#139: THE TRADING POWERQUADRANT
I think I can summarize my entire trading career into a simple quadrant.
I like calling it “Trading PowerQuadrant” because it’s what it really is.
It consists of 4 absolutely key, essential, foundational elements, without which I would never be where I am today:
The first one is a powerful model. I could never develop a single breakout strategy without a powerful breakout model. It would be literally impossible.
Then there is a Rapid Design & Prototype process. Time is money. Markets are extremely competitive. If you’re too slow, you stay behind. Speed is crucial. So I really had to figure this one out in an early stage too.
Then there is extreme robustness testing. 99% of trading strategies is just crap. Overfitted. Curvefited. And it’s getting harder and harder every day to distinguish what really is a good strategy. So I really had to be very inventive here and come up with one of the toughest robustness testing procedures in the industry. And I am really glad I did it. That I went in this path.
And finally, Dynamic Position Sizing. Because once you have a really great, robust breakout strategy, you need to milk it. As much as possible. And that can only be done with a cutting-edge, original position-sizing framework.
So, now you know in essence all the secrets of my hedge fund.
Hope you find this inspiring.