Top Traders Unplugged

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...

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 shou...

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 r...

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 ‘...

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 emot...

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...

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 s...

Is ‘Buy & Hold’ 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, an...

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...

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 includ...

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 yo...

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...

On today’s episode, guest host Ranjan Bhaduri continues his conversation with John Fidler , Senior VP and Director of Alternative Investments at Commonwealth Bank and Trust, Christopher Vogt , Director of Equity Strategies at Margaret Cargill Philanthropies, and Jonathan Miles , Managing Director of Ascent Private Capital Management of U.S. Bank. Listen in as our guests talk about management fees...

I often see the press write that too much money is chasing the same trends, and this being the reason that Trend Following strategies have been performing a little under par in the last few years.  So who better to ask if this really is true, than my friend Kathryn Kaminski, who of course co-wrote the bible on Trend Following with Alex Greyserman… as well as a book with me, that you can...

This week, we invite special guest Wayne Himelsein onto the show from Logica Capital Advisers, in Los Angeles.  Wayne explains his journey into starting a Hedge Fund, some of the lessons he has learned over the years, and some of the rules that keep him from repeating past mistakes.  He describes why he loves Trend Following, why embracing ‘uncertainty’ can have a positive effe...

On today’s episode, guest host Ranjan Bhaduri speaks with John Fidler , Senior VP and Director of Alternative Investments at Commonwealth Bank and Trust, Christopher Vogt , Director of Equity Strategies at Margaret Cargill Philanthropies, and Jonathon Miles , Managing Director of Ascent Private Capital Management of U.S. Bank. With these experts on managed futures, we will discuss how managed futu...

Are CTAs giving the wrong message by charging low performance fees? Is there a perfect amount of AUM to aim for?  Can Systematic Trading keep you happy?  How accurately can we predict future returns?  We discuss whether Trend Following  is easy enough to do at home, or if you should do it through a reputable fund instead.  What sort of things can be found in a ‘Research Gr...

For those of us who have been on the manager side for a while, you’ll know that investors love to analyse decades of performance data before deciding which manager they are going to invest with, and that makes a lot of sense.  But we also come across investors who subsequently redeem based on just a year or two after they invested, which is usually just down to bad luck and unfortunate timing...

Does Systematic Trading completely eliminate all emotions from the process?  Is it wise to use Stop-Losses?  Should CTAs target low-volatility & average returns, or high returns with higher possible volatility?  Can a finely-crafted Trading System be considered in the same way as a fine piece of art?  Are all Trend Following systems essentially the same?  We also discu...

Kathryn Kaminski is one of my favorite people to discuss Trend Following with, because she has a great way of simplifying and explaining some of the key concepts of the strategy.  Today, we talk about the phrase Crisis Alpha, and how it may be better to think about these strategies as Divergent strategies, because in reality we don’t need a crisis in order for Trend Following to do well. Year...

Is it wise to adjust position-size according to recent volatility? Can back-testing a Trend Following strategy end up as just being a form of curve-fitting? We discuss the merits of Long-Term evidence over Recency Bias, the importance of Sharpe Ratios, the significance of price gaps, and whether leverage is a necessity for all CTAs. You will hear our thoughts on the idea of risking 1% per trade an...

Often, a Trend following strategy is described as being a ‘Black Box’, as if something bad was going on.  So it was refreshing to hear Scott Foster talk about Trend Following as being in fact, a ‘White Box’, or a ‘Transparent Box’, in comparison to other algorithmic strategies, which are often embraced by investors to a much larger degree… so I’m delighted to share this blog post with you, fr...

In this episode, we’re joined by special guest, Jesse Felder, from The Felder Report & the SuperInvestor Podcast.  Jesse describes his journey into the markets, if he uses Trend Following strategies in his portfolio, why he thinks we’re in a Bear Market, and in the middle of a major ‘topping process’, what he thinks about Passive Investing, his go-to timing tools, and if Value Investing c...

Today guest host Chris Solarz continues his conversation with Chris Cole , the Founder and CIO of Artemis Capital Management, Matthew Sargaison , co-CEO at AHL at Man Investments, and Dan Stone , co-founder of Ionic Capital. Our guests today go over the changing markets and why despite trend following’s recent underperformance, their clients still look to it as protection for their portfolio. They...

On today’s show, we give our thoughts on ‘Evidence-Based Investing’, David Harding’s latest comments on Trend Following, how much is too much ‘Open Risk’, as well as answering: what are some of the ‘Trend Commandments’?  Also, we discuss whether it’s safe or not to buy after a big upside price break or sell after a big gap down, whether Volatility should be ‘targeted’ in your portfolio, and i...