SI59: The dangers of investing in "stories" but why we all do it

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 29 October 2019

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

On the show today, we cover some of the dangers of investing in something based on its story alone, how market environments can change while the behaviour of participants stays the same, why Trend Followers rely on secret fundamental information being baked into price, the importance of avoiding Outcome Bias, how cockroaches behave in ways that should be the basis of any robust Trading System, and Niels explains how to use the Top Traders Unplugged Trend Barometer. Questions we answer this week include: Do you prefer simple or exponential Moving Averages? Should you use the closing price or the settlement price? Do you measure ATR from the closing price or settlement price? How would you best illustrate trend strength over particular periods of time?

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Episode TimeStamps:

00:00 – Intro

00:50 – Live event recap

06:00 – Macro recap from Niels

09:55 – Weekly review of returns

12:45 Niels describes his trend indicator

16:40 – Top tweets

34:55 – Questions 1/2: Scott; Do you prefer a specific type of moving average? Do you use settlement or last trade in your models?

38:50 – Question 3: Carl; Do you calculate ATR using the closing price (versus entry price)?

40:30 – Question 4: Nathan; How do you articulate the current volatility environment versus history?

50:00 – Benchmark performance update

51:40 – More live event comments

Transcript

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0:00.0	You're about to join Jerry Parker, Maritz Siebert, and Nealz Kastrup Larson on their raw and honest journey into the world of systematic investing and learn about the most dependable and consistent yet often overlooked investment strategy.
0:15.1	Welcome to the Systematic Investor podcast series.
0:19.6	Jerry Parker, Mertz Seber and I, Niels Kastelastel.
0:22.3	I'm back with this week's edition of the Systematic Investor Series, where we share our
0:26.8	experiences, the ups and the downs of what it's like to be a rules-based investor, and of course
0:31.7	where we also take some of your questions.
0:36.7	And since we're all in New York this morning, let me start by saying
0:40.3	good morning to you, Jerry. Good morning to you. Moritz. How are you guys doing? Good morning, Neels. Good morning,
0:44.9	Jerry. Good morning. Doing well. Great. I mean, we just wrapped up two very focused days with a great
0:53.1	group of people discussing all things, trend following.
0:57.6	I think it's fair to say.
0:59.8	And based on the feedback we received so far, I think it went very well.
1:05.2	And I'm pretty sure that we're going to see some breakthroughs from most, if not all of them,
1:10.4	in terms of really accelerating their
1:13.4	trend following journey.
1:15.1	But what was some of, I'm just curious to hear some of your takeaways from this weekend's
1:21.7	live event.
1:23.3	I loved it.
1:23.9	I think it was great.
1:25.4	Enjoyed the people.
1:26.8	Enjoyed, you know, with you,
1:29.2	Niels and Jerry, just a great weekend. Speaking about trend following all the time, I had
	...

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