My guest today is Perry Kaufman, an American systematic trader, index developer, and quantitative financial theorist. He is considered a leading expert in the development of fully algorithmic trading programs.

The topic is systematic trading.

In this episode of Trend Following Radio we discuss:

• How Kaufman came to the idea of 100% algorithmic trading systems
• The difference between being systematic and being automated
• Optimization vs. validation
• The biggest advantages of testing
• Why discretion is not part of Kaufman’s toolbox
• The problem of tail events
• Why discipline is the most important characteristic of a systematic trader
• The “loose pants fit everyone” philosophy
• Preparing yourself for uncertainty
• Comparisons between risk management and risk measurement
• The Sharpe ratio
• High volatility trades vs. low volatility
• Why Kaufman places equal weight on both risk management and the underlying system
• Systematic trading in established mature markets vs. emerging markets

Jump in!

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I’m MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I’m proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

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