SI154: Defining 'Outliers' from a Trend Follower's Perspective ft Richard Brennan
Richard Brennan joins us today to discuss the current global risk factors that could cause a large liquidity event, what the term ‘outlier’ really means from a Trend Follower’s perspective, the role of currencies in a Trend Following portfolio, the point at which diversification can end up diluting returns, whether different asset classes should be traded on different timeframes, some thoughts on pyramiding, and defining ‘non-linearity’ when discussing Trend Following models.
In this episode, we discuss:
The increasing global risks that could cause large market selloffs
How a Trend Following trader thinks about 'outliers'
The role of currency pairs in a Trend Following system
Diversification versus 'Di-worse-ification'
Whether to use different timeframes for different asset classes
Thoughts on 'pyramiding' in and out of positions
Rich's explanation of the term 'non-linearity squared'