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In Episode 37, we welcome John Bollinger, creator of Bollinger Bands, one of the most widely-used analytical tools in investing.\nAs John is also a market historian, Meb start by asking him about his historical influences \u2013 those individuals who helped shape John\u2019s perspectives on the markets and trading. John gives us his thoughts, identifying who he believes is one of the most important figures in technical analysis. This leads to an often-forgotten takeaway \u2013 that many of the most effective market concepts have been around for a long time. Some very profitable strategies that still work today were being explored 100 years ago.\nMeb redirects, asking John about his background. It turns out, John was in the film business as a cameraman. But by a few twists of fate, he ended up in front of the camera, providing technical commentary on markets for a fledgling financial broadcast network.\nThis leads into a discussion of John\u2019s famous \u201cBollinger Bands.\u201d He gives us an overview of the tool, and how he came to establish it. In essence, Bollinger Bands can help investors identify relative market bottoms and tops, helping find direction for profitable trades.\nMeb then asks if John\u2019s thinking on Bollinger Bands have changed since the early days. John tells us that the core concept stands the test of time, though he has added some extra indicators.\nNext, Meb asks about combining two types of analysis \u2013 technical and fundamental \u2013 something John calls \u201crational analysis.\u201d For many people, you fall into one camp or the other. But John was able to find overlap between them. He tells us how, and even ropes in two additional types of analysis to include \u2013 quantitative and behavioral. He thinks combing all four works better than using any single one. Meb asks how you actually use them all together, to which John gives us his thoughts.\nMeb then asks which sector John is currently identifying as a good source of potential trading profits \u2013 but he immediately discounts the validity of his own question. You\u2019ll want to hear why. This leads into a great takeaway \u2013 using the right charts for entry/exit in a trade. Specifically, a trader may use a short-term chart to initiate a position, but then not move to a medium-term chart to help him navigate how long to hold the position. Instead, he keeps looking at the short-term chart, which obviously will oscillate, and potentially scare the investor out of the trade. John says \u201cPeople have this time frame confusion that I think does a huge amount of damage.\u201d\nMeb then asks about trade management. John says the most neglected issue is position sizing. People need to know how much capital to commit to their strategy, and there is a mathematical \u201coptimal\u201d answer. In essence, the problem is \u201cbetting too large.\u201d\nThis leads John to reference the trading concept of \u201cregret\u201d \u2013 the percentage of time you\u2019re in a drawdown. Turns out it\u2019s about 80% or 90% of the time you\u2019re invested. The only times you\u2019re not in a drawdown are when you\u2019re setting new highs, and that\u2019s pretty rare. But most investors hate drawdowns and just don\u2019t do well with this reality (part of the reason why investing is so hard for most of us).\nThere\u2019s far more in the episode, including the most influential books John has read, Bitcoin, currencies, how to trade volatility, and John\u2019s most memorable trades (good and bad). What were they? Find out in Episode 37.\nLearn more about your ad choices. Visit megaphone.fm/adchoices