Top Traders Unplugged

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Latest Episodes:

SI64: The difference between Warehousing vs Recognising Risk Dec 02, 2019

Show notes

This week, we discuss the differences between recognising risk and ‘warehousing’ risk, why Fundamental Investors could benefit from implementing Trend Following rules, Diversification as the most important component of risk management, what Traders can learn from Weightlifters, and the delicate balancing act between simple, simplicity, & complexity. Questions we answer this week include: Is Systematic Investing a form of betting? How do you define a Trend? Should you scale into positions?

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

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Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 – Intro

01:11 – Origins of Black Friday

02:43 – Weekly review of performance

11:45 – Top tweets

40:52 – Questions 1/2: Michael; Can the number of trades a system signals, give insight as to how well optimized the system is? Is there a guideline for the number of trades a system should be signalling, for each chosen timeframe (such as Daily/Weekly)?

45:34 – Question 3: Richard; Comment- ‘No deterioration in the overall compound growth-rate of long-term Diversified Systematic Funds, post-2000.’

46:53 – Questions 4/5: Bing; Why don’t we risk more per trade? Is trader psychology the main reason for the importance placed on position sizing?

53:21 – Question 6: Jacob; Can you give examples of strategies that ‘warehouse’ risk?

56:41 – Question 7: Nathan; How do we define the parameters of a Trend?

01:01:37 – Question 8: Chad; Do you scale into a position, or go straight to the chosen max risk of equity per security?

01:05:51 – Questions 9/10: Chris; What should I do with surplus cash once my system reaches its maximum number of positions allowed to be traded simultaneously? Has the average margin requirements for Bitcoin changed?

01:11:00 – Benchmark performance update

01:24:44 – Final thoughts; Is it becoming harder to be a discretionary macro trader?

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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

Disclaimer

SI63: Are stock pickers overrated? Nov 24, 2019

Show notes

Is the concept of being a great stock picker overrated? Are Trend Following returns mean-reverting over time? Will Sharpe Ratios of Trend Following strategies permanently stay lower from now on? Is it becoming harder to be a successful discretionary macro trader? Should you use the same stop-loss for every position? We also give our thoughts on the process of adding a new market to your Trading Universe, ATR and how to apply it to your strategies, when a visit from the SEC can be taken as a compliment, why pain and suffering can sometimes be a necessary component of profitable Trend Following, Louis Bacon deciding to close down his funds, and much more.

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 – Intro

00:57 – Macro recap from Niels

01:55 – Weekly review of performance

08:22 – Top tweets

46:30 – Questions 1/2: Derek; How do you adapt Trend Following models for a constrained universe of markets? How do you educate fundamental Traders about quant investing?

53:31 – Questions 3/4/5: Jonathan; Does having a 5000 sample size backtest apply to each market in each system? Do you use out-of-sample testing? Do you optimize using multiple time-periods?

01:00:37 – Questions 6/7: Indrius; How do you use ATR? Do you take less risk per market as you trade more positions?

01:04:22 – Question 8/9: Brian; How many otherTrend Following managers should you invest in? How would you seek out other managers to invest in?

01:12:13 – Question 10: Maurici; Do you use the same stop-loss for every position?

01:19:15 – Question 11: Michael; Why incur personnel costs if all you need is a computer to run your systems?

01:23:37 – Benchmark performance update

01:24:44 – Final thoughts; Is it becoming harder to be a discretionary macro trader?

----

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

2. Daily Trend Barometer and Market Score

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

Disclaimer

SI62: The benefits of running a multi-strategy portfolio Nov 17, 2019

Show notes

In this week’s edition, we discuss the possible benefits of running a multi-strategy portfolio, whether or not you need to have a ‘feel’ for the markets before constructing a model, the new all-time highs on the Dow, Trend Following as a viable solution to the end of the 60/40 portfolio, and the longer-term drawbacks of chasing performance from different fund managers. Questions we cover this week include: What really went wrong with LTCM? Should Trend Followers also employ Buy & Hold strategies? Is it ok to ‘leave money on the table’? How would you go about getting into the CTA industry?

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 – Intro

01:05 – Events review

04:00 – Weekly review of performance

17:10 – Top tweets

51:50 – Question 1: Carl; Is the stop price impacted by the cost of execution?

55:30 – Question 2: Saleh; Can you design a system that works in both trending markets and range bound markets?

01:01:55 – Question 3: Edrico; When adding new markets, do you consider correlations to existing markets in a system?

01:04:10 – Question 4: Glen; How would you break into the CTA industry?

01:13:35 – Benchmark performance update

----

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

2. Daily Trend Barometer and Market Score

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

Disclaimer

SI61: Jim Simons & Renaissance Technologies Nov 10, 2019

Show notes

In this week’s episode, we discuss the recently published book on Jim Simons & Renaissance Technologies, why you shouldn’t be too focused on one position, why it can be difficult to avoid overriding your system based on recent fundamentals, what investors can learn from the world’s best Poker players, and why luck should only be the result of following your edge. Plenty of questions answered this week including: Should you add to winning positions? Do you only trade Breakouts or do you also use indicators? Does less volatility mean more robustness? Do you trade ETFs?

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 – Intro

00:50 – Live event review

02:45 – Weekly review of performance

10:40- Voicemail from Jim

13:20 – Top tweets

36:05 – Question 1: Matt; Do you use indicators beyond price action and new highs/lows?

42:00 – Questions 2/3: James; How do you calculate sample size? Does each lookback window need to be treated independently or should risk be managed in aggregate?

51:40 – Questions 4/5: Brian; Why are more volatile systems considered more robust? Does lower volatility lead to better compound returns?

01:06:40 – Question 6: Gaetano; Do you trade ETFs?

01:10:00 – Benchmark performance update

01:11:00- Ray Dalio discussion

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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

2. Daily Trend Barometer and Market Score

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

Disclaimer

SI60: The dangers of "Home" bias and the benefits of Diversification Nov 03, 2019

Show notes

This week, we cover some of the dangers of ‘Home Bias’, and the benefits of diversification mixed with good risk management. We also discuss the differences between common Trend Trading and Systematic Trend Following, why investors tend to hold on to losing positions longer than winning positions, why people being hopeful with losses and afraid with profits may be the reason for why Trend Following works, DUNN’s Capital’s recent milestone of 45 years in the business, why Trend Following strategies are more than just the ‘perfect hedge’, ways that Trend Following can be applied to life, and we touch Abbey Capital’s recent article regarding Trend Following performance over the current decade, compared to previous decades. Questions answered this week include: Should long and short entries be symmetrical? Should you limit position sizing in particular markets? What do you define as a small loss?

-----

50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 – Intro

01:05 – Macro recap from Niels

02:20- Weekly review of performance

09:00 – Top tweets

35:05 – Questions 1/2: David; Should a bearish strategy mirror a bullish strategy (i.e. 100 day hi/lo entry for both)? Should you expect bearish strategies to do as well as bullish strategies?

39:45 – Question 3: Walter; Do you have position size limits on individual contracts?

44:15 – Question 4: Neil; What is the definition of a “small loss”?

49:50 – Benchmark performance update

50:55 – Discussion of Abbey Capital white paper

----

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

2. Daily Trend Barometer and Market Score

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

Disclaimer

SI59: The dangers of investing in "stories" but why we all do it Oct 29, 2019

Show notes

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?

-----

50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

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

----

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

2. Daily Trend Barometer and Market Score

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

Disclaimer

SI58: The consequences of Bank of America declaring the END of the 60/40 portfolio Oct 19, 2019

Show notes

This week, we discuss Bank of America’s declaration of the end of the traditional 60/40 portfolio, the different attitudes to having ‘insurance’ in the markets, the reasons why too many fund managers are aiming for average returns, and the importance of consistently being present to profit from the biggest price moves. Questions we cover this week include: what can be considered a large enough sample size when performing a backtest? What is the best investing advice you have ever received? Should Trend Following funds screen potential clients? How do you deal with positions that show no price movement for a period of time?

-----

50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 – Intro

01:05 – Macro recap from Niels

04:10 – Weekly review of performance

07:00 - Top tweets

38:00 – Question 1: Jacob; How do you do actual executions (order types, manual, etc.)?

40:50 – Question 2: Jacob; When you get a fill, how do you set your stop?

42:40 – Question 3: Jacob; What happens if a stop is hit on the day of entry?

45:40 - Question 4: Mannik; What sample size is sufficient for a backtest?

49:30 – Questions 5/6: Craig; Should TF investors be screened for patience? What personality traits are best for TF and the required patience?

57:40- Questions 7/8: Dimitri; How do you handle positions that haven’t moved in a long time? Does the potential for a large move increase the longer a price goes sideways?

01:03:20 – Benchmark performance update

----

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

2. Daily Trend Barometer and Market Score

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

Disclaimer

SI57: Why investors confuse volatility & noise with risk & instability Oct 13, 2019

Show notes

On this week’s episode, we discuss the tendency for investors to confuse volatility & noise with risk and instability, the benefits of great mentorship, why the best investments are those that have survived calamitous periods, why risk from any single market shouldn’t be able to ruin your portfolio, and Larry Hite’s observation that there is very little magic in Trend Following. Questions we answer this week include: can a 10-year track record can be considered as anything more than noise? Is there a way to achieve exceptionally high returns with minimal risk & volatility? What really is a ‘fat tail’? Can Trend Followers make money in rising interest-rate environments? Can you apply Trend Following to the VIX index?

-----

50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 - Intro

01:15 - Macro recap from Niels

08:15 - Top tweets

45:45 - Question 1: Gaetano; Is it reasonable to TF volatility/VIX futures?

50:00 - Debate: Can TF make money in a rising rate environment?

01:01:20 - Benchmark performance update

01:03:30 - Live event update 10/26/19-10/27/19; Special Guest: Denise Shull

----

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

2. Daily Trend Barometer and Market Score

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

Disclaimer

SI56: The risk of smooth and steady returns for risk avers investors Oct 07, 2019

Show notes

This week, we discuss the potential risks of aiming for smooth & steady returns, the pitfalls of having to make predictions, the higher-than-expected appearances of tail events, why it’s dangerous to look at the ‘average performance’ of an industry, and why aiming to trade in a style that suits your personality can actually turn out to be a bad idea. Questions we cover this week include: Have you encountered any CTAs with unusually low-frequency trading strategies? Should the optimization of your strategy come from an ideas-based approach or a data-based approach? How do you feel about the integration of Value Investing into a Trend Following strategy? What does discipline mean to you, and how do you stay disciplined?

-----

50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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.

Episode TimeStamps:

00:00 - Intro

01:05 - Request for podcast reviews

01:30 - Macro recap from Niels

04:00 - Weekly review of performance

11:10 - Top tweets

43:25 - Live event update 10/26/19-10/27/19; Special Guest: Denise Shull

44:20 - Question 1: Chris; What should an individual pay in fees (data, commissions, etc.)?

47:45 - Question 2: Chris; Do you follow front month or highest open interest contracts/continuous contracts or the month you are trading?

54:30 - Question 3: Jacob; Have you encountered extremely low frequency CTAs?

01:00:20 - Question 4: Jacob; What is your opinion on optimizing using ideas (vs data) first?

01:03:50 - Question 5: Jacob; How do you feel about TF meets value investing?

01:08:30 - Question 6: Adrian; What does discipline mean to you and how do you stay disciplined?

01:15:00 - Benchmark performance update

----

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

2. Daily Trend Barometer and Market Score

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

Disclaimer

TTU111: Alignment of Interest ft. Alan Sheen of Dalton Street Capital – 2of2 Oct 02, 2019

Show notes

Today on Top Traders Unplugged, I continue our conversation with Alan Sheen, talking about how and why he designed Dalton Street Capital’s investment strategy the way he did, and how it has performed compared to the market average over the past three years. Listen in to today’s episode to learn how Alan’s strategies are different from traditional managed futures, his managerial approach that enables employees to innovate, and what an investor should ask a potential manager when doing their due diligence.

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50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE

In This Episode, You’ll Learn:

Why Alan developed a hedging strategy based on volatility and liquidity
The connection between the Australian and US markets
Why Alan does not trade in US markets in his intra-day strategy
Why Dalton Street Capital focuses on Australiasian markets
Where Dalton Street Capital’s return profile comes from
Why Alan also trades in medium to long-term trend following
How Dalton Street Capital’s equity portfolio performs against the market average
Alan’s perspective on model decay
Why alignment of interest is important in an investment strategy
How Alan approaches market research
What questions should investors be asking themselves

-----

Follow Niels on Twitter, LinkedIn, YouTubeor 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 Alan on Twitter

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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

2. Daily Trend Barometer and Market Score

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

Disclaimer

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