SI371: Trends Don’t Form Randomly. They Form Reflexively ft. Richard Brennan
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 712 Ratings
🗓️ 25 October 2025
⏱️ 77 minutes
🧾️ Download transcript
Summary
Richard Brennan returns this week to explore how markets truly move - not through randomness or rationality, but through impact, feedback, and memory. What begins with a single trade builds into structure, not pattern; alignment, not noise. Drawing from neuroscience and fractal geometry, Rich challenges the idea that markets can be understood without understanding interaction. The episode builds toward a pointed exchange on position sizing - closed equity versus dynamic exposure - not as a technical footnote, but as a reflection of first principles. In a system where the path shapes the outcome, how you define risk... often reveals how you think the world works.
-----
50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
-----
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Rich on Twitter.
Episode TimeStamps:
00:00:00 – Welcome to the Systematic Investor Series
00:00:23 – Niels’ intro, show setup, and warm welcome to Rich
00:00:57 – Heatwave down under: context and small talk
00:02:10 – Rich: divided brain, AI vs embodiment, and markets needing rules
00:07:50 – AI’s edge shrinks prediction windows; why that helps trend following
00:10:35 – Gold’s violent selloff; electricity vs oil as the new macro lens
00:14:51 – “Trend heaven”: why the backdrop now looks robust
00:18:12 – Post-GFC compression vs today’s decoupling and trends
00:22:43 – Impact and reflexivity: trades reshape the next trade
00:28:23 – Non-ergodic markets: path dependence beats Gaussian assumptions
00:35:48 – Volatility ≠ risk: compression warehouses latent tail risk
00:40:08 – Engineer robustness, don’t optimize to statistics
00:49:41 – From micro impulses to structure: feedback builds trends
00:50:06 – Patterns vs structure; outliers as phase transitions
00:55:00 – Ensemble design: behavioral (not correlational) diversification
01:03:05 – Survival first: closed-equity sizing in a non-ergodic world
01:05:43 – Niels’ counterpoints: dynamic sizing, flows, and “cutback” debate
01:12:20 – Rich: why he frames it as outlier hunting
01:16:30 – Wrap-up, programming notes, and disclaimer
Copyright © 2025 – CMC AG – All Rights Reserved
----
PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:
1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here
2. Daily Trend Barometer and Market Score
One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here
3. Other Resources that can help you
And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here
Transcript
Click on a timestamp to play from that location
| 0:00.0 | You're about to join Neil's Kostrup Larson on a raw and honest journey into the world of systematic investing |
| 0:07.2 | and learn about the most dependable and consistent yet often overlooked investment strategy. |
| 0:13.2 | Welcome to the Systematic Investor Series. |
| 0:33.2 | Welcome, welcome, welcome back to this week's edition of the Systematic Investors series with Richard Brennan and I, Neil's Castro Blast, where each week we take the pulse of the global markets through the lens of a rules-based investor. |
| 0:39.2 | And I also want to say a warm welcome if today's your first time you're joining us. And if someone who cares about you and your portfolio recommended that you tune into the podcast, I want to say a big |
| 0:44.5 | thank you as well. For sharing this episode with your friends and colleagues, it really means a lot |
| 0:50.9 | to us. Rich, it is wonderful, really wonderful to be back with you this week. |
| 0:55.3 | How are you doing? |
| 0:56.0 | How are things down under? |
| 0:57.5 | It's great to be here, Neils, and it's hot down under. |
| 1:00.5 | So the Australian interior is boiling and it's blowing across the coasts. |
| 1:06.0 | So I'm up in Queensland, of course, and I'm sitting in weather that's about 35 degrees Celsius at about 7.30 at night, so it's boiling. |
| 1:15.7 | You know what? I actually did notice that. I saw a headline that Melbourne, because I know I think you went to Melbourne earlier this week, that they were up to 44 degrees this week, which is just out of this world, really, |
| 1:30.7 | and probably not usual, I imagine. |
| 1:33.4 | No, it's certainly not usual. |
| 1:35.9 | I think we're all suffering a bit over here in Aussie land. |
| 1:40.2 | Yes. |
| 1:40.9 | Well, I wish I could give you a little bit of the European cold weather to share. |
| 1:47.0 | Anyways, it's great to be back with you. We've got a, as usual, wonderful lineup of topics. |
| 1:54.8 | And a little bit of a debate between you and I, I think, might come up toward the end. |
| 2:00.9 | And before we get into all of that, of course, I would love to hear what's been on your |
| 2:06.7 | radar the last few weeks since we last spoke. |
... |
Please login to see the full transcript.
Disclaimer: The podcast and artwork embedded on this page are from Niels Kaastrup-Larsen, and are the property of its owner and not affiliated with or endorsed by Tapesearch.
Generated transcripts are the property of Niels Kaastrup-Larsen and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.
Copyright © Tapesearch 2026.