Top Traders Unplugged

SI371: Trends Don’t Form Randomly. They Form Reflexively ft. Richard Brennan

111 snips
Oct 25, 2025
Guest
Richard Brennan
Rich Brennan, an experienced systematic investor and trend follower, delves into market dynamics, arguing that movements arise from impact and memory rather than randomness. He explores the concept of reflexivity, explaining how single trades reshape market structures. Rich also discusses the significance of fractals in understanding market trends and the implications of non-ergodicity. Position sizing strategies come to the forefront as he highlights the importance of survival in a fractal market over traditional statistical methods.
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INSIGHT

Brains Versus Markets

  • The brain's left hemisphere models and the right hemisphere contextualizes via feedback, creating a sense of self.
  • Richard Brennan argues markets favour left-hemisphere-like systematic processes, not emotion-driven intuition.
INSIGHT

AI Shrinks Prediction Windows

  • Brennan says AI will compress prediction horizons by excelling at short-term pattern recognition.
  • He believes shorter prediction windows help trend following by reducing predictive crowding and enhancing structural moves.
ANECDOTE

Recent Metals Volatility Example

  • Niels notes the precious metals sector had a violent selloff with gold down over 6% in a day and palladium down 16% in two days.
  • This recent volatility fed their later discussion on position sizing and reversals.
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