OI13: The Art of Continuous Trading: Mastering Market Dynamics ft. Bill Gebhardt
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 712 Ratings
🗓️ 15 January 2025
⏱️ 48 minutes
🧾️ Download transcript
Summary
Bill Gebhardt from 10Dynamics discusses the intriguing intersection of market efficiency and systematic trading strategies. He emphasizes the idea that while traditional views suggest markets are efficient, many hedge funds continue to find success using price-based strategies that should theoretically not work. This paradox leads to a fascinating exploration of the psychological aspects of trading, particularly how human behavior can create opportunities for systematic traders. Gebhardt shares insights on the operational complexities of running a nearly continuous trading process, utilizing intraday data, and employing a diverse range of signals. The conversation explores the risks of underfitting versus overfitting in trading models, ultimately advocating for a strategy that embraces empirical success without excessive optimization.
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Episode TimeStamps:
02:17 - Introduction to Bill Gebhardt
06:35 - No pain, no gain
08:40 - Why are they called 10Dynamics?
10:08 - What is their philosophy behind how markets work?
12:24 - Are the signals that they run based on trend following?
13:47 - How they handle the operational complexity of their system
18:15 - How they assess the validity of their data
20:39 - Exploring the technical details behind the execution of their system
22:39 - How they approach trading times
25:07 - Combining short and long term trading
26:52 - How they avoid overfitting and underfitting
30:58 - How Gebhardt implements his experience from the energy space
33:54 - How many markets do they trade?
35:50 - Accessing the domestic futures markets
36:56 - Why are single name equities so special to 10Dynamics?
41:08 - How they approach VIX futures
43:39 - Their perspective on replication strategies
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Transcript
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| 0:00.0 | What we ignore is the fact, and it is a fact that markets have different characteristics, for sure. |
| 0:12.0 | So we definitely miss opportunities to specialize for a given market, right? So we are underfitting, as you would say. But I've, |
| 0:25.6 | in my career, I've never seen anyone go bankrupt because they underfit. But I've seen loads of |
| 0:32.8 | people go bankrupt because they overfit. So, you know, in terms of the risk reward, I'll all bet on underfitting all day long and, you know, |
| 0:42.8 | stay away from overfitting as much as possible. |
| 0:46.8 | Imagine spending an hour with the world's greatest traders. |
| 0:50.6 | Imagine learning from their experiences, their successes, and their failures. |
| 0:55.1 | Imagine no more. |
| 0:57.0 | Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world, |
| 1:03.1 | so you can take your manager due diligence or investment career to the next level. |
| 1:07.8 | Before we begin today's conversation, remember to keep two things in mind. All the |
| 1:12.1 | discussion we'll have about investment performance is about the past, and past performance |
| 1:16.4 | does not guarantee or even infer anything about future performance. Also understand that there's |
| 1:21.6 | a significant risk of financial loss with all investment strategies, and you need to request |
| 1:26.1 | and understand the specific risks from |
| 1:28.4 | the investment manager about their product before you make investment decisions. |
| 1:32.6 | Here's your host, veteran hedge fund manager, Niels Kostrup Larson. |
| 1:41.7 | Welcome to another episode in the Open Interest series on Top Traders Unplot, hosted by Moritz Siebert. |
| 1:47.9 | In life, as well as in trading, maintaining a spirit of curiosity and open-mindedness is key, |
| 1:54.4 | and this is precisely what the Open Interest Series is all about. |
| 1:58.7 | Join Moritz as he engages in candid conversations with seasoned professionals |
| 2:03.1 | from around the globe to uncover their insights, successes and failures, offering you a unique |
... |
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