Chat With Traders 038: Kevin Davey – The Development Process of an Algo Trading Strategy, From Objectives to Live Trading
20 snips
Sep 17, 2015 AI Snips
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Research and Avoid Over-Optimization
- Do extensive research using books and testing when starting on algorithmic trading, especially before the internet era made information accessible.
- Be cautious of over-optimizing trading systems to avoid curve fitting and unrealistic expectations.
Transition to Full-Time Trading Challenges
- Kevin made the leap to full-time trading in 2007-2008, boosted by his performance in trading championships with over 100% returns.
- He underestimated the capital needed and found trading psychologically harder when funding both trading and living expenses from the account.
Benefits of Multiple Strategy Trading
- Trading multiple strategies across diverse markets smooths equity curves and reduces risk from any single strategy failing.
- Managing many strategies makes it harder to override or "cheat" your systems, preserving discipline and consistency.