In addition, he has a popular interview series where he talks with great traders and about a wide range of topics. We are honored that he chose to interview our portfolio manager, David Stendahl. Here is a link to the Interview.
The interview is simple enough for a novice, but nuanced enough for advanced traders. Some of the topics include:
- Stendahl's world is 100% systematic, and he has been involved in conceptualizing and thinking up systematic approaches to trading the market for decades. But what is a system? Stendahl's explanation may surprise you.
- Stendahl's approach is that a system should have as few moving parts as possible; it should be simple enough to be explained on the back of a cocktail napkin.
- Stendahl explains that your system doesn't have to be complex to work. Sometimes the best system can be only four lines of code.
- Covel and Stendahl make an analogy to cars, and how you can easily fix a simpler car in your garage as opposed to a complex Lexus.
- Stendahl explains that everyone is using a system in one way or another: every time you make a decision to buy or liquidate, whether it's based on a real system or based on advice from someone on the television, it's systematic in some regard.
- If you can talk it, you should be able to quantify it. If you can't quantify it, it might not really be there.
- Find out how Stendahl's dyslexia played a role in his technical trading, and how he turned this disadvantage into an advantage.
- Covel and Stendahl discuss Ray Dalio of Bridgewater, who says that he is 100% systematic, but doesn't use any technical information.
- Covel and Stendahl also discuss position sizing and money management, and how you can approach this systematically.
There is a lot of good stuff in the interview. Hope you enjoy it.
See the list of all Covel's Trend Following Manifesto Podcasts in iTunes and here for a more complete description of each recording. Check it out; he has produced a bunch of terrific interviews that are worth listening to because of their educational content, and because they will make you think.