My guest today is Tushar Chande, a trader, author,co-founder and head of research at Rho Asset Management in Switzerland. Chande has had a long and distinguished career in technical analysis; he brings a unique perspective on how to look at the markets as a trend following trader. He came to America and earned his Ph.D. in metallurgical engineering from the University of Illinois in 1984.
The topic is Trend Following.
In this episode of Trend Following Radio we discuss:
- Early influences, and chart the journey from his days as an engineering student to his accomplishments as a systematic trend following trader
- Analogy between sports and trading, how the best sportsmen rely on having a stable and predictable environment (unlike the markets)
- Evaluating performance within the context of the market
- Discretionary trading v. systematic trading
- Learning through “trial and terror”
- The Rho Trend Barometer and the ability to quantify the environment
- The problem of indexes
- The Sharpe ratio
- The importance of market movement to trend following trading
- “The black box disease”
- Trusting your system
- Cognitive biases
- The benefit of the “black swan” and outlier events and why these events are so beneficial to a trend following system
- Whether “one-hundred Ph.D.’s are better than one”
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