In the previous podcast episode with Larry Tentarelli, we opened up the opportunity to submit questions for Larry and received quite a few pages.
Surprisingly, a large portion of the questions were about exits.
Why are exits so hot?
I actually asked Larry why he thought exits were such a hot topic and he suggested that perhaps exits are an area that people really struggle with.
This got me thinking about exits more and I recalled an interesting point that Murray Ruggiero made back in episode 42.
I think Murray raised a really important concept which most traders may not even consider when they’re looking at exits and specifically how to choose the best type of exit for your strategy, which we’ll get to in just a sec.
How do you choose the right exit?
Larry was kind enough to share his philosophy behind exits but you may have noticed that he didn’t give exact details about them, which I think was intentional because it’s something that traders really need to figure out for themselves.
So then how do you go about choosing the best type of exits for a strategy?
Let’s take a listen to Murray answering a question from a listener about exits.
As traders, we can sometimes get tempted into making things more complicated than they need to be.
There are a number of aspects to trading where we get to decide how simple or complicated we really want to make it.
Our guest for this episode, Larry Tentarelli, has developed a simple, no nonsense approach to trading and in our chat he shares the trading insights and approaches he's developed over the past 20 years.
In this episode Larry shares:
Did you know that Dr Seuss wrote the book “Green Eggs and Ham” on a bet that he couldn’t write a book with 50 words or less?
That’s right, in 1960, the founder of Random House made a $50 bet with Dr. Seuss that he would not be able to write a book using only 50 different words.
Well he accepted the challenge…
Creating “Green Eggs and Ham”…
And that book has sold more than 200 million copies, making it one of the best-selling childrens books in history!
Think that was a fluke?
Dr Seuss found that setting constraints was so powerful he used it with other books as well.
His book ‘The Cat in the Hat’ was limited to around 250 different words from a list of 348 words selected from a first graders vocabulary list.
That book sold millions of copies too.
Dr Seuss is just one example of the power of constraints, showing us that setting limits can often produce better results than “keeping our options open”.
Constraints can force us to think better, work better, and come up with more creative solutions.
So how can we apply this principle to trading?
What impact can it have?
In this episode we discuss a few ideas from Kevin Davey, take a listen.
One of the most common uses for optimization is to find the best value or best group of values for a trading strategy, but is this approach only giving us part of the picture?
Are there other uses for optimization that we can leverage to create better trading strategies?
Today we’re going to have a quick chat with World Cup Trading Champion Andrea Unger, the only trader to ever win the competition 3 years in a row.
Andrea has a slightly different view on optimization which we touched upon in a previous podcast episode, back in Episode 16.
Today we’re going to dig into that a little more and hear Andrea’s thoughts on optimization and how he uses it to get a deeper understanding of the markets.
Our guest for this episode is Art Collins.
Art’s story is interesting because in his younger days he was an expert card counter in black jack, and he’s translated some of those skills into building robust trading strategies from really simple market concepts.
Not only is Art a trader but he’s published a number of books and magazines articles, he’s done lecturing, both online and offline so I’m sure you’ve seen his name around the place and it’s an honor to have him here on the show today.
In this episode Art shares: