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The Trade Busters
47 - It Works Until it Doesn't... Doesn't it?
Dec 24, 2021
Exploring the concept of trading strategies working until they don't, the impact of risk management, determining the success of a strategy, and the mechanics of selling puts.
20:10
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Quick takeaways
- Having conviction in a trading strategy and effectively managing risk are crucial for navigating rough patches and ensuring long-term success.
- Risk management and backtesting play key roles in determining the success of a trading strategy, helping traders adapt to different market conditions and manage drawdowns effectively.
Deep dives
Understanding the saying 'a strategy works until it doesn't'
The podcast explores the saying 'a strategy works until it doesn't' and its relevance to trading strategies. The host discusses the fear of a strategy's performance reverting to the mean and the concerns raised by traders who question the viability of continuously selling puts in a bull market. The host emphasizes the importance of having conviction in a strategy and managing risk to navigate rough patches. While acknowledging the potential for luck in previous success, the host argues that a strategy with positive expectancy can withstand fluctuations in market conditions.
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highlights
Listen to the best highlights from the podcasts you love and dive into the full episode