If you're looking for inspiration, motivation and practical advice on improving your trading results, Better System Trader delivers every fortnight. Each episode brings you an expert trader who shares their own story, along with the steps, both good and bad, that they've taken on their path to success. With a focus on actionable insights, the tips and tricks used by the experts contain loads of value, providing you with insanely practical tips and tools you can start using TODAY. Improve your trading with Better System Trader.
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Quite often the focus for traders are the technical aspects of trading - indicators, back-testing procedures, robustness checks, statistics, trading platforms, infrastructure etc. All of these aspects can have an impact on trading performance. However, there are other aspects of trading too that often go unrecognised, ignored, and can have a huge impact on our performance no matter how good our strategies are. What are they? Joining us today to discuss high performance trading is Mandi Pour Rafs...
" Backtesting trading strategies does not work !" Got your attention? Maybe you agree with this statement. Perhaps you strongly disagree and you're currently heading out to the backyard to grab your pitchfork. Or maybe you're shaking your head thinking ' what the heck swanny, have you finally lost it man ?'. Well, the good news is I haven't lost it (yet). We're going to dive deeper into this statement in the podcast episode today. But first, I'd like to introduce our guest - John Ehlers. John is...
As Warren Buffet once said: " the stock market is a manic depressive. " The market can be full of euphoria and greed one moment, and switch to fear and panic the next. This can often be a time of danger and high-risk for some traders, but for other traders it's a time of immense opportunity. How? In this podcast episode we're joined by special guest Larry Connors. Larry has over 30 years in the financial markets industry and has been featured on the Wall Street Journal, Bloomberg, Dow Jones, &am...
In this podcast episode we're going to be talking about strategy design and different ways to look at the markets, and joining us as our special guests is Rikard Nilsson from Autostock. Rikard trades all different styles and markets, and has even built his own trading platform with some interesting features he's going to share with us. Plus he's going to share some interesting ideas on how he looks at the markets, some of which you may not have heard of before, including: The 'Predictive Average...
A huge part of algorithmic trading is all about stacking the odds in our favour. Finding statistical edges, identifying times when probabilities indicate that market conditions are either favourable for a trade or perhaps unfavourable for a trade. And although probabilities aren't certainties, they can still be an important guides for traders, so joining us as special guest for this episode is Scott Hodson from Probable Trades . Some of the things you'll discover in my chat with Scott are: How t...
In this episode we're going to be talking about holey strategies and portfolios. Now, when I say "holey" I'm not talking about religion, divine intervention, holy grails or anything like that, although we could probably apply todays topics to those type of strategies that need divine intervention (and who hasn't had a strategy like that at some point?). No, when I say "holey" I mean something with a hole in it, like a bucket that has a hole in the bottom. When you put water or some other liquid ...
Confidence is a powerful thing – when people have it they can do some pretty amazing things, but on the opposite side, a lack of confidence can be debilitating too, and for traders it can have some similar effects, especially when the performance of a strategy starts to suffer and a trader has money on the line. So, what can we do about this? How can we have more confidence in the strategies that we build and trade? Confidence that we've built strategies that are robust. Confidence to continue t...
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 reacti...
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 trad...
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 ...
The discovery of DNA as well as the understanding of its function and structure may be one of the most important discoveries of the last century. As researchers continue to unlock its secrets, the applications to the scientific, medical, agricultural and forensics fields has been enormous. From enabling the breeding of animals and crops that are better resistant to disease, to being able to accurately identify criminals and victims, and even to detect diseases early on and create breakthrough tr...
The idea for this podcast episode has its roots in a trip I made to the States last year. I was at a conference and one of the speakers was 1993 Karate World Champion Ricardo Teixeira. Ricardo was explaining how he came about becoming World Karate Champion and he shared his #1 secret to achieving this success, any ideas what it was? It was something that sounds incredibly boring, but it produces big results, and that is: Mastering the fundamentals. Ricardo explained that leading up to the World ...
We have a really interesting one here for you today, one that may challenge your existing thoughts on trading models. I know this episode has certainly made me think about it from a different angle, so I hope you enjoy this. Our guest for this episode is Kevin Saunders from Tribelet Capital. Kevin is a specialist in electronic trading across many international exchanges, co-founding Non Correlated Capital in 2009, which later became a licensed CTA with more than USD 40 million under management. ...
In this podcast episode we're going to be talking about something that can have a huge impact on the markets and on trading strategies. It's something that can happen very quickly and cause a lot of damage, and that is spikes in volatility. And our special guest to discuss volatility spikes today is Andrew Thrasher, who published a research paper called 'Forecasting a Volatility Tsunami', which won the Charles Dow award in 2017. Whenever the VIX is at low levels we here all about in the mainstre...
Welcome to the first podcast episode for 2018, happy new year! I hope that you had a great Christmas or holiday season and all the best for 2018. In this podcast episode we're talking about the impacts that large institutions can have on the markets, especially on stocks, and how certain institutional behaviours can indicate potentially big moves in prices. Our special guest is Jason Bodner from Macro Analytics for Professionals (MAP). His previous experience working some big institutional order...
Well here we are, another year gone (and so fast too!). I'm glad you could join me for this final episode for 2017, where we'll be reviewing all of the special guests we had on the show this year, the topics and insights they've shared plus their top trading lessons. I think this is a great way to look back, to be reminded of some of the key points, and all of the amazing knowledge our guests have shared with us this year. Also, thanks for all of the emails of support and appreciation throughout...
Our guest for this podcast episode, Dimitri Speck, first became interested in the markets as a child when he found gold while diving at the beach. And even though trading isn't usually as easy as just picking up gold off the ground, Dimitri has spent years diving deep into the markets and uncovering hidden and consistent anomalies that traders and investors of all styles can profit from. In this episode he's going to share some of these powerful insights with us, including: How understanding Int...
A few weeks ago we organised a family holiday for December. We booked a luxury villa in Port Douglas and we're all really excited to get there and start enjoying the holiday. Last year the Huffington Post published an article about vacations, and shared a study in a journal claiming that just planning or anticipating your trip can make you happier than actually taking it. I'm not sure if anticipating a holiday is more fun than actually taking it (I guess that depends on whether you have to take ...
I can't believe it's only 4 weeks until Christmas! We've got the Christmas ads running on the TV here already... The local grocery store has the Christmas decorations up... And they're even playing Christmas carols - can you believe that? At home my 5-year-old daughter is already priming me for what she wants from Santa this year, which by the way is pretty much everything on TV right now! 2017 has gone by really fast and we're coming into a time of reflection and rest, time to take a break if y...
The Petronas towers in Malaysia are the tallest twin towers in the world at 452m (1483 ft) tall. Because of the ground underneath the building site, they had to put in some deep foundations, up to 114m (374 ft) deep. Without these deep foundations, the building would run into problems. In fact, during construction, at around the 72nd floor, they discovered that tower 2 was leaning 25 mm (0.98in) from vertical, so to correct that lean the next 16 floors were slanted back the other way. They even ...
And we're back for the final episode in this 3-part series on building Mean Reversion strategies with Cesar Alvarez from Alvarez Quant Trading. In the 1st episode we discussed the goal of Mean Reversion trading, how to select a trading universe, a number of effective techniques to measuring Mean Reversion and how to combine indicators to identify better quality trades. In the 2nd episode we discussed market classification, trade ranking, exits, order types, position sizing, risk control and much...
A few weeks ago I got the fright of my life. I found myself in a situation where I could potentially be crushed by a car, or perhaps even a bus or truck. Find out what happens and how it applies to tracking the performance degradation of trading strategies (before they kill your account). 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 ...
I've just arrived back home from a few weeks in the States, I had a great time there but it's also good to be home. I'm a bit jet-lagged today so let's hope what I share today actually makes sense! A few weeks ago I had the honour of speaking at the ATAA members meeting here in Melbourne. I presented for about an hour and the topic of my presentation was '7 practical tips to reducing drawdown'. In this weeks Trading Thought I want to share a quick story from that and how it applies to Mean Rever...
Cesar Alvarez continues his deep dive into mean reversion strategies, discussing how to classify market conditions and adapt trading approaches based on volatility and trend. He shares techniques for ranking trades, optimizing position sizing to mitigate luck, and explores the pros and cons of market versus limit entry orders. The episode also thoroughly examines various exit strategies, including indicator-based, maximum loss, and time-based exits, while offering psychological insights and recommended resources for aspiring mean reversion traders.
Have you ever wondered: Why the word "abbreviate" is so long? Why are wise men and wise guys opposites? Why is it called quicksand if it takes you down slowly? Where do forest rangers go to "get away from it all?" Why is it that when we transport something by car it's called a shipment, but when we transport something by ship it's called cargo? I'm sure there are reasons for all of these, but on the surface they don't seem to make sense. What about stop losses, do they make sense? We often hear ...
As you probably know, we're currently focusing on Mean Reversion trading strategies. In episode 127, Cesar Alvarez shared a number of techniques to measuring Mean Reversion and identifying setups. There was probably close to 10, maybe 12 different ideas Cesar shared with us, so there are lots of ways to measure Mean Reversion when looking for trade setups. Are any techniques better than others? In this weeks Trading Thought I want to add a little bit more to the insights Cesar shared with us on ...
In the first part of a two-episode series, quantitative trader Cesar Alvarez shares his expertise on building mean reversion strategies. He outlines crucial steps from selecting a trading universe to measuring mean reversion with various indicators and combining them effectively. Alvarez also challenges the common desire for smooth equity curves, suggesting they might indicate crowded strategies, and emphasizes the importance of managing liquidity and transaction costs in real-world trading.
It seems from the emails I've been getting lately that more and more traders are becoming concerned about the state of the markets, especially the stock markets, which is understandable. And the concern is really around what's going to happen when the stockmarkets start falling. What could happen to their strategies and accounts and how can they prepare for it now? How can they protect their portfolios? One form of protection that often comes up is using diversification to reduce portfolio risk....
In this weeks 'Trading thought' we're going to discuss an issue that all traders have to face... How do you know when to stop trading a strategy? A common approach is to wait for a strategy to reach the maximum historical drawdown and then either stop trading the system or look at modifying it or optimizing it, but... There are a couple of problems with that approach: Once the strategy has hit that drawdown level, the damage is already done, you've already taken a series of losses to get to that...
Trade management is a critical component of a trading strategy. It can often be the difference between a profitable trade and a loss... However many traders focus on the entry only and leave trade management as an afterthought. In episode 49 of the podcast , Linda Raschke, said "trade management is probably the most neglected area of system development". In that episode we focused on Linda's approach to modelling the markets but in this episode Linda is back to discuss trade management and exits...
