Better System Trader is one of the longest-running and most respected systematic trading podcasts in the world, hosted by Andrew Swanscott from Melbourne. Swanscott has spent more than two decades developing and trading mechanical systems across US and Australian markets, and brings the discipline of a practitioner to every conversation. His show has featured Larry Williams, Ernest Chan, Jerry Parker and many of the field’s most significant practitioners.
In this episode, Richard covers the question of how systematic trend following navigates uncertainty, and why its design makes it particularly well-suited to uncertain regimes rather than less so. The intuitive expectation is that rule-based systems, built on historical data, should struggle when the future diverges from the past. The counterintuitive reality is that uncertainty tends to generate the kinds of conditions that trend following is built to capitalise on: large directional moves, cross-asset dislocations, and extended trends in volatility and safe havens.
The conversation explores risk management as a structural feature of the approach rather than an add-on. Cutting losses short and allowing profits to run is not just a trading maxim. It is an architectural choice that produces positive skew at the trade distribution level, and which ensures the portfolio retains the capacity to participate in the outlier events that drive long-run performance. Surviving uncertain markets, in other words, is partly a matter of being systematically configured to benefit from them.