My guest today is Alpesh Patel, a hedge fund manager, Financial Times columnist and Bloomberg TV presenter.
The topic is his book How to Win at Spread Betting: An Analysis of Why Some People Win at Spread Betting and Some Lose.
In this episode of Trend Following Radio we discuss:
- Comparisons betweens stocks and futures
- What the winners have in common
- Trade frequency, and why active traders tended to do better in Patel’s study
- Buy & holders vs. spread betters
- Academic vs. practical insights
- Whether Patel finds himself at odds with other Financial Times writers
- Why people like to imagine that trend following and momentum trading doesn’t exist
- Patel’s experience as an expert witness with “trend following on trial”
- Why the average person has difficulty with betting small, cutting losses, and letting winners ride
- George Soros, game theory and trading psychology
- Win/loss ratios
- A coin flipping experiment performed with Ph.D’s, the importance of position sizing, and why systems aren’t everything
- Why gut instinct is the opposite of what professional traders use
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