Rich joins us this week to discuss how to spot potential outlier trades before they occur, the power of simple trading rules over complexity, why endogenous events move markets 90% of the time while news events are behind only 10% of large market moves, how Trend Following models safely reduce risk exposure automatically as drawdowns increase, how to approach correlated markets in your portfolio, how to achieve diversification with limited capital, the Efficient Market Hypothesis versus Adaptive Market Hypothesis, and the differences between Trend Following and ‘Trend Trading’.

176 Systematic Investor Series ft. Richard Brennan – January 23rd, 2022

Trade well and Prosper

The ATS mob

PS Errata: Couple of things I was unhappy with in my explanations as my brain sometimes sporadically hiccups with strange nonsensical things. :
1) Change the term ‘Square Root Law’ with the term ‘Square Law’….I had square signs floating through my brain as I was attempting to explain it.
2) Change the reference to ‘thinking of ‘liquid water’ at zero degrees. I meant to say do not think of a system as occupying a state around an equilibrium (eg. room temp). Phase shifts clearly occur at zero degrees and 100 degrees. The intent was to suggest that we need to avoid thinking of a system as oscillating about an ‘equilibrium state’ and rather think of it as occupying a ‘state’ that is much closer to a ‘critical’ point of phase change. It carries embodied energy from the inter-relationships that allows it to be perched at a higher energy state (think of Potential energy).

There may be more hiccups…so I apologise 🙂