AlphaCast Marsten Parker - Lessons from Systematic Market Wizard - AlphaCast #1 - 2023-02-14
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Feb 23, 2023 Marsten Parker, the market wizard in systematic trading, shares his journey and unique strategies. He discusses strategy diversification, adapting to market changes, and the importance of data providers. Explore his evolution from breakout to mean reversion strategies and the significance of trend analysis. Learn about challenges in trading, user-friendly backtesting software, and efficient trading tools.
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Marsten Parker's Early Journey
- Marsten Parker started with classical violin and computer programming before switching to systematic trading after a successful exit from a tech IPO.
- He taught himself programming, worked as a software engineer, and then taught himself trading using books and online resources including a website providing systematic strategies.
Breakout Strategy Breakthrough
- Marsten traded a breakthrough stock strategy in 1998 with Gary B. Smith, going long and short on volume breakouts using fixed profit targets and stops.
- That year, their strategy gained about 50%, which deeply influenced Marsten's approach to trading both sides for diversification.
Adapting to Regime Changes
- Marsten found that shorting post-breakdown stocks stopped working around 2012-2013 as market regimes shifted.
- He adapted by incorporating mean reversion trading, buying dips instead of shorting breakdowns, showing strategy flexibility is key.