Predictive modelling is used in many aspects of our lives today..

in the banking and insurance industries to assess the risks and behaviours of customers…

in marketing to anticipate customer purchasing behaviours…

in meteorology to forecast the weather…

in fact there are too many applications to list here but predictive modelling has the potential to be applied pretty much anywhere, even in the markets.

Now you may be saying ‘wait, I’m not in the business of predicting, my trading is all reactive, I don’t predict, I just follow the markets’.

I’m not going to go into that argument today but before you make any decisions or judgements about this episode I invite you to take a listen because we discuss the predictability of indicators, and some of the things you’ll hear in our chat about indicators are very interesting, no matter how you use them in your own trading.

Our guest for this episode is John MacLeod. John has a background in using Predictive Modelling, working as a consultant to develop predictive models in consumer banking and mass marketing, and has applied this expertise to the stockmarkets as well.

Some of the things you’ll discover in my chat with John are:

• Predictive modelling – what it is and how can it be used in trading to select stocks that may be setup for a big move,
• Using indicators as predictors and 3 major conclusions John has made by analyzing the predictability of 160 indicators – these results may surprise you!
• The accuracy of predictive modelling, which factors can impact accuracy and the easiest time periods to produce high accuracy predictions,
• How data derived from indicators can actually be more effective as predictors then the indicators themselves,
• Plus much more.

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.

I think it’s pretty safe to say we’ve had some interesting times in the markets so far this year.

There has been an increase in uncertainty, higher volatility and even outside of the markets there have been a number of events that seem to be impacting the markets.

Some traders may be seeing the current market environment as riskier than it has been in the recent past, while other traders may be enjoying the increased opportunity, but whichever way you look at it, there is something that all traders need to consider if they want to last a long time in this business, and that is how to protect capital through proper risk management.

The guest on the show this episode is risk management expert Aaron Brown, who has worked for JP Morgan, Morgan Stanley and even spent 10 years as risk manager for quant based hedge fund AQR.

In our chat today we’re going to cover some interesting and practical aspects of Risk and Risk Management, and how we can plan for and protect ourselves, which you may find incredibly timely given recent market developments. Some of the things you’ll discover in my chat with Aaron are:

• The biggest misconception about risk and how traders should really be looking at risk instead,
• Why low volatility environments can be riskier than high volatility environments,
• One of the biggest risks to the markets that can impact everyone and can be hard to measure and how to plan for it,
• How traders should approach drawdown management,
• Why correlations are ‘mythical’ and the right way to think about financial markets,
• Risks in the markets today

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.

One of the biggest issues we have as systematic and algorithmic traders is that the markets are dynamic and constantly changing, however its quite common to build trading strategies that are static and are designed to take advantage of an optimal set of conditions which don’t actually last very long, if at all.

This can cause periods of good and poor performance as trading strategies fall in and out of sync with the markets, so it makes logical sense to try including some adaptive elements into trading strategies to help them adjust better to the markets as they change.

Our guest for this episode is Jane Fox, aka Trader Janie.

Jane runs the website Quantitrader, and is here to share some of the techniques she uses to add  dynamic abilities to her trading strategies, plus we discuss some other important topics too, including:

• The top 3 components of trading strategies and how adding adaptability to these components can improve a trading strategy,
• Why static stop losses could be hurting your trading performance and some techniques Janie uses to overcome these issues,
• How a ‘circuit breaker’ can save your trading account when things turn ugly,
• A dynamic position sizing technique Jane uses to increase returns while also reducing drawdowns,
• Plus a whole lot more so let’s get started with my chat with Trader Janie.

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.