Robert Carver is an independent systematic trader who spent more than seven years working for one of the worlds largest systematic hedge funds.

In this episode we discuss trading rules, what makes a good trading rule and the advantages of using continuous rather than binary rules. He also shares insights into over-fitting and the challenges of walk-forward testing that can make it impractical.

Topics discussed

• What makes a good trading rule
• The advantages of simple rules
• Why only some trading rules are profitable
• Walk-forward testing and some of the challenges that can make it impractical
• How much data you actually need to determine if a trading rule is better than another
• Why choosing the optimal values during a walk-forward test is not the best approach and some alternatives
• Weighting trading rules
• Steps to avoid over-fitting
• Should trading rules be adjusted for individual instruments?
• Continuous trading rules compared to binary rules
• The applications and advantages of continuous trading rules
• What makes a good systematic trader
• The issues that overconfidence creates in trading
• Two aspects of institutional trading that most retail traders could apply to their own trading

Disclaimer:
Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

Brett N. Steenbarger, Ph.D. is a trader, psychologist and trading coach who has been actively involved in the financial markets since the late 1970s.

He is the author of a number of popular trading performance books and consults for hedge funds, investment banks and proprietary trading groups.

Brett has an interest in using historical patterns in markets to find a trading edge publishing measures and strategies on his popular TraderFeed blog. He is also a regular contributor to Forbes.

In this episode we discuss creativity, static thinking and why it's important to have unique ideas for trading success. We also cover tips to increasing our creativity, why traditional trading rules need to be updated, the challenges of daytrading and how to overcome them.

Topics discussed

• Three important components of successful traders
• Why the traditional rules of trading need to be updated
• Why traders get stuck in static thinking and need to be more like entreprenuers
• The two different types of trading brains and how understand which we are can improve our results
• How creativity can be used in the strategy research process
• Why we come up with ideas at seemingly random times and how that can be harnessed to improve our trading
• The two stages of creativity and how traders are hurting their performance by neglecting the second stage
• How just immersing ourselves in the market without stepping back can be harming our performance
• Improving creativity through lifestyle
• Why unstructured free time away from the markets can improve your trading
• Techniques to turn creativity into a habit
• How Brett identified his strengths and used those to dictate his trading style
• The challenges of daytrading and how to approach them
• Analysing successful trades to improve performance
• Why we need to have something more important in your life than trading

PLUS listener questions on:

• Applications of diffusion indices
• Formalising edges and the impact of market regimes on edge performance
• How traders can follow their rules about stops and targets
• The psychological differences between systematic and discretionary trading
• The validity of Acceptance Commitment Therapy (ACT) in trading
• Handling drawdowns and turning it into a constructive experience
• How to move from retail trader to full-time/pro

Disclaimer:
Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

In this episode Dr Van Tharp talks about beliefs and their impact on trading, the qualities of successful traders, adapting trading to market types, position sizing, trading mistakes and overcoming fear, perfectionism and impatience.

Topics discussed

• How Van got started in the markets and the issues he faced initially
• The main reasons the majority of trades are unsuccessful
• How traders can identify the type of strategies that suits them
• What it means to trade your beliefs in the market
• How to assess whether your beliefs are useful or limiting
• The real importance of psychology in trading
• Your collection of parts and how they interact
• The process of transformation in a trader
• Qualities of losing traders and how to test yourself for them
• The impact mistakes could be having on your results without even knowing
• How to cope with larger trade sizes as your account grows

PLUS listener questions on:

• Using position sizing to meet your objectives
• The 6 market types, how to measure them and how to apply it to your trading
• How to find positive expectancy systems
• Developing patience when in a trade
• Trading in short timeframes
• How to address issues with perfectionism
• Systematic vs Discretionary trading
• Overcoming fear of pulling the trigger
• Handling drawdowns

Disclaimer:
Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

Michael Himmel is a Founding Partner, Portfolio Manager and Director of AI Research for Essex Asset Management.

He has been actively trading and designing systems since the 1980s, managing the No.1 Global Macro Hedge fund in the world in 1999.

He now uses large doses of AI and Machine Learning in his current practice.

In this week’s episode we discuss Artificial Intelligence, the challenges and applications of AI in trading, criticisms of Machine Learning, event studies and the importance of selecting datasets. He also shares insights from starting out as a runner for some of the biggest players in the 1980s, to managing the no. 1 global macro hedge fund in 1999 to using AI in his practise today.

Even if you’re not into AI and machine learning, the stories and insights Michael shares are invaluable.

Topics discussed

• Lessons from running orders for some of the big players in the 1980s
• Transitioning from discretionary to systematic trading
• The challenges of applying Artificial Intelligence (AI) and Machine Learning in the 1990s
• How changes in technology have made AI in trading available to almost every body
• How Hedge Fund Lambeth Capital achieved a 260% return in 1999
• The impact September 2001 events had on hedge fund operations
• The applications of AI in non-finance industries
• The three divisions of AI
• The relationship between machine learning and AI
• Trading applications of AI
• How to decide which datasets should be used to avoid data mining
• Addressing the criticisms of machine learning
• The challenges of using AI for longer timeframes and is it the right tool for the job?
• Event studies in trading
• The future of trading

Disclaimer:
Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.