BO107: Roughly Right or Precisely Wrong

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 27 June 2020

⏱️ 3 minutes

🔗️ Recording | iTunes | RSS

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Summary

Why Trend Following strategies aren’t perfect.

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Transcript

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0:00.0	I did a retweet of something Moritz tweeted that people liked.
0:07.0	And he says trend following is rough, but it's better to be roughly right than precisely wrong.
0:14.0	Keeps you in the game.
0:16.0	People love that. They love how it sums up what we do.
0:19.0	And it's okay for it to be rough, but we're
0:22.7	thankful that following prices keeps us safe. As long as we trade small. I think trade small,
0:32.2	volume your system, and hopefully your system is based on price. Those are two hugely important
0:37.1	things that had a friend
0:40.1	called me up yesterday, closing his fund. And he said, I thought there was a niche for aggressive
0:47.7	trading for large returns. I've been there. I mean, there is a niche, but being able to pull it off is a whole different thing, being
0:55.8	able to sit there and your clients sit there when you're losing lots of money.
1:03.1	So that's difficult.
1:04.6	And then it forces you sometime to not follow the system.
1:09.3	And another trader in Europe I saw down 25% last month.
1:16.3	A great trend follower.
1:17.4	I love this guy, but I don't know.
1:19.6	I think that's really an issue.
1:22.7	Let's get back to making 8% and having a lot less than a 50% drawdown.
1:27.8	Don't try to be any better than that.
1:29.8	I think when you try to get too good or make too much, you can get into lots of trouble.
1:37.5	Yeah.
1:38.2	I mean, I think it's interesting that you bring that up, Jerry, because I remember, you know,
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