SI53: Why most successful Hedge Funds employ Systematic strategies

Sep 16, 2019

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In today’s episode, we discuss if it’s possible to successfully blur the lines between Discretionary & Systematic Trading, why most of the largest Hedge Funds in the world are Systematic, results of the rolling 10-year returns of Trend Following versus the S&P 500, how diversification can prevent long drawdown periods, why forming an opinion on your stock position can negatively affect how you manage the trade, and we also explain some of the differences between Cash Contracts and Continuous Contracts. Questions answered this week include: Should you beware of high win percentages? Are large drawdowns a normal part of Trend Following? What are the largest up or down moves we’ve ever experienced?

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Episode TimeStamps:

00:00 – Intro

01:05 – Macro recap from Niels

05:50 – Weekly review of performance

14:55 – Live event update 10/26/19-10/27/19

15:20 – Top tweets

45:40 – Question 1: Sam; What are the biggest performance moves (up/down) in your career?

54:40 – Question 2: Sam; Why do some trade long-only (versus long-short)?

57:45- Questions 3/4: Bruno; What do you think about using cash versus futures to calculate trends/create systems? Is there a way to value a commodity?

01:04:40 – Benchmark performance update

01:05:50 – Final thoughts

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