienced a large number of changes in the industry, some of them huge, but she’s managed to adapt and continues trading even today. Linda stands out from the crowd for three factors: Performance, Longevity and Consistency, so what does it actually take? What has she learnt over the years and what can we do to improve our own chances of performance, longevity and consistency? In our chat with Linda we discuss some of the changes over the years and the impacts on trading. We also hear about her approach to modelling the markets, understanding market behavior, trade management, day trading techniques and some fantastic questions submitted by fellow listeners. Make sure you don’t miss those! Some key points we cover: • Changes in the markets over time and the impacts that has had on strategies and their performance • How to use modelling to identify market behavior and edges • AI, machine learning and neural network techniques • Tips and factors to consider when daytrading • Reading market behavior throughout the day • PLUS loads of great questions submitted by Better System Trader listeners!
Views: 10151 Better System Trader
024: Trading coach Dr Van Tharp discusses beliefs in trading, why traders fail and market types
 
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In this episode Dr Van Tharp talks about beliefs and their impact on trading, the qualities of successful traders, adapting trading to market types, position sizing, trading mistakes and overcoming fear, perfectionism and impatience. Topics discussed - How Van got started in the markets and the issues he faced initially - The main reasons the majority of trades are unsuccessful - How traders can identify the type of strategies that suits them - What it means to trade your beliefs in the market - How to assess whether your beliefs are useful or limiting - The real importance of psychology in trading - Your collection of parts and how they interact - The process of transformation in a trader - Qualities of losing traders and how to test yourself for them - The impact mistakes could be having on your results without even knowing - How to cope with larger trade sizes as your account grows PLUS listener questions on: - Using position sizing to meet your objectives - The 6 market types, how to measure them and how to apply it to your trading - How to find positive expectancy systems - Developing patience when in a trade - Trading in short timeframes - How to address issues with perfectionism - Systematic vs Discretionary trading - Overcoming fear of pulling the trigger - Handling drawdowns -uploaded in HD at http://www.TunesToTube.com
Views: 7249 Better System Trader
011: Ralph Vince talks position sizing, optimalf, trading horizon, diversification and risk.
 
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Ralph Vince talks about position sizing, how to choose a position sizing model that suits you, optimalf, the curve and how it can be used for maximum growth and other applications. The risk of multiple strategies in a portfolio and how to manage it, dynamic position sizing, martingale strategies and how Ralphs views on money management has changed in the past 25 years. -uploaded in HD at http://www.TunesToTube.com
Views: 3491 Better System Trader
004 Nick Radge discusses system design, the best trading systems and what makes successful traders.
 
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Nick Radge discusses system design, the best type of systems to trade, how observations can lead to better strategies, the best way to handle a bear market, measuring system performance, survivorship bias and the difference between successful traders and everyone else. Topics discussed: The trading style most people should try first Systematic ways to determine a trend Why simple systems are the best Why broker consensus is a poor indicator The best type of stocks for trend following strategies What you need to know about a system to be able to handle the drawdown How observations can lead to better strategies Why buy and hold offers average returns and the best approach to handling a bear market How trading can take less than 5 minutes per day Measuring the performance of a system The difference between very successful traders and everyone else The types of survivorship bias that could be ruining your backtest results The warning signs of over-optimisation Coping with drawdown and personal doubts 2 basic strategies you can start testing today! -uploaded in HD at http://www.TunesToTube.com
Views: 3102 Better System Trader
037: Cesar Alvarez discusses a quant study on the types of stop losses; which are best?
 
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In this episode we’re discussing the results of a quantitative study on stop losses completed by Cesar Alvarez of Alvarez Quant Trading. Cesar was also a guest of the show way back in Episode 3. Cesar was director of research for Connors Research for almost 9 years, developing quantitative trading models for individuals, prop traders and hedge funds. In this episode he’s going to share the results of a quantitative study on stop losses, also testing out some common pieces of trading advice to see if they're actually true. Stops can have such a huge impact on trading results so I'm sure traders of all levels will find this research invaluable. We will be discussing backtesting results and some charts. We'll do our best to explain them for those who are listening along but if you’d also like to see the results while we discuss them, you can download a copy or even watch as a video in the sections below. I hope you enjoy Cesars discussion of ‘Stops - the Good, the Bad and the Ugly’. In this episode we discuss - Different types of stop losses, their application and performance results - Percentage vs Volatility based stop losses - Intraday vs End of Day stop losses - Trailing stops vs Targets - Some common trading statements that are often assumed to be true and the results of testing them - do they hold up? - The levels of Stop knowledge, which level are you at?
Views: 2153 Better System Trader
046: Perry Kaufman on building algorithmic trading strategies
 
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I’m sure we all want to create trading strategies that perform better and last for longer but there are a number of issues we need to look out for when developing robust trading strategies, some are well-known and some perhaps aren't. In this episode we’ll be talking with Perry Kaufman about strategy development and more specifically some of the issues that can catch us out when creating trading strategies. Perry raises some interesting points about optimization that may not be well known plus he shares loads of tips to creating more robust strategies. Perry writes extensively on markets and strategies, having published fourteen books and has just released a new book on building algorithmic trading strategies, which we'll be discussing in this episode. He has worked and consulted to a number of successful CTA, investment and prop trading groups, creating systematic trading and hedging programs. This is also his 2nd appearance on the podcast, appearing as a guest way back in Episode 10. Topics discussed - The most robust type of systems - How your choice of optimization values could be misrepresenting your results and how to choose parameters that give a more accurate picture - The mistakes traders make when analyzing optimization runs and tips to doing it properly - How to really determine if a new trading rule is robust - Reducing risk by using multiple parameters - What the number of profitable runs in an optimization can tell you about the robustness of a strategy - Why diversifying across strategies instead of across markets could be a better approach - The challenges of building robust strategies using - Genetic Algorithms and Neural Networks
Views: 1928 Better System Trader
002 Brent Penfold discusses trading principles, money management, risk of ruin and trading
 
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In this episode with Brent Penfold we cover fundamental topics that impacts traders of all levels, from beginner to advanced. We talk about some of the psychological issues traders face, the principles all traders need to accept to be successful, that elusive Holy Grail of trading and an extremely important mathematical concept that can identify if you’re going to blow up your account, so don’t miss that. The guest also provides actionable tips and tricks to overcome these issues along with a simple method to determine if a strategy is broken, which could save you lots of money and stress. Topics discussed: How to trade 24 markets actively and be finished by 9:30am The simple reason why most traders fail The principles all traders need to accept to be successful The one mathematical measure that can tell if you'll blow up your account - don't miss this! The Holy Grail The most important aspect of trading How to remove hope from your trading How to combat greed The impact fear can have on your trading and a hot tip to overcome it A simple method to determine if your strategy is broken, this tip could save you loads of money! -uploaded in HD at http://www.TunesToTube.com
Views: 2343 Better System Trader
103: A brand new, more responsive indicator  with John Ehlers
 
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Indicators often form a large part of trading systems, however there are a number of issues caused by indicators that can result in under-performing trading strategies, like: - they’re reactive, instead of predictive, - they have alot of lag, which means they’re slow to respond to the markets, and - they can often give you a signal too late so you’ve already missed some of the move or even a large part of the move! Today we talk to John Ehlers who is going to share with us a brand new indicator that he’s developed that overcomes alot of these issues. This new indicator: - Minimises lag, - Is very responsive to the market, and - Gives a fast indication of turning points. Plus at the end of the chat we share how you can get a FREE copy of this new indicator to try it out for yourself.
Views: 1451 Better System Trader
077: Choosing the right type of exit
 
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In the previous podcast episode with Larry Tentarelli, we opened up the opportunity to submit questions for Larry and received quite a few pages of questions. Surprisingly, a large portion of the questions were about exits. Why are exits so hot? I actually asked Larry why he thought exits were such a hot topic and he suggested that perhaps exits are an area that people really struggle with. This got me thinking about exits more and I recalled an interesting point that Murray Ruggiero made back in episode 42. I think Murray raised a really important concept which most traders may not even consider when they’re looking at exits and specifically how to choose the best type of exit for your strategy, which we’ll get to in just a sec. How do you choose the right exit? Larry was kind enough to share his philosophy behind exits but you may have noticed that he didn’t give exact details about them, which I think was intentional because it’s something that traders really need to figure out for themselves. So then how do you go about choosing the best type of exits for a strategy? Let’s take a listen to Murray answering a question from a listener about the impacts of exits on strategy performance.
063: Market Regimes with Alan Clement
 
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Most trading strategies have an optimal type of market condition where they work at their absolute best, so having an understanding of market conditions and being able to detect and adapt to them can really have a huge impact on trading performance. But how can we measure market regimes properly? What techniques can we use to find that delicate balance between stability and reactivity so that it improves performance rather than reduces it? Our guest for this episode, Alan Clement, has completed considerable research into market regimes and is going to share his knowledge with us today! Alan is a Certified Financial Technician, full time independent trader, quantitative trading systems designer and private investment consultant. In our chat today, you will learn: - Market regimes – what they are and how they can impact the performance of your trading strategies - The different types of Market Regimes and key aspects to consider when defining them - Indicators, market breadth and intermarket measures – which ones are the best for detecting market regimes?
036: Michael Bryant on automatic strategy creation, trade dependency and trading the equity curve.
 
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Creating robust trading strategies can be a difficult task, sometimes taking months or even years to generate something you find acceptable. Even then, once you start trading it live there is no guarantee it’ll work in the future. With strategy creation being such an involved process at times, how would you like it if you could just tell the computer the results you wanted and let it figure out the trading rules? Is it actually possible to create robust trading strategies that way? In this episode Michael Bryant from Adaptrade talks to us about automatic code generation, methods to exploit trade dependency and techniques to trade the equity curve. Michael has been trading the markets since 1994, providing trading systems for the futures markets and even managing money as a CTA. He is founder of Adaptrade, a company which provides innovative software tools for individual and professional traders. In this episode we discuss: - The traditional approach to creating trading systems and issues caused by this approach - Potential areas of improvement in traditional approaches to system development - Evolution of the strategy creation process - Genetic programming and optimisation and it’s use in trading strategy creation - The advantages of automatic code generation - Measuring and reducing over-fitting when using genetic optimisation techniques - Addressing concerns with removing human logic from the strategy development process - Degrees of freedom and the impact if can have on strategy results - Trade dependency, how to detect it and methods to exploit it - Trading the equity curve based on trade dependency and trading style - Which stage of the strategy creation process to include position sizing - Common position sizing mistakes traders make
013: Hedge fund manager Andreas Clenow discusses trend following in stocks.
 
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Andreas Clenow is a hedge fund manager who specialises in developing and trading quantitative strategies across all asset classes. Before joining the hedge fund world by establishing his own hedge fund he maintained Global Head positions at Reuters and Equis International. He is the author of two books, the first being international best seller ‘Following the Trend’ and the second ‘Stocks on the Move’ has just been released. In this episode Andreas talks about trend following in stocks, why traditional approaches don't work and what you can do to account for this. We also talk about trading concepts, cash vs risk allocation, position rebalancing and building robust strategies. Topics discussed - The origins of trend following and why a traditional trend following approach doesn't work on stocks - Why it’s a bad idea to think in terms of cash allocation and the solution - Position rebalancing, why, how and when - How hedge funds look at position sizing compared to retail traders - Why pyramiding positions doesn't make sense - How to get a more realistic understanding of performance results than just a backtest report can provide - How a random number generator can beat the mutual funds - How to ensure you strategies are robust and not curve-fit - Handling large losses or periods of drawdown - The role of critical thinking in trading -uploaded in HD at http://www.TunesToTube.com
Views: 2974 Better System Trader
044: Short selling, bear markets, trading edge, position sizing and trading psychology.
 
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Back in Episode 32 we had a chat with Laurent Bernut, a systematic short seller who spent years working in the Hedge Fund world specializing in short selling strategies. He shared loads of knowledge with us in that episode but we actually had a lot more to talk about. We ran out of time back then so in this episode we’re going to continue with the chat, covering a bit more on short selling, including common problems and mistakes traders make when short selling, the 5 psychological stages of a bear market, how these stages manifest in market behavior and where we are now. We also chat about his Convex position sizing model, visualizing your trading edge and how to tilt it more in your favor PLUS he shares with us a special trick to switch our minds from a flight or fight mode back into a state of flow. We also have some great questions submitted by podcast listeners so listen out for those. Topics discussed - Common problems traders face when short selling - When to never short a stock - The 5 psychological stages of a bear market, how they manifest in the markets and where are we now? - How Laurents Convex position sizing model adapts position size differently in periods of performance and drawdown - Visualizing your trading edge and tilting it in your favor based on trading style - The main components of a short trading strategy - Why a break of support is often not the best place to enter a short trade and what to do instead - A simple ‘jedi mind trick’ that switches your mind from fight or flight into a flow state
021: Tim Rea, trading champion, discusses how he trades 100+ strategies
 
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Tim Rea is a proprietary trader, trading his own money with well over 100 automated systems across 25 different Futures contracts. He is a past winner of the World Cup trading championship, along with being a CTA and broker but gave that away to focus on trading his own money. In this weeks episode we discuss various aspects of trading multiple strategies, including monitoring performance, money management, correlation, technology and trading in markets not in your timezone. We also discuss the impacts of the MFGlobal and PFG collapses and how Tim overcame the heavy losses to continue trading. Topics discussed - How poor experiences investing with others drove Tim to figure it out for himself - Becoming a systems vendor, CTA and broker and why he then left it all behind to just trade his own money - How shorter term trading can increase confidence in a system - How many strategies he’s currently trading (hint: its more than 100!) - Keeping track of the performance of multiple strategies - Why you shouldn't just stop trading a system when the drawdown is larger than it has been historically - Why you should try to understand the underlying reasons for strategy drawdown - Considerations when adding more strategies to a portfolio - Managing correlations with multiple strategies - Position sizing when trading multiple systems - The benefits of trading a portfolio vs trading an individual method - How to manage trading in markets not in your timezone - The impact of the PFG collapse and how Tim overcame the heavy losses - Lessons learnt from dealing with MFGlobal and PFG collapses - How to manage your trading account to minimise risk of loss in another collapse - The benefits of trading Forex - How Tim won the World Cup Trading championship trading just the EURUSD - The importance of vision in your trading business -uploaded in HD at http://www.TunesToTube.com
Views: 1429 Better System Trader
050: The work of Nelson Freeburg and what we can learn from his approach to model development.
 
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Nelson Freeburg was the editor of Formula Research, a newsletter that developed systematic timing models for the stock, bond, and commodity markets. He was also a research consultant working with institutional money managers to design proprietary timing models. Nelson had been an active trader since 1980 and occasionally spoke about his work to audiences around the world. In this episode, Linda Raschke shares memories of Nelson, his approach to model development and what we can learn by studying his work. Topics discussed - Timing models and the components Nelson used in his models - Russell growth vs Russell value model - Out of sample testing and sample size - Why Nelson focused so much on reducing drawdown - Nelsons biggest strengths in modelling and what we can learn from his approach - Voting systems - The benefits of overlaying models
018: Scott Andrews 'The Gap Guy' shares his expertise in trading opening gaps
 
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Scott Andrews 'The Gap Guy' shares his expertise in gaps, why they work, what factors to take into account when trading gaps and what to avoid. We also discuss gap zones, when to fade and when to follow and calculating stops and targets. PLUS, for those that aren't into Gap trading, we cover some important concepts that can impact all styles of trading, include one concept called 'Ensemble Systems' which may just change the way you look at trading strategies. Topics discussed - Why it’s important to trade a style that matches your own strengths rather than follow someone else - Why gap trading works - Markets where gaps work best and those that don't - The best type of stocks to trades gaps and the stocks to avoid - The benefits of trading gaps in indices vs stocks - The 3 market conditions to look at when analysing a gap - How seasonality impacts gap trading - Signs of gaps to avoid - Using ATR to determine the probability of gap size closing - Gap zones and how the location of the gap can provide useful information - The worst performing gap zone - The psychology of certain gap zones and why some work better than others - When to fade the gap and when to follow it - Calculating stop and profit levels based on gap characteristics and market conditions - How to determine if a target should be a full gap close, partial gap close or an extended target past gap close - The impact of QE on gaps - How to combine systems into Ensemble Systems for an interesting view on trading strategies -uploaded in HD at http://www.TunesToTube.com
Views: 2039 Better System Trader
025: Dr Brett Steenbarger discusses creativity, day trading and requirements to trading success
 
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Dr Brett Steenbarger discusses the importance of unique trading ideas, increasing creativity, the challenges of daytrading and tips to overcoming them. Topics discussed - Three important components of successful traders - Why the traditional rules of trading need to be updated - Why traders get stuck in static thinking and need to be more like entreprenuers - The two different types of trading brains and how understand which we are can improve our results - How creativity can be used in the strategy research process - Why we come up with ideas at seemingly random times and how that can be harnessed to improve our trading - The two stages of creativity and how traders are hurting their performance by neglecting the second stage - How just immersing ourselves in the market without stepping back can be harming our performance - Improving creativity through lifestyle - Why unstructured free time away from the markets can improve your trading - Techniques to turn creativity into a habit - How Brett identified his strengths and used those to dictate his trading style - The challenges of daytrading and how to approach them - Analysing successful trades to improve performance - Why we need to have something more important in your life than trading PLUS listener questions on: - Applications of diffusion indices - Formalising edges and the impact of market regimes on edge performance - How traders can follow their rules about stops and targets - The psychological differences between systematic and discretionary trading - The validity of Acceptance Commitment Therapy (ACT) in trading - Handling drawdowns and turning it into a constructive experience - How to move from retail trader to full-time/pro -uploaded in HD at http://www.TunesToTube.com
Views: 3041 Better System Trader
148: Plugging holes in strategies and portfolios with Ryan Moffett
 
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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!)
146: Using Indicators To Predict Stock Movements with John MacLeod
 
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Predictive modelling is used in many aspects of our lives today.. in the banking and insurance industries to assess the risks and behaviours of customers… in marketing to anticipate customer purchasing behaviours… in meteorology to forecast the weather… in fact there are too many applications to list here but predictive modelling has the potential to be applied pretty much anywhere, even in the markets. Now you may be saying ‘wait, I’m not in the business of predicting, my trading is all reactive, I don’t predict, I just follow the markets’. I’m not going to go into that argument today but before you make any decisions or judgements about this episode I invite you to take a listen because we discuss the predictability of indicators, and some of the things you’ll hear in our chat about indicators are very interesting, no matter how you use them in your own trading. Our guest for this episode is John MacLeod. John has a background in using Predictive Modelling, working as a consultant to develop predictive models in consumer banking and mass marketing, and has applied this expertise to the stockmarkets as well. Some of the things you’ll discover in my chat with John are: - Predictive modelling – what it is and how can it be used in trading to select stocks that may be setup for a big move, - Using indicators as predictors and 3 major conclusions John has made by analyzing the predictability of 160 indicators – these results may surprise you! - The accuracy of predictive modelling, which factors can impact accuracy and the easiest time periods to produce high accuracy predictions, - How data derived from indicators can actually be more effective as predictors then the indicators themselves, - Plus much more.
073: Combining simple concepts to build robust strategies with Art Collins
 
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Our guest for this episode is Art Collins. Art’s story is interesting because in his younger days he was an expert card counter in black jack, and he’s translated some of those skills into building robust trading strategies from really simple market concepts. Not only is Art a trader but he’s published a number of books and magazines articles, he’s done lecturing, both online and offline so I’m sure you’ve seen his name around the place and it’s an honor to have him here on the show today. In this episode Art shares: - How to combine simple market concepts to create robust trading strategies - The four rules of system development to reduce over-optimization - Simple ways to improve the statistical reliability of -our strategies - What traders can learn from Arts experiences being an expert card counter in black jack
Views: 1080 Better System Trader
Webinar - How A Strategy Factory Can Help You
 
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ARE YOU TIRED OF CREATING "TERRIFIC" BACKTESTS THAT COLLAPSE IN REAL TIME TRADING? DO YOU FIND YOURSELF IN THESE SITUATIONS? • Have you ever bought or developed a terrific looking trading system, only to lose money trading it? • Have you had a trading idea, but were unsure how to determine if it really had an "edge?" • Do you evaluate all your trading systems differently, testing some to death, but trading others with real money after only minimal testing? • Do you ever find yourself struggling to think of new trading ideas? Here is a webinar with World Cup Trading Champion Kevin Davey, discussing how the concept of a Strategy Factory can resolve these issues. For more details, visit: bettersystemtrader.com/aussieworkshop2015 OR bettersystemtrader.com/strategyfactory
040: Larry Williams discusses the methods and applications of Algorithmic Forecasting
 
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Larry Williams has been a guest of the podcast before, sharing insights from 50 years of trading in Episode 20. In 1987 he won the World Cup trading championship, turning $10,000 in to over $1.1 million in 12 months. He is a published author, with a long list of best-selling books and has also created a number of market indicators including Williams %R, Ultimate Oscillator, the Williams Accumulation/Distribution Indicator, COT indices, cycle forecasts, market sentiment and value measures. In this episode we’ll be discussing algorithmic forecasting, the methods and applications of forecasting, cycles and seasonality, plus some forecasts for the markets in 2016. In this episode we discuss: - Why algorithmic forecasting can be so interesting and so challenging - Is forecasting just an academic exercise or can it actually be applied to real trading? - The difference between Larrys forecasts and others made in the media - How past cycles can project what may happen in the future - How Larry actually generates forecasts based on past market behaviour - Factors that can make forecasts inaccurate and why some factors aren’t even considered when forecasting - How the forecasting process has changed over the years - Forecasts for the Australian and US markets in 2016 - Which factors have the best forecasting ability
034: Jay Kaeppel discusses seasonality, how it can be integrated into a trading model, applications
 
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Jay Kaeppel has over 25 years experience in the financial markets. He has worked as the Head Trader for a CTA and published a number of popular trading books on Futures, Options and Stock Market Seasonality. He also spent a number of years writing a weekly column titled “Kaeppel’s Corner” and publishes on his blog “Jay On The Markets”. He is now Portfolio Manager for Alpha Investment Management, offering strategies such as the ‘Alpha Multi-Income Strategy’ to investors. In this episode we discuss a number of seasonal tendencies, how they can be integrated into a trading model, the applications of the Known Trend Index and the reasons why most traders fail. Topics discussed - The Santa Claus rally - what it is and how to trade it - How to use seasonality to complement other models - Seasonality tendencies around holidays - Monthly seasonal tendencies and a simple monthly seasonal system that vastly outperforms stock index returns - Boiling down the trading process into 4 simple words - Using leveraged ETFs for seasonality trades - The worst performing month of the year (it’s not October) - Converting seasonal tendencies into a trading model - A simple seasonal sector system that takes only 6 trades per year - Diversification vs Specialisation and the impact it can have on trading and drawdowns - Are seasonal trading strategies just data mining? - The Known Trends Index (KTI) and how it can be used in trading - Why most traders fail
Views: 1097 Better System Trader
006 Dr Howard Bandy talks system development
 
50:35
In our chat with Dr Howard Bandy we talk about major changes occurring in the fields of trading system development, trade management and technical analysis. We also discuss why trading is becoming increasingly difficult, what causes trading systems to experience periods of poor performance, how to identify and manage a trading system when it is out of sync with the market and the 2 most important skills in system development. Topics discussed The major changes occurring in the fields of trading system development, trade management and technical analysis Why trading is becoming increasingly hard How to compete with the professionals What causes trading systems to experience periods of poor performance How to identify and manage a trading system when it is out of sync with the market The shift towards machine learning and pattern recognition The importance of data mining in the system development process The 2 most important skills in system development -uploaded in HD at http://www.TunesToTube.com
Views: 2642 Better System Trader
010 Perry Kaufman discusses market noise, price shocks, volatility and the Information Ratio
 
01:13:35
Perry Kaufman discusses market noise, the impact it has on trading styles and how it can be used to determine which strategies suit a particular market. We also talk about price shocks and how to mitigate their effects, how to use volatility in your favour, volatility parity for position sizing, the information ratio for strategy performance and some strategy ideas you can test yourself. Topics discussed How market noise impacts trend following and mean reversion The effects of money flow during a crisis The types of strategies that work best in new markets and why How the efficiency ratio can be used to determine the best type of strategy for a market The best markets for trend following and mean reversion What strategy style to choose if you're just starting out Using Volatility Parity for position sizing Impacts and dangers of price shocks on backtesting and how to handle them Mitigating the risk of price shocks Using the Information Ratio to measure strategy performance and detect possible over-fitting The effects of volatility on strategies and how to use volatility in your favour Fractal Geometry High Frequency Trading And some strategy ideas you can test -uploaded in HD at http://www.TunesToTube.com
Views: 2143 Better System Trader
134: Constructing a strong portfolio for higher returns and lower drawdowns
 
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The Petronas towers in Malaysia are the tallest twin towers in the world at 452m (1483 ft) tall. Because of the ground underneath the building site, they had to put in some deep foundations, up to 114m (374 ft) deep. Without these deep foundations, the building would run into problems. In fact, during construction, at around the 72nd floor, they discovered that tower 2 was leaning 25 mm (0.98in) from vertical, so to correct that lean the next 16 floors were slanted back the other way. They even hired specialist surveyors to check the lean of the tower twice a day until the building was completed. Now obviously the foundations anchor the building and keep it from falling over, and even though they’re not visible, they’re probably the most important part of the construction. When you look at constructing a portfolio of strategies, there are a couple of key concepts, or foundations to consider as well, so that you have a solid portfolio, one that will hopefully weather all types of hostile conditions and produce higher returns with reduced drawdowns. In this weeks Trading Thought we’re going to hear from 2 guests, who will explain how they construct portfolios and some mistakes that traders sometimes make during portfolio construction, which you need to be aware of. Take a listen as we start with Gary Hart from Trendfinder Trading Systems explaining the benefits of a portfolio of strategies and we take it from there.
100: Ask Jack Schwager
 
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Jack Schwager returns to answer all your trading questions. Jack is a well known expert in the industry, working for some of wall streets leading firms and is also one of the founders of FundSeeder. Plus, he's the author of the best-selling series of 'Market Wizards' books, which I'm sure most traders on this earth have read! In this 2nd part of our chat with Jack, he answers all of the trading questions you submitted (well most of them anyway, unfortunately we didn't have all day to talk!) Plus, to celebrate the milestone 100th episode, we've got a huge giveaway worth almost $20,000. Listen along for more details on the prize and how to enter.
Views: 1291 Better System Trader
017: Jerry Parker, CTA, from the Turtles trading group shares 30+ years of trading experience
 
54:35
Jerry Parker talks about trend following, how to approach wins and losses, dealing with drawdowns, managing correlations in asset classes and how changing market dynamics have impacted trend following and the solution. He also gives us some tips on systematic trading including how he trades without relying on optimal values of the past. Topics discussed - What types of characteristics Dennis and Eckardt were looking for in the Turtle traders program - How the Turtles were taught to approach losses - Common traits amongst the most successful Turtles - The hardest part of trading as a Turtle - How Jerry overcame the fear of taking trades - The biggest lesson being a Turtle - What Jerry did with the Turtles approach after the program ended - The impact managing other peoples money can have on trading - The key factors that make trend following work - Managing correlations between asset classes - Long-term vs short-term trend following - Dealing with drawdowns - How changes market dynamics have impacted trend following and solutions - How to diversify to lessen the impact of any one parameter - How to trade without relying on optimal values of the past PLUS questions submitted by listeners: - The difficulties in knowing when to adjust strategy parameters - Adjusting your system for whipsaws - Tips to avoid data mining - Do the Turtles systems still work in the todays markets? - Are there any markets where the strategies no longer work? - Short versus Long trades - Overcoming emotions in trading - Biggest mistakes and the lessons learnt - What todays Turtle program would look like -uploaded in HD at http://www.TunesToTube.com
Views: 3460 Better System Trader
027: Dr Gary Dayton discusses Mindfulness and how it can improve your trading
 
01:01:25
Dr. Gary Dayton has been an active trader since 1999 and is President of a consulting firm that specializes in developing “peak” performance in traders. His approach to trading psychology is very different to the traditional approaches used by other trading coaches, introducing traders to the practise of mindfulness to not only overcome fear and other unwanted trading emotions but to develop the concentration and focus needed to trade successfully. In this episode we discuss why traditional approaches to controlling emotions don't work, the role of emotions in trading and how mindfulness can improve trading performance. He also shares some tips on how to get started practising mindfulness, the benefits it can have outside of trading and how the approach of Mental Parking can increase focus. Topics discussed - Comparisons of sports and trading performance - Traditional approaches to handling emotions in trading and why - they don't work - Why it’s impossible to suppress your emotions - Landing a plane in the Hudson River and what the Captains response teaches us about trading The role of emotions and how experienced traders actually leverage emotions in trading - The concept of Mindfulness and the benefits to traders - How to use Mindfulness when trading - The evidence that Mindfulness can improve trading performance and how it impacts the brain - How to get started practising Mindfulness - How to use Mental Parking to increase focus and productivity - How exercise can improve mental and trading performance
Views: 4639 Better System Trader
054: From trading ideas to robust strategies - highlights from episodes 21-40
 
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To prepare for the previous episode on system trading through the Brexit, I had to dig through some of the past podcast episodes for background information. As I was going through them I realized there was so much great information there, some that I had already forgotten about. Such a shame, all that valuable trading information just sitting there, waiting for our attention, so I thought it must be time to pull out the highlight reel from past episodes. Here’s the plan… Last year, we did a podcast episode with highlights from episodes 1- 20. Today, we’re going to share lessons and highlights from episodes 21-40. Here are some of the topics we’ll be sharing with you: - How to never run out of trading ideas, - The importance of creativity and a simple technique to increase 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!
098: When is a strategy ready for Live trading?
 
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It can be really interesting and exciting to research the markets and test different ideas but at some stage we need to decide if the strategy is ready for live trading. Some traders can get stuck endlessly researching… Trying to find that perfect system… Which comes at a cost. - How do we avoid getting bogged down in research? - How do we know when a trading strategy is actually ready for trading? Let’s listen to Kris Longmore from Robot Wealth explain his approach to determining when a trading strategy is ready for live trading.
127: Building Mean Reversion Trading Strategies with Cesar Alvarez-Part1
 
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We’ve got something special organised for you here… This is the 1st episode in a special 2-part series on building Mean Reversion trading strategies. And to discuss Mean Reversion we have a special guest, someone who has been on the podcast before, a couple of times already – Cesar Alvarez from Alvarez Quant Trading. Those of you who know Cesars work would be aware that he is a Mean Reversion specialist. He has a wealth of knowledge on Mean Reversion trading that he’s going to share with us over this special 2-part series, so I’m really excited to be sharing it with you. In this first episode Cesar will be sharing: - The high level steps to building a mean reversion trading strategy, - Why carefully selecting a trading universe is so important and the factors you need to consider, - Simple but highly effective techniques to measuring mean reversion you can start testing today, - How to combine indicators properly to identify better quality trades, and - Why strategies with a smooth equity curve may not actually be the best strategies to trade in the future.
Views: 1105 Better System Trader
032: Laurent Bernut discusses Short selling, Bear markets, exits and forex trading.
 
59:10
Laurent Bernut was a systematic short seller with Fidelity for 8 years. His mandate was to underperform the longest bear market in modern history: Japanese equities. Prior to that, he worked in the Hedge Fund world for 5 years. He now runs an automated Forex strategy and travels the world with his family. In this episode we talk all about Short selling, creating shorting strategies, the challenges of implementation and how to manage risk. We also discuss the importance of exits, insights into Bear markets, autotrading Forex and why complexity is a form of laziness. Topics discussed - The benefits of developing a strategy on the short side first and why long/short symmetry is important - Challenges with executing short systems and solutions - The most important aspect to worry about when short selling - Finding short candidates in a Bull market and why you should ignore absolute performance - Tips to creating profitable short strategies - The importance of exits and how to test them - Insights into Bear markets - The 3 wrong questions to ask during a Bear market and the 3 best ones to ask - A simple method to identifying Bull and Bear markets - Why complexity is a form of laziness - Using MT4 as a professional trading platform - Why being disciplined is a myth - The type of strategies that work in the Forex markets - The Common sense Ratio and why it’s more robust than the Sharpe ratio
130: Building Mean Reversion Trading Strategies Part 2 with Cesar Alvarez
 
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And we’re back for the 2nd episode in this 3-part series on building Mean Reversion strategies with Cesar Alvarez from Alvarez Quant Trading. In the first episode we discussed the goal of Mean Reversion trading, how to select a trading universe, a number of effective techniques to measuring Mean Reversion and how to combine indicators to identify better quality trades. If you haven’t listened to that episode yet, you should check it out first here. In this 2nd episode in the Mean Reversion series, Cesar will be sharing: - How to classify market conditions and adjust Mean Reversion strategies to the current market, - Tips to choosing trades with a higher probability of success when you have more trades than your account can take, - How the maximum number of positions you trade affects the role of luck on trading results and how to produce more ‘reliable’ results instead, - Why it can be a good idea to have different strategies that enter at market and on limit orders instead of just one or the other, - The impacts of stops on returns and why they don’t often protect you from the really big losses, Implementing multiple exits, what works best in Mean Reversion (and what to avoid) and testing exit combinations. Watch out for the 3rd episode in the series, where Cesar answers all the questions submitted by Better System Trader listeners.
088: Protect and Grow Capital in Market Corrections with Ivanhoff
 
50:15
Market corrections can be a stressful and challenging time for some traders, but it can also be a time of incredible opportunity. How can we not only protect our trading accounts but also grow our capital even further during market corrections? Our guest for this episode, @Ivanhoff, is author of the book ‘Crash: How to Protect and Grow Capital During Corrections’ and in this episode he's going to share with us: - Some of the warning signs a correction could be starting and how to protect your capital during market corrections, - The opportunities available in market corrections and how to take advantage of these to grow capital, - How the characteristics of corrections are changing over time and the impacts this could have for future market corrections, - Current market conditions and what this could be telling us.
147: Building trading strategies with confidence - Adrian Reid
 
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Confidence is a powerful thing – when people have it they can do some pretty amazing things, but on the opposite side, a lack of confidence can be debilitating too, and for traders it can have some similar effects, especially when the performance of a strategy starts to suffer and a trader has money on the line. So, what can we do about this? How can we have more confidence in the strategies that we build and trade? Confidence that we’ve built strategies that are robust. Confidence to continue trading strategies during the periods when strategy performance may be struggling. Our special guest for this episode is Adrian Reid from Enlightened Stock Trading, and in our chat Adrian is going to enlighten us on building trading strategies that we can have confidence in. We’re not just going to talk about trading psychology here, but Adrian will be sharing practical aspects of system design and validation, that can give us more confidence in the strategies that we create and trade live. Some of the things you’ll discover in my chat with Adrian are: - The 5 key areas traders must address to build confidence in a trading system, - Significance testing – why it’s important to strip a strategy down to just the core components and how to determine which components are really driving performance, - Why the transition from backtesting a strategy to trading it live can be a difficult and uncertain one, and the preparation steps you need to take to make the transition smooth, - How a technique called ‘start-date stepping’ can provide valuable insights into how a strategy could really perform in live trading, - Plus, performance profiling across market conditions, sensitivity testing, why traders lose discipline, testing strategy rules in reverse, and much more.
154: From Billion-dollar Trades To Private Trader - Petra Zacek
 
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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 world of private trading. 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.
145: Protecting capital through proper Risk Management with Aaron Brown
 
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I think it’s pretty safe to say we’ve had some interesting times in the markets so far this year. There has been an increase in uncertainty, higher volatility and even outside of the markets there have been a number of events that seem to be impacting the markets. Some traders may be seeing the current market environment as riskier than it has been in the recent past, while other traders may be enjoying the increased opportunity, but whichever way you look at it, there is something that all traders need to consider if they want to last a long time in this business, and that is how to protect capital through proper risk management. The guest on the show this episode is risk management expert Aaron Brown, who has worked for JP Morgan, Morgan Stanley and even spent 10 years as risk manager for quant based hedge fund AQR. In our chat today we’re going to cover some interesting and practical aspects of Risk and Risk Management, and how we can plan for and protect ourselves, which you may find incredibly timely given recent market developments. Some of the things you’ll discover in my chat with Aaron are: - The biggest misconception about risk and how traders should really be looking at risk instead, - Why low volatility environments can be riskier than high volatility environments, - One of the biggest risks to the markets that can impact everyone and can be hard to measure and how to plan for it, - How traders should approach drawdown management, - Why correlations are ‘mythical’ and the right way to think about financial markets, - Risks in the markets today.
016: Trading champion Andrea Unger provides tips to creating robust strategies, indicators in tradin
 
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World Cup Trading champion Andrea Unger discusses how to create robust strategies, the role of indicators in trading, principles to strategy creation, Forex trading strategies and optimising to understand market behaviour. Topics discussed - The strategies and position sizing Andrea used to win the world cup trading championship 4 times - The role of luck in trading - Controlling risk when trading multiple strategies - Where to find trading ideas - The principles Andrea uses in the Forex and Futures markets to develop profitable strategies - The role of indicators in strategy development - Matching strategy type to market characteristics - Why you should analyse your biggest winners as well as your biggest losers - Forex trading tips and changes in the Forex market - Using longer timeframes to filter trades in shorter timeframes - When to optimise or tweak a strategy and how to ensure you don’t over-optimise - The drawbacks of trend following and the solution - Tips to handling drawdowns - Intraday vs End-of-day trading - The key to trading success. -uploaded in HD at http://www.TunesToTube.com
Views: 3965 Better System Trader
142: Mastering The Fundamentals with Martin Lembak
 
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The idea for this podcast episode has its roots in a trip I made to the States last year. I was at a conference and one of the speakers was 1993 Karate World Champion Ricardo Teixeira. Ricardo was explaining how he came about becoming World Karate Champion and he shared his #1 secret to achieving this success, any ideas what it was? It was something that sounds incredibly boring, but it produces big results, and that is: Mastering the fundamentals. Ricardo explained that leading up to the World Championships, he spent months and months just practising the core fundamental moves. He wasn’t practising all those complicated, fancy looking moves you see in the Hollywood films. No. He spent weeks just practising a punch… Until he became so great at it that nobody else could beat him. I think this “mastering the fundamentals” approach has strong applications to trading too. Many traders, especially when starting out, think that the latest software or fanciest indicator is going to guarantee their success, but over time I think we realise that there are some core fundamentals to trading which really bring the results, and perhaps from time to time we even forget them too, so today we’re going to discuss some fundamentals with our guest Martin Lembak. Martin is in a very interesting position because he has access to hundreds of different trading strategies, being traded live in the markets, so he’s in a very exclusive position to see what works and what doesn’t. In our chat today you’ll here: - Why it’s important to understand the characteristics of a market before trying to create or match strategies to that market, - How to choose the types of strategies that suit the personality of the market and the types of trading styles that are the most popular (and profitable) in the markets right now, - Commonalities between developers of successful trading strategies and what traders can do to accelerate their progress, - The fundamentals of portfolio construction, including some challenges and false assumptions of creating portfolios, - Broker selection and some warning signs when assessing whether a broker is safe to use, - Plus much more. So, let’s get started, over to my chat with Martin.
061: Foundations of Trading with Dr Howard Bandy
 
44:10
There are a number of different aspects to trading that we really need to get a handle on to increase our odds of success. Some aspects we often put a lot of thought and analysis into, and others we may not consider so carefully or at all, which could be impacting our trading results without us even realizing. Todays guest, Dr Howard Bandy, is here to discuss the foundations of trading, and some of these aspects we really need to consider, whether we’re just starting out or a more experienced trader. Howard has over 50 years experience in the research and application of modelling and simulation of financial systems. He has previously worked as a senior research analyst for a CTA firm, is a consultant to trading companies and individuals, as well as being an international speaker and publishing a number of books on quantitative trading systems. In our chat today, you will learn: - How to systematically choose the right markets to fit you risk profile, trading style and objectives - The 3 characteristics a market must have to be tradable - The difference between Impulse signals vs State signals and how they can be used to manage trades and monitor trade health - The four parameters you need to understand to define your own risk tolerance - Choosing the best objective function to evaluate trading strategy performance
003 Cesar Alvarez on trading ideas, backtesting, stops and market timing
 
54:45
In our chat with Cesar Alvarez we talk about trading ideas, key concepts and pitfalls of backtesting, the impact of stops on returns, market timing, over-optimisation, drawdown and using multiple strategies in a portfolio. Topics discussed: Where to find trading ideas Why you should test all of your ideas, even if you think they won't work Pitfalls of backtesting you need to look out for How to identify coding errors in backtesting Some clues that indicate you may have over-optimised a strategy Issues with splitting data into in-sample and out-of-sample portions The impact of stops on returns Handling a 50% overnight drop in a stock price Finding your personal drawdown tolerance How market timing can impact a strategy Why you need multiple strategies in a portfolio -uploaded in HD at http://www.TunesToTube.com
007 Rob Hanna discusses trading ideas, market behaviour, timing and the best edges.
 
01:03:15
Rob Hanna tells us how he comes up with so many trading ideas, the type of market behaviours to look out for and his favourite piece of information in a backtest report (clue: it’s not a number). He also discusses how a confluence of ideas can improve trading results, how to look at market behaviour from different angles, some simple market timing techniques, adjusting strategies based on market conditions plus loads of ideas we can test ourselves. Topics discussed Where to find trading ideas The types of market behaviour to look for and what to ignore The most important piece of information in a backtest – it’s not a number! How to handle an edge that is performing poorly How a confluence of ideas can improve trading results Looking at market behaviour from different angles Simple market timing techniques Where to find the biggest edges Adjusting strategies based on market conditions How Fed meeting days impact the market and how it can be traded PLUS loads of ideas to test! -uploaded in HD at http://www.TunesToTube.com
151: Leveraging human behaviour to find quantifiable edges with Larry Connors
 
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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 other media outlets. 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.