What’s Caught Our Eyes This Month: October 2024

Welcome to October 2024’s “What’s Caught Our Eyes This Month!”

This month, we explore the latest in systematic trading with podcasts and articles that dive deep into diversified portfolios, risk, and the mechanics of market systems.

In featured podcasts, hear Eric Crittenden’s take on resilience through balanced asset allocation, David Dredge’s approach to risk and convexity, and Rich Brennan’s exploration of trend-following with feedback loops. Our articles take you into the complex systems that shape markets, from fractals to adaptive structures. Packed with insights, this edition equips you to navigate market dynamics with confidence.

Stay curious, adaptable, and trade with resilience!

 

Podcasts

Title: Episode 028: Eric Crittenden – A Portfolio for All Seasons

  • Produced by: The Algorithmic Advantage
  • Summary: In this episode, Eric Crittenden, CIO at Standpoint Asset Management, delves into his comprehensive philosophy on managing risk and achieving stability in diversified portfolios. Known for his unconventional views on markets and trend-following strategies, Eric discusses the significance of balance across asset classes, emphasizing resilience in both bullish and bearish markets. He explains Standpoint’s “All-Weather” strategy, which combines elements of trend following with passive allocations to provide smoother returns over time. Eric shares insights on diversification, adaptability, and the role of psychology in staying disciplined through market swings, offering listeners a practical guide to building robust portfolios that endure various market conditions.

Title: Exploring Risk and Convexity with David Dredge

  • Produced by: Insightful Investor Podcast
  • Summary: David Dredge, CIO of Convex Strategies, shares his unique approach to risk management developed over a 30-year career. He discusses his shift from traditional finance perspectives to a focus on convexity, emphasizing strategies that leverage asymmetrical returns. David critiques standard risk models and advocates for “risk brakes” to enable participation in high-yield markets while protecting against losses. He stresses that instead of forecasting, one should build resilient portfolios that adapt to unforeseen events, ensuring capital growth through diverse market conditions.

Title: The Untold Side of the Turtle Trading Legacy ft. Bill Eckhardt & Rob Sorrentino

  • Produced by: Top Traders Unplugged
  • Summary: This interview is a rare opportunity, featuring Bill Eckhardt’s first-ever podcast appearance, where he discusses his foundational role in the Turtle Trading experiment, his systematic trading principles, and his emphasis on risk control over prediction. Joining him, Rob Sorrentino, President and COO of Eckhardt Trading Company, adds depth by explaining their firm’s unique approach, describing their rigorous research lab, and highlighting their meticulous techniques for controlling overfitting in trading systems. Together, they provide a distinctive insider’s view of systematic trading evolution.

Title: From Hurricanes to Hedge Strategies: The Hidden Common Factors

  • Produced by: Top Traders Unplugged, Systematic Investor Series
  • Summary: In this episode, Rich Brennan joins Niels Kaastrup-Larsen to delve into complex market dynamics, using hurricanes as a metaphor for market unpredictability. Rich explores his approach to trend-following, outlier hunting, and adaptive systems in finance, emphasizing how positive and negative feedback loops shape trends. The discussion also addresses Warren Buffett’s concentration strategy, with Rich offering his own take on diversification tailored to market outliers.

Articles

Title: The Hidden Dangers Beneath: Uncovering the Illusion of Support and Resistance

  • Produced by: ATS Trading Solutions
  • Summary: This article demystifies the often overstated reliability of support and resistance levels, suggesting they can create a false sense of security for traders. Rich Brennan explains that while these levels seem logical, markets are driven by complex adaptive behaviors that can easily break through anticipated barriers. Relying on these levels without understanding underlying market dynamics can lead to costly missteps. The post encourages a focus on broader market forces over rigid technical lines.

Title: Part 1/5: The Power of Process: Are Financial Markets Governed by Stochastic or Chaotic Processes?

  • Produced by: ATS Trading Solutions
  • Summary: This first entry in a five-part series questions if financial markets are driven by stochastic randomness or chaotic processes. We explore non-linear dynamics and compare financial markets to chaos in natural systems, suggesting an inherent order that could deepen understanding of market trends and risk management. The article sets the stage for examining if chaotic processes better capture market behavior than traditional stochastic models.

Title: Part 2/5: From Stochastic Models to Chaos – Understanding Financial Markets Through Non-Linear Dynamics

  • Produced by: ATS Trading Solutions
  • Summary: In this second installment, we delve into non-linear dynamics to explore financial markets beyond traditional stochastic models. The article examines how chaotic principles, including feedback loops and sensitivity to initial conditions, may influence price movements. By aligning market behavior with complex systems and chaotic processes, the piece proposes that a deeper understanding of non-linearity could redefine our approach to volatility, risk, and trend-following in financial markets.

Title: Part 3/5: Fractals – The Geometry of Complexity in Nature and Markets

  • Produced by: ATS Trading Solutions
  • Summary: This third installment delves into fractals, revealing their intricate patterns in both nature and financial markets. The article explores how fractal geometry, marked by self-similar structures, offers insights into the non-linear dynamics of price movements and volatility. By understanding fractal behavior, we can better interpret market patterns that may appear chaotic but actually reveal underlying order. This perspective suggests fractals as valuable tools in anticipating price fluctuations and navigating complex market landscapes.

Title: Part 4/5: Rethinking Financial Markets as Complex Adaptive Systems – Signals, Boundaries, and the Interconnected Nature of Embedded Systems

  • Produced by: ATS Trading Solutions
  • Summary: In this fourth entry, the article explores financial markets as complex adaptive systems, where signals and boundaries shape behavior within interconnected, layered systems. Drawing from concepts in ecology and systems theory, it describes how agents within financial markets interact, leading to emergent behaviors that mimic natural systems. By viewing markets through this lens, the article provides a foundation for understanding market dynamics beyond traditional models, focusing on adaptability and self-organization in response to changing conditions.

Title:Part 5/5: The Power of Process – Understanding Complex Adaptive Systems Through Action, Not Things

  • Produced by: ATS Trading Solutions
  • Summary: Concluding the series, this article underscores the importance of process-driven thinking in understanding complex adaptive systems. Emphasizing that systems are best understood through actions rather than static components, it illustrates how markets resemble dynamic, adaptive ecosystems. This final part ties together insights from previous entries, advocating for a holistic approach to markets that prioritizes responsive processes over fixed models, ultimately enhancing adaptability and resilience in trading strategies.

 

Well, that’s a wrap for October 2024! We hope you found this month’s roundup as enlightening and exciting as we did. As we dive into November, keep your eyes peeled for more intriguing insights, groundbreaking strategies, and inspiring stories from the world of trend following. Stay curious, stay informed, and most importantly, trade well and prosper. Until next time, happy trading!

The ATS mob

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