The AlphaMind Podcast

#77 Brent Donnelly - Alpha Trader: The Mindset, Methodology and Mathematics of Professional Trading

Oct 5, 2021
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INSIGHT

Importance of Understanding Variance

  • Variance causes wide swings in trading outcomes even with stable statistics.
  • Understanding variance helps traders differentiate between bad luck and process flaws.
ANECDOTE

The 'Cheer Hedge' Anecdote

  • Brent noticed that celebrations on the trading floor signal market tops or bottoms.
  • He set up a 'cheer hedge' that profited every time someone cheered a position.
INSIGHT

Balancing Trader Confidence

  • Confidence is necessary but must be balanced; overconfidence and underconfidence kill performance.
  • Traders typically oscillate along the confidence spectrum and must self-monitor to stay optimal.
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