Excess Returns What Investors Can Learn from a Year-Long Trading Experiment | Brent Donnelly
Sep 26, 2024
Brent Donnelly, author and trading expert, shares insights from his year-long experiment of executing a unique trade each week. He discusses key lessons on the psychological resilience needed for trading and the importance of adapting strategies as markets evolve. Brent emphasizes understanding the interplay between market prices and narratives, and how cognitive biases can impact decisions. He also highlights the unpredictability of trade outcomes and the necessity for robust risk management and performance tracking to achieve long-term trading success.
AI Snips
Chapters
Transcript
Episode notes
Day Trading Success and Failure
- Brent Donnelly turned $25,000 into $350,000 in two years through day trading during the dot-com bubble.
- His edge involved scalping spreads on expensive stocks, anticipating market moves, and leveraging real-time news.
Regime Change and Adaptation
- Decimalization and changing market regimes eroded Brent Donnelly's initial day trading edge, leading to losses.
- This highlights the importance of adaptation and understanding market dynamics.
Trading Style and Volatility
- Understand the current market regime and adapt your trading style accordingly.
- Consider factors like volatility and transaction costs when determining position size and strategy.