Flirting with Models

Bill Gebhardt - Replicating Discretionary Commodity Trading Systematically (S7E9)

Jul 1, 2024

Former discretionary energies trader Bill Gebhardt, now founder of 10Dynamics, discusses the transition to systematic trading, emphasizing signal incorporation, risk management, and operational strategies. Topics include trend-following models, balancing long-term trends with risk control, risk management in trading programs, operational challenges in shortening time frames, and systematically replicating discretionary commodity trading using Python.

51:36

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Episode guests

Bill Gebhardt

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Quick takeaways

Transition from discretionary to systematic trading process by Bill Gebhardt at Ten Dynamics.

Combining signals from various timeframes for capturing market shifts and managing risk effectively.

Emphasis on operational risk management through 'The Freezer' system for accurate and efficient trading operations.

Deep dives

Discretionary Background Influencing Systematic Approach

Bill Gebhardt, founder of Ten Dynamics, transitioned from a discretionary energies trader to co-founding a fully systematic firm. Despite his discretionary past, Ten Dynamics uses a systematic process that Bill discusses in relation to signal types and risk management. Bill's career evolution and innovativeness demonstrate how his former experience informs and shapes the firm's current strategies.

Efficiency in Trading System Design

01:21

Intro

2min

Evolution from Discretionary to Systematic Trading in Energy Markets

22min

Risk Management in Systematic and Discretionary Trading Programs

15min

Exploring Operational Risk Management in Trading Systems

3min

Systematic Replication of Discretionary Commodity Trading using Python

4min

Team Organization and Responsibility Delegation in Systematic Trading

5min

In this episode I speak with Bill Gebhardt, founder of 10Dynamics.

Bill spent the better part of his career as a discretionary energies trader, with roles at Koch Industries, Merrill Lynch, Deutsche Bank, and Trailstone. In May 2020 he struck out on his own to co-found 10Dynamics.

Given Bill’s fundamental and discretionary background, it may come as a surprise that 10Dynamics runs a fully systematic process. This dichotomy serves as the foundation for much of our conversation, where Bill provides insight into where and how his discretionary background informs the systematic process, both from a signal and a risk management perspective.

We discuss the types of signals 10Dynamics incorporates into their process, how their risk management system is designed to reflect Bill’s experience managing discretionary traders, and how they’ve designed their operational risk management to allow them to trade intraday with a small team.

Please enjoy my conversation with Bill Gebhardt.

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Flirting with Models

Bill Gebhardt - Replicating Discretionary Commodity Trading Systematically (S7E9)

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Discretionary Background Influencing Systematic Approach

Signal System Incorporating Short and Long Term Timeframes

Operational Risk Management through 'The Freezer'

Market Selection Strategy and European Commodity Markets

Balance Between Human Oversight and System Automation

Efficiency in Trading System Design

Remember Everything You Learn from Podcasts