SI312: Should You Just Buy a CTA Index? ft. Rob Carver
Top Traders Unplugged
Navigating Capital and Diversification in Trading
This chapter emphasizes the significance of account size in trading, particularly for small accounts. It discusses the practicality of investing in ETFs or single manager CTA products for better diversification until reaching sufficient capital.
Rob Carver is back this week to discuss the importance of being able to detach yourself from the markets and taking “real” breaks from time to time and we also hear from Rob what it is like to let his systematic trading system run by itself whilst he enjoys a long summer holiday. We also discuss the underlying theory of macro momentum and how you can apply it to your own system, how he targets volatility in his portfolio and why Rob does not like using stop-losses to exit trades. We also touch on whether it’s a good idea for Trump to create a U.S. Bitcoin strategic reserve, how ETFs really work and what they can bring to your portfolio, and whether or not buying one of the new CTA replication products is really the same as buying the underlying CTA index based on a recent paper from Transtrend.
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Episode TimeStamps:
01:18 - What has caught our attention recently?
02:59 - How it feels to let your system run without you during holidays?
10:45 - Industry performance update
14:30 - Q1, Luis: What are your thoughts on Macro Momentum for retail traders?
21:00 - Q2, Roman: How to best target portfolio volatility
24:24 - Q3, Joshua: Which risk manament approach is best ATRs vs actual % of capital
31:22 - Would a Bitcoin strategic reserve be a good idea?
39:05 - A deep dive into ETFs
48:52 - An example of a worst case scenario ETF
53:13 - Can't we just buy a CTA index?
59:29 - The best way to think about indices
01:07:41 - Turning a backtest into an index
Resources discussed in this Episode:
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