Dave and Michael discuss their processes for recording trading ideas and the software each of them use.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Dave and Michael discuss their systems for coming up with strategy ideas.  Successful traders aren't born with the ability to come up with good ideas.  They create a process that they follow day in and day out to notice unusual patterns in the markets that can eventually be turned into profitable strategies.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Michael and Dave discuss the advantages and disadvantages to paper trading a strategy before trading it live.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Building on last week's episode, Dave and Michael delve into the more advanced order types that can help make trading easier and more automated.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

There are dozens of different order types.  Which ones do you actually need to care about?

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

This very simple exercise can help you identify dozens of ways to improve your daily trading routine.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Dave shares his experience about when it became crystal clear that getting more systematic was going to pay off in a big way.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Join Dave and Michael as they introduce themselves and explain why they are launching a podcast about systematic trading. 

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

As traders gain experience, the problem shifts from not having enough ideas to having too many ideas competing for limited time and mental energy. Without a system, this abundance quickly becomes overwhelming and leads to paralysis or procrastination.

We discuss the ICE method - a simple scoring method to determine which ideas to work on first.

Spreadsheet Link https://docs.google.com/spreadsheets/d/1iWG87jZ7KiANQzH9O8KwgtRRl5Wcd60Q/edit?usp=sharing&ouid=112987133391354450813&rtpof=true&sd=true

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

In this week's episode of Line Your Own Pockets, we take on a topic submitted by Isaac, a trader I work with.

We discuss:

• When timing/speed matters and when it doesn't
• The types of trading strategies where latency is likely the bottleneck
• How rushing to solve problems can be counter-productive (waiting can reveal simpler solutions)
• Concrete steps to determine if latency is really an issue and how to address it

And much more...

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

In this episode, we tackle this popular question. Dave polled several traders he coaches and got some surprising answers.

• How much is trading like, say, poker, or something that is even more up to chance?
• Even starting a business can be called gambling if defined purely as "risking money on uncertain outcomes."
• Does having an edge make trading less like gambling?
• In a casino, is the house "gambling" because it has a strong edge?

What's your take?

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

In this episode, we discuss the best way to use alternative data in your backtest.

• What is alternative data and how can you use it in a strategy?
• Examples of alternative data
• Using it in real-time versus a backtest
• How to automate the process for backtesting and real-time trading

Other episodes mentioned: Using News in Your Trading Strategy

---

Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

In this episode, Dave discusses a conversation he had with John M. from SMB Trading and his unique approach to taking a strategy live.

We discuss:

• John's 35+ strategies he runs live
• How he quickly gets a strategy running in production
• His approach to collaboration with other traders
• What is "strategy taste" and how you can improve yours over time

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Follow-up discussion on quant and discretionary trader collaboration.

We discuss:

• How Dave first connected with Bella
• The cultural DNA of SMB Capital
• The challenges of quant/discretionary collaboration
• The importance of being a giver, not a taker

Related episode:
Mike Bellafiore and Nick Coutrakon from SMB Capital on Trading Teams
Creating a Trusted Trading Group

Books mentioned:
Give and Take by Adam Grant|
The Go-Giver by Bob Burg and John David Mann

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Mike Bellafiore and Nick Coutrakon join the podcast to continue a discussion Mike had with Dave on the makeup of trading teams at SMB Capital, a proprietary trading firm in NYC.

What's the best way to include a quantitative trader in a discretionary trading team?

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Are you a profitable trader but hesitant to automate your trades?

In this episode, we discuss multiple steps to take towards having a computer make trades without fully automating.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

We discuss 4 different variations of a strategy that Dave is deciding between and the thought process for doing so.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Lessons learned from buying a new trading computer.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Remote desktop solution mentioned:
RustDesk
TailScale

---

Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

More discussion on buying power and running out of it might be a good thing.

---

Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

We butt heads in this episode, arguing about the value of portfolio-level backtesting, one of the key feature differences between RealTest and Amibroker.

Is portfolio-level testing essential, or simply premature optimization?

---

Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Is running out of buying power... actually good?

Here's the graph of buying power mentioned in the episode:
Is Running Out of Buying Power A Good Thing?

---

Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

How many trades should your strategy take and how profitable should each one be?

There are two distinct approaches to answering this question, and most profitable traders fall into one camp or the other.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Should you restrict your strategy to trade a certain list of symbols?

In a surprisingly heated debate, Michael and Dave discuss this topic and different reasons for each approach.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Looking at your P&L while you're trading is toxic.  This also applies when looking at someone else's results - perhaps even more so.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Be wary when going from backtest to live trading.  You're at peak optimism, and if you're not careful, disappointment awaits.

In this episode, we discuss all the ways a live trading can fall short of your backtest and what you can do about it.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

How to get out of backtest world and make the next steps to get your strategy live.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

The second episode in our series on creating profitable strategies using backtesting.

We review:

• How most traders backtest the wrong way
• How to add columns to your backtest
• What columns make the most sense
• How your "library of columns" gets more and more valuable over time

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

The first episode in a mini-series on how to create a trading strategy using backtesting.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

We discuss Dave's recent experience using ChatGPT to create the Strategy Cruncher, a tool for optimizing your trading strategies.

Prediction market for who will have the best AI model by the end of the year.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Every trader has an opinion on what the perfect metric is to evaluate a strategy and to optimize on.

We discuss our favorites and why.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

We discuss:

• How to optimize so you have to re-optimize as little as possible
• How better columns directly translate into more robust strategies
• Hold a rule "in reserve" so you can apply it when needed without full re-optimization
• Documenting previous optimization decisions will make the next strategy better
• And much more...

---

Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

"If your backtest looks great for the last 3 months, why do you care what it looked like before that?"

A trader Dave started coaching recently asked this question. The answer cuts to the core of why most traders give up on a trading strategy and end up quitting trading altogether.

The Spurious Correlations website that was mentioned in the podcast.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

You've got a lot of ideas, each requiring a certain amount of work.  How do you decide what trading ideas are likely to pan out?

• Improving an existing strategy
• Creating a new strategy
• Related workflow tasks

The ICE Method

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

We discuss the most common objections traders have to using automation and how to get over the hump.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

A follow-up on our previous interview with Jared Tendler where we go deeper into:

• the role of optimism in trading
• poker and trading
• learning from top performers in non-trading fields

A chart of earnings season:
https://www.davemabe.com/earnings-season/

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

This week, we interviewed Jared Tendler, a mental coach for traders, poker players, and golfers. Jared has written several books, including The Mental Game of Trading.

This was a wide-ranging interview where we discussed:

• The mental side of systematic trading
• How poker and trading are similar and different
• What traders can learn from top performers in other fields

Find more info about Jared on his website: https://jaredtendler.com/

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

When the market is raging in a way that's far out of the ordinary, should you turn your strategies off?  Or let it be business as usual?  We discuss the things to consider.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

We discuss how Dave turned a trader's frustrating bad habit into a positive workflow for creating new trading edge.  This is a great case study for the power of a positive mindset and a desire to get better.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

You're trading a strategy - you're comfortable with the number of trades.  And then BOOM - one day the entire market is moving and your system generates 10x the number of trades it normally does.

How do you react?  Michael and I discussed the first time this happened to me and how best to respond to prepare for the next time.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Do you let the quest for perfection get in the way of trading success? It's more common than you might think. We discuss where this tendency comes from and how to let go of it to make progress in your trading.

"From the surface, every rabbit hole looks like a pile of money." - Dave

Here's a link to the book Michael mentioned: Golf Is Not A Game Of Perfect

The Monkey Trap via Robin Hanson.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

When you're trading part-time and doing well, your trading can seem almost like a video game.  Here's actionable thing I tell the traders I coach to do that keeps them motivated to improve even when their trading is going great.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

We discuss:

• Similar to taking partial profits, moving a stop to breakeven is more about psychological comfort
• Profitable trading requires tolerating discomfort, as difficult as that is at times
• It seems like a simple idea to test, but it quickly adds significant complexity to a backtest
• How to actually test this in a backtest

This is a great example of the platitudes you often hear from people who are good at talking about trading, but don't actually trade.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

If there's one thing profitable traders do consistently, it's keeping track of their results.  Winners keep score!  We discuss the do's and don't's of journaling and the things you can safely skip because they're a waste of time.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Just because you CAN automate doesn't necessarily mean you SHOULD automate it.

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Book on Kelly Criterion: Fortune's Formula

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

You finally have a serious trading edge.  And you know it.  How should you think about sizing up?

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!

Dave's article on partial profits: Should You EVER Take Partial Profits?
Dave's Strategy Corner monthly column at TASC Magazine
Social Desirability Bias - why bad ideas get traction
Best Loser Wins - book recommendation from Michael

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Before you go!

The next time you find yourself in a drawdown, I want you to stop what you're doing and head on over to betterbacktesting.com to sign up for my free backtesting email course.

I hope to see you there!