SI81: Why simple ideas can often be more robust than complex ideas ft. Moritz Seibert

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 28 March 2020

⏱️ 77 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Today, we discuss the benefits of focusing on highly liquid markets, why Trend Following strategies are usually less risky & volatile in any market environment, how simple ideas can often be more robust than complex ideas, whether there’s a place for discretion in trading systems, why a manager’s true aims may not be what you were are expecting, and how emotional intelligence disappears during times of stress. Questions we answer include: Should I have fewer positions, and risk more per trade? How do you deal with a market’s sudden loss of liquidity? How does open equity affect upcoming position sizes?

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Episode TimeStamps:

00:00 – Intro

01:21 – Macro recap from Niels

05:57 – Weekly review of performance

08:09 – Top Tweets

41:53 – Francois: Question 1: How did you handle the huge drop in Oil?

45:18 – Mike: Questions 2/3: How do you handle futures capacity constraints? A large trend will likely attract many Trend Followers, how does this affect your position sizing?

01:00:00 – James: Question 4: How do you deal with gap-downs in a market’s liquidity?

01:01:31 – Dave: Question 5: How does open trade equity affect future position sizing?

01:04:44 – Dante: Question 6: Should I use fewer positions & risk more per trade?

01:11:08 – Benchmark performance update

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Transcript

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0:00.0	You're about to join Jerry Parker, Maritz Siebert, and Nealz Kostrup 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.
0:22.9	Welcome and welcome back to this week's edition of the Systematic Investor series
0:26.5	with Moritz Siebert and I, Niels Karzum Larsen, where we each week take the pulse of the global
0:31.0	market through the lens of a rule-based investor.
0:34.8	And for long-term listeners, our conversations are intended to keep you focused and
0:39.2	inspired to continue your trend-following journey. And if you are new to the show, our hope is that
0:45.1	today's episode will trigger your curiosity to check out the back catalog and all of the past
0:51.1	episodes that you may have missed. Moritz, good afternoon, how are you doing?
0:56.0	Good afternoon, Niels. I'm doing really well. How are you?
0:59.0	Great to hear, yes.
1:00.0	Obviously, staying at home in quarantine, so to speak,
1:04.0	not because we have any illnesses, but because we have to here in Switzerland,
1:09.0	so we are complying the best we can.
1:13.0	And yeah, so it's a different work life at the moment, but I think everyone is coping well.
1:21.8	Now, I'm sure our conversation today, certainly initially, will be influenced by the events caused by the spread
1:29.8	of COVID-19 and where only within the last couple of days the US have now surpassed China
1:36.2	and Italy in the terms of number of confirmed cases. The fact that the virus is now beginning
1:42.0	to hit the US really hard, I think personally,
1:46.0	is important for the overall state of the world markets as they tend to take the lead from
1:51.3	the US. And, you know, in my little roundup, it kind of leads me to focus a little bit on
1:57.8	the response we saw from the Fed this week. I think Monday was it,
	...

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