SI59: The dangers of investing in "stories" but why we all do it

Published: Oct. 29, 2019, 4:40 a.m.

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On the show today, we cover some of the dangers of investing in something based on its story alone, how market environments can change while the behaviour of participants stays the same, why Trend Followers rely on secret fundamental information being baked into price, the importance of avoiding Outcome Bias,  how cockroaches behave in ways that should be the basis of any robust Trading System, and Niels explains how to use the Top Traders Unplugged Trend Barometer.  Questions we answer this week include: Do you prefer simple or exponential Moving Averages? Should you use the closing price or the settlement price? Do you measure ATR from the closing price or settlement price?  How would you best illustrate trend strength over particular periods of time?

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Episode TimeStamps:

00:00 \\u2013 Intro

00:50 \\u2013 Live event recap

06:00 \\u2013 Macro recap from Niels

09:55 \\u2013 Weekly review of returns

12:45 Niels describes his trend indicator

16:40 \\u2013 Top tweets

34:55 \\u2013 Questions 1/2: Scott; Do you prefer a specific type of moving average? Do you use settlement or last trade in your models?

38:50 \\u2013 Question 3: Carl; Do you calculate ATR using the closing price (versus entry price)?

40:30 \\u2013 Question 4: Nathan; How do you articulate the current volatility environment versus history?

50:00 \\u2013 Benchmark performance update

51:40 \\u2013 More live event comments

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