The Derivative
Using the Laws of Trading to find our edge with Agustin Lebron
Podcast summary created with Snipd AI
Quick takeaways
- Having an edge in trading involves market efficiency and adapting to market changes.
- Frequent stop-loss orders indicate potential trading strategy issues and require reassessment.
- Trend following underscores the importance of adaptability and resilience in trading strategies.
Deep dives
Edge in Trading
Having an edge in trading encompasses a combination of factors including market efficiency, adaptation to evolving markets, and effective risk management. While maintaining an edge is crucial for successful trading, it requires continuous analysis and adjustment to remain profitable.
Stop Orders
Frequent stop-loss orders signify potential issues in trading strategy, indicating incorrect position sizing or risk management. It's essential to reevaluate trading approach if stop orders are consistently triggered, ensuring that losses are minimized and strategies are adjusted.
Trend Following and Adaptation
Trend following as a strategy has endured for decades, showcasing the importance of adaptability and resilience in trading. While market trends may evolve, maintaining a consistent approach and adapting strategies over time can help traders navigate changing market conditions effectively.
Leveraged ETFs
Leveraged ETFs, particularly those providing significant leverage, pose risks for retail traders due to inherent volatility and potential losses over time. It is advised to approach leveraging cautiously and avoid extended exposure to leveraged products to prevent significant financial losses.
Future Book and Engagement
The prospect of future publications remains uncertain, with potential interest in additional writing projects. For updates on any future books or engagements, you can follow on Twitter @AugustinLebron3 and stay informed about any upcoming developments in the author's literary pursuits.
We’re breaking the law...the laws of trading, that is! On this episode of the Derivative, we're joined by Agustin Lebron, who started his career as an engineer and turned prop trader (you'd be surprised how common of a story and skill set that is) before writing his book The Laws of Trading: A Trader's Guide to Better Decision-Making for Everyone Today, Agustin is the co-founder and manager of Esselin Research, where he helps growing tech companies make better decisions using his trading knowledge.
Jeff and Agustin dive into his laws of trading, the book, and also chat on topics like; recognizing and nabbing players in small tech companies, applying the laws in a prop firm investing in crypto scenario, how and why trend following seems to break the law around having an edge, and so much more! Plus, tune in if you want to get Agustin's take on FinTwit’s stop order debate —SEND IT!
Chapters:
00:00-01:19 = Intro
01:20-12:33 = Why are engineers drawn to trading and markets?
12:34-23:49 = What is Toxic flow? And what is the edge for all these big players
23:50-37:12 = Recognizing & nabbing A players in small tech companies & Applying the Laws in Crypto
37:13-46:56 = Crypto Prop firm scenario part II: Execution, cost, automation & adaptation
46:57-50:58 = Is there any edge in Trend following?
50:59-58:25 = Hottest take: Stop orders & Leveraged ETFs
Follow along with Agustin on Twitter @AgustinLebron3 and for more information visit his website lawsoftrading.com and check out his book The Laws of Trading here.
Don't forget to subscribe to The Derivative, and follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest.
Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer
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