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The Algorithmic Advantage

010 - Alan Clement - Fortified & Diversified Quantitative Equities Strategies

Dec 5, 2023
Alan Clement, a seasoned trader and strategy developer, shares insights into systematic trading in equity markets. He discusses mean reversion, trend following, and volatility trading strategies, emphasizing the importance of diversification. Alan also highlights the nuances of trading equities, adapting to market conditions, and risk management. He explores building and testing strategies to avoid overfitting, including out-of-sample testing and Monte Carlo simulations.
01:32:15

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Diversifying strategies and avoiding stop losses can help manage risk in equity trading.
  • Utilizing momentum and relative strength to select stocks can capitalize on strong trends.

Deep dives

Mean Reversion Strategy: Buying as the Market Falls

In this strategy, the focus is on identifying stocks exhibiting a strong directional trend and waiting for the market to pull back before making a trade. The approach involves buying stocks as they are falling and placing a bet that they will correct back in the direction of the trend. Risk is managed by diversifying into multiple trades and not using stop losses, as stops tend to lock in drawdown. The strategy aims to profit from market inefficiencies and can be applied to different sectors or indexes in the equities market.

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