Entries by lbernut

When running multiple strategies, should position size be changed based on the drawdown of individual positions, systems or the system as a whole?

This question was originally posted on Quora. Something really cool dawned upon my drunken stupor lately and i modified a chapter in the book. By group of systems, let’s assume you refer to strategies. One-size-fits-all position size algo is a form of laziness Most people have a one-size-fits-all position sizing algorithm across all their strategies […]

Will traders still be able to compete with algorithms in 5 years?

Algos have already taken the lion’s share of trading volume across all markets. 80% of Tokyo Stock Exchange daily volume is done via algos. If investment is a process then automation is the logical conclusion First, ETFs will displace discretionary participants, not algos If every person contributing to their 401K asked themselves this simple question: “do […]

Quora: Are there algorithmic automated trading strategies more suitable for someone with a full-time day job; perhaps on a timescale of days or weeks? I’d like to be able to pay enough attention even if they are automated.

Let’s reframe the question: can You be a top pro athlete while having a 9 to 5 job?   Automated trading is the hardest discipline Automated trading is by far the hardest way to trade. If You think of the markets as driving a Formula 1, then automated trading is being in the cockpit without […]

Are forex signals useful in making profits?

This question originally appeared on Quora   This great question has done a remarkable job at baiting scam-artists. Whoever answered “Yes”, followed by a link to some website is a scam-artist The one-eyed scam-artist leading the blind Everyone wants to gain this mysterious esoteric called trading edge. Well, trading edge is not a story, it […]

How do I get better at trading?

How do I get better at trading? by Laurent Bernut Answer by Laurent Bernut: “Hope is a mistake”, Mad Max, post apocalyptic road poet. 3 declinations of the same principles: process A. Trading edge is not a pretty story , trading edge is a number Every strategy ever traded boils down to this formula: Gain expectancy […]

Should naked short selling be illegal?

Should naked short selling be illegal? by Laurent Bernut Answer by Laurent Bernut: Let’s leave the adorable legal answers from “investors” aside for one minute and let’s think about what would happen if naked short selling was legal A. Price discovery and price equilibrium Many issues are un-shortable because there is no borrow available. It […]

How do short traders better our economy?

How do short traders better our economy? by Laurent Bernut Answer by Laurent Bernut: I was a dedicated short seller with Fidelity for 8 years, a bottom Long Only house. I was working alongside Long Only managers. I was often told that having me alongside was a healthy reality check Plea for the short sellersShort […]