Line Your Own Pockets

Michael: 00:00

Hello, everyone. Welcome to another episode of Line Your Own Pockets, a special episode where we did a 100 of these. Can you can you believe it, Dave? We've done a a full 100 episodes.

Dave: 00:11

I cannot believe it. Yeah. It's it's it's exciting. And I just barely noticed last time Yeah.

Michael: 00:17

As I looked,

Dave: 00:18

he said, oh, wait. We're next one's gonna be a 100.

Michael: 00:21

And that was told this story before, but, know, when Dave approached me almost two years ago, I guess we'd been doing one a week, so we almost two years ago now. He's like, hey, you wanna do a podcast on on on system stuff? And I'm like, oh, that's cool. In the back of my head, I'm like, you do, like, couple months worth maybe, and then we will run over ideas. And and if you guys could see the doc that we store ideas, there's there's probably ideas on there that we've put on there day one and just haven't gotten anywhere near touching because just, like, more interesting or more, timely stuff just keeps kind of popping up in the way.

Michael: 00:57

So, yeah, I just thought this would be like a quick kind of flash in the pan, maybe be a little cool, you know, fun to, you know, I was like chatting with Dave. I didn't did not think two years of, like, constant and Yeah. With with no end in sight, I guess we could say for for listeners out there.

Dave: 01:14

Yeah. Do you remember what I told you? Like, very first conversation, I said, we're never gonna run out of ideas.

Michael: 01:20

I know. And I just I, again, shout out to you because I I did not agree. I'm like, ah, you know, yeah, we'll go. And then if we run out of ideas, then it it just ends, and that's fine. But, yeah, I did not think did not think it'd be as big as it is and did not think know, you because we were talking, and we're like, as of recording this, like, couple subscribers away from a thousand on YouTube.

Michael: 01:43

We're not putting, you know, any promotion or advertisement money or any like, it's all been pure organic kind of growth, and it's been great. But speaking of numbers, as the numbers nerds out there, what we're gonna do for this special 100 episode is we're gonna take a look at what you guys watch the most, like, was the most downloaded and the most watched episodes, and then also what we like the most, and then we will tell you guys why you're wrong and why we're we're right in our our picks at the end. So I I have the data here, and I've already shown we don't know what we're gonna pick, but we know what you guys watch the most. And, you know, we'll quickly kinda talk about them. But did any of the top, I don't know, say five or 10 that the the viewers watched the most, any of those surprise you at all?

Dave: 02:29

I'm not surprised to see some of these in the the number of views, but I am surprised that none of my picks are in the top 20.

Michael: 02:40

Me neither. None were in my none were in the top 20 for me either. So for the viewers, just, you know, gonna list some of these off. The top three are all, part of our AI series of of how we're utilizing, AI as a tool to help us trade and and make decisions and and build algos and and streamline kind of our workflow entirely. That doesn't surprise me, partly because this is just a new exciting topic for everyone, partly because it it's probably partly algorithm driven.

Michael: 03:15

Right? There's so many people out there watching AI content and and learning AI content that, you know, that they're getting kind of presented AI content to you. So these were, you know, far and away the the largest watched. And, you know, quickly, if you found us through that, again, let us know. And also, while we're doing this, let us know, which ones were your favorite.

Michael: 03:41

And if you're in The US, we're gonna just grab a couple people from the comments and and reach out and fire you guys over some T shirts, which I noticed that neither of us are wearing. So we probably should have, put one on there. But, yeah, it just it doesn't those top three, I guess, I don't I don't think that would surprise anyone. It's just everyone, you know, especially in our community is super interested in AI and what it can do for us.

Dave: 04:06

Yeah. You know, it reminds me when I came when I approached you with the idea for this podcast, one of the ways I've described it to people is it's the only podcast designed not to go viral.

Michael: 04:19

Yeah. So Yeah.

Dave: 04:21

When I see like, this is sort of AI has sort of created a situation where, yeah, that's gonna attract a lot of attention. Mhmm. It's somewhat go viral in our, neck of the woods. So, yeah, it's kind of understandable to see that up there, and and that makes sense.

Michael: 04:41

And so then number four was actually our interview with Marston Parker, which it's funny. And, you know, if you're watching this, Bryce, and this is no no shade on you, and I'm sure you'll agree, but we have interviewed Brett Steenbarger, who's wrote written a whole bunch of books, and and Mike Belafuri has been on here as well. And he's, you know, pretty famous, I guess, you'd say in the in the trading industry, it's been around for a long time. But I think, you know, part of it is with Marston is that he built a systematic trading software, and he is a market wizard in the market wizard series for systematic trading. But, yeah, number four, most kind of downloaded and and watched there.

Michael: 05:21

That was a great interview. Again, if if you haven't checked it out, he was he was great. He's very humble on, you know, his trading journey and successes and failures and and all of that. And he built the software that I personally use for my own my own trading and and back testing, at least for the you know, at least for the the daily charts, the swing trading, that kind of stuff.

Dave: 05:44

Yeah. I think RealTest, you know, they have an enthusiastic user base. So and I know he happily sort of promoted the the interview to his user base. So, yeah, I'm I'm not surprised to see him up there. And, yeah, he's a great interview, great guy.

Michael: 06:04

So number five, and we'll just maybe just hammer through the top five before we get to ours, was very interesting, choosing your back testing software. And this is one that I know that we had a little bit of I think this was one of the most valuable for when people are starting trading because it's it's the tool that you're going to spend the most time with. It might be interesting to actually revisit that episode, I was thinking when I was looking at that, because things have changed since then. Not necessarily with those softwares. I bet you those softwares are are very, very similar, but just with AI, as as part of it.

Michael: 06:43

Because I find I am weaving between Amibroker and RealTest more and more in which I don't really use either of them anymore. I'm using, you know, Claude as an interface, and it's, you know, picking the right tool, but sometimes it's doing some initial things with one that it does better and then transferring those trades into another and and and, you know, doing this kind of intermingling of of both those softwares. That might be an interesting one to, to relook at. And if you're gonna brand new here, that's I think it's a great, like, where to get started is, you know, getting choosing what software that you're going to use in order to to kinda start this journey.

Dave: 07:23

Yeah. I remember when we talked about that topic about doing it on the show. I think you said or I said, hey. We not done an episode on that before. Yeah.

Dave: 07:34

Yeah. So it's sort of an obvious one that we kinda thought we did or would have done by then. But Mhmm. So, yeah, that I guess that kinda shows how timely it is. I mean, there's a lot of things I think about this the topics that we've come up with.

Dave: 07:48

A lot of them have come from listeners. And that's very helpful because when I you know, we both have been doing this a long time. So it's really good to hear from listeners who haven't been doing this for a long time, some of them. Some of them are just getting started. Yep.

Dave: 08:04

Learning lessons that we haven't even thought about for twenty years, fifteen years. So it's just really that that's so helpful for the show and the way you and I think about things and the way I think about back testing in general. So that's very valuable.

Michael: 08:23

Yeah. Because, you know, you do something for so long, there's areas that you just almost take for granted that you think that, oh, I've just been doing the same thing for, you know, years. That I just think that it just is natural and everyone else's, brain the way I am. So I'm gonna list a couple more, and then, then we'll get into to ours. And it's funny, and we should do a challenge on one of these.

Michael: 08:50

So behind that, it's to paper trade or not paper trade. It's obviously about trade paper trading. Interview with Brett Steenbarger. You're probably backtesting wrong. I think that's just like a killer title for that one.

Michael: 09:03

The Column Library, and then it's episode one. So I just wanted to put that episode one was down there at number 10 for two reasons. One, it just shows that the it's not the early episodes that are are naturally getting the most amount of views. Like, lot of these were done much later. And it's the first is someday we have to challenge ourselves to go rewatch that.

Michael: 09:22

I don't we watch I do a lot of content. I do a lot of streams and podcasts and videos. I never watch myself because I hate it. And I think this would be, like, the most cringiest experience on planet Earth because we're probably, so kinda clunky and and not used to each other at all. I bet you it is Yeah.

Michael: 09:42

Nails on a chalkboard to watch episode one of this stuff.

Dave: 09:46

I do. I mean, I know a lot of people go back and listen because I hear probably, I don't know, twice a week, somebody's reaching out to me over email saying, man, I've been binge listening to all of these. It's they're so good. So.

Michael: 09:59

I I hope they listen to a more recent one and then go back and go, okay. I can forgive them because instead of if you start there, that might be that might be pretty hard. And, you know, you you hope that when hopefully we do something like this on episode 200, that it's the it's the same thing where we go, man, do you remember how shitty we were at episode 100? Then we're in the metaverse or something at that point in two years. But alright, let's go let's go one for one with our favorites.

Michael: 10:28

So you start you you do one and kind of say this is your favorite and give give the people a reason why, and then then I'll go with one as well.

Dave: 10:36

I'm gonna go with reverse order. So this is number three on my list.

Michael: 10:40

Okay.

Dave: 10:40

K? Yep. Alright. So number three on my list is create a trusted trading group. And I feel like we have referenced this so many times.

Dave: 10:51

So this is the one where

Michael: 10:53

So this is first of all, and I'll I'll just tell you this. That's episode that's ranking them 66 out of a 100 or 65 out of a 100. So way down there. Like, not many people have watched this one. Regardless of whether or not you're right, we seem to, like, tell people to do it every episode, it seems.

Dave: 11:13

Well, it does show how hard it is, and it's not really a sexy topic.

Michael: 11:19

Mhmm.

Dave: 11:20

Like, as Bella told me one time, networking is a trading skill. And so that's why I had the idea for the episode. And I thought about that a lot since Bella and I had that conversation. And it just sort of coincided with my whole outlook on life, the reason I do the newsletter, the reason we do this podcast. And it's such an important thing.

Dave: 11:49

And I and I really like the fact that I I know that we have a pretty unique take on things, and I like to find stuff that I know is valuable that I don't see other people talking about. So by definition, sort of my favorite ones are probably gonna be the ones that aren't popular, but I do think they're the most valuable ones. And that's that's why I'm picking these. Like, I want this list to be ones that the listener can get the absolute most value out of going back and listening to. Mhmm.

Dave: 12:25

No. I think is is a good one for that.

Michael: 12:27

Yeah. I think that's something that you can and I think those are gonna be a lot of mine as well and things that you can go through and you could listen to regardless of where you are in your trading kind of journey. Right? Like the the how to pick a software. Right?

Michael: 12:47

That's very awesome information for a very specific group of of people. You know, if you're new, that's great. If you're if you've been around for a while, that's that's a little bit harder. But the for me, and I think my picks are gonna be kind of the same. Right?

Michael: 13:08

So I'll start. The first one is keeping track of trading ideas. This is this is one number 24. So I'm not that out of touch, a little bit of touch. But this was number eight, actually, episode eight that we had.

Michael: 13:20

And this was something that I think is hugely important and really, really helped me out because like we've mentioned a bunch of times that when you get started, idea generation becomes like the hardest part. And then it is a shame if you ever have a great idea, and then that idea just completely implodes and kind of disappears. Like I remember, I think last week I told you that I had what I thought was like the greatest idea for a podcast we ever had, like right before bed, and then I fell asleep and I have no idea what it was. I remember like going to sleep and like, just put that in your brain, because that's an amazing that'll be an amazing pod and it's gone forever. It may never come back.

Michael: 14:06

So that this podcast we talked about how, you know, just simple things like I'm wearing an Apple Watch right now, how you can just like create reminders or when you have an idea, capture it as quickly as you can. And then the whole process of of kind of what to do after that and and how to track through it, which is another one now that I'm thinking about that could also be re talked about with AI, because that's another kind of process that can be systematized as well. But I really like that one. Again, it seemed like, you know, top 25 of people did

Dave: 14:36

as well. It's I think that one's way more important now with AI, actually, because, you know, people have a lot more capacity with Claude to do stuff.

Michael: 14:48

So Mhmm.

Dave: 14:49

That, having capturing the ideas before they drift away is an important thing. I remember when I was younger, I thought that this was this would never be a problem. Like, if you got the ideas, you're not going to forget them. Like, why do you even need a process? Like, maybe you're thinking of too many ideas if you can't keep track of them in your head.

Dave: 15:10

I remember thinking that. And I've talked to other like, I think I've heard my daughter say that. But as you get older you realize that you're really increasing your capacity to do stuff by keeping track of these and having a system for doing it is very important. And I noticed that I do if I don't do this, I'll forget stuff all the time, just like you mentioned. I mean, that that's so common.

Dave: 15:37

And it's good to good it's good to have a process for it.

Michael: 15:41

Well, it's it's you for you don't know what you've forgotten, which just sounds weird to say. But, like, you know, you may have forgotten an idea that could have made millions and millions of dollars. Could have been the best trading idea that you've ever had in your entire life. And you may never know that you forgot about it because you forgot about it, and then you forgot that you forgot about it. Like, so it's just it is it is lost to the ether.

Michael: 16:06

And into unless you had a process of of capturing that in some way, even if it's something that you don't approach for a year or so, it just sits on a shelf somewhere until you have time to do it. If you haven't had that process, again, you you just don't know what you've missed. You don't know what's what's now kinda gone. And yeah. So for me, it was, you know, I always had this process and take in in place, but it just as we were talking about it, it's like, man, is really something I I make gotta make sure I'm shored up and and do all this.

Michael: 16:40

And, yeah, I think we should revisit that one because my process of doing this has, like, completely changed since that particular episode where I have, like, scheduled weekly things where it it it dredges up things for me to look at and, like, reminds me about them. It's like someone, you know, going to a bookshelf and saying, hey. You still haven't read this book and does that to you once a week until you go, okay. I'm I'm gonna read that book now finally.

Dave: 17:04

Yeah. Yeah. So that's it's just super important. And yeah. So I'm I'm glad to hear you.

Dave: 17:12

I had I have not thought about that one in a long time. So, yeah, I'm glad that you mentioned that. Are you ready for number for my number two? Yep. Alright.

Dave: 17:23

This one is deep versus wide.

Michael: 17:27

Oh. So what do we do if we have overlap? I because that that was that was my next one too.

Dave: 17:34

Wow. Okay. Mhmm. That's that's pretty telling.

Michael: 17:37

Yeah. If

Dave: 17:37

haven't listened to that one, you should. Yeah. So so why is this one on your list?

Michael: 17:44

Well, first, we'll just summarize for people who didn't. It's essentially talking about there's you know, I think you talked about two different traders. Again, we we record a lot of these. They've been a while. So we we could just be dead wrong about some of this.

Michael: 17:57

But Yeah. You were talking about two different traders, and one basically prioritized a very high kind of EV, high expectancy, but a few trades. So, you know, think of like your sniper mentality. I'm going to take one or two shots a day or maybe one or two shots a week. But I know that most of time when I hit them, I'm going to make a bunch of money versus I'm going to take 100 trades a day and just let those averages kind of play out.

Michael: 18:28

And I think this kind of stood out for me is because I thought, especially as a system trader, that pretty much going wide was one of our, like, main benefits of being a system trader. So it was one of those kind of exposing me to the to the other side of something that I hadn't really thought of anymore because my whole mentality since I became systematic is just take a whole bunch of trades. Like, yesterday in the market, there was a bit of a not to date the the the episode, but there's a bit of a sell off in the market. And for swings, I bought, like, 15 positions yesterday, like overnight swing positions. I know that's just terrifying Dave as we speak.

Michael: 19:09

He's starting to shake, but I I bought like a whole lot of stocks yesterday. And it's just always been kind of the way I've done it is my theory of just because I I can take a lot of very small bets to take a lot of very small bets. And this was just showing kind of the other side of that is that that, you know and it just it it made me start thinking, why not both? Why why aren't I doing that as well? Because Yeah.

Michael: 19:33

As a systems trader, you you can do that. It's very hard as a discretionary trader to say, I'm gonna take, you know, a 100 small trades and one giant one, but we we can do that. It's just one line of code that exists somewhere. Right?

Dave: 19:47

Yeah. The so it also reminds me of another episode, which is not on my list, but it's in in this topic, which is take your best trades with bigger size.

Michael: 19:56

Mhmm.

Dave: 19:57

I think a lot of traders get systematic traders specifically get stuck in, okay. Let me let me take all the trades or let me take as many as I can where yeah. I mean, that's where you can learn a lot from discretionary traders who a lot of them take the opposite approach.

Michael: 20:12

They're Mhmm.

Dave: 20:13

Like like when we talk to S and B Capital, swing the bat hard when you have an edge. Like, figure out when to swing the bat hard. And when it happens, swing the bat hard. That's basically what they do. So there's a lot you can learn from that as and apply to systematic trading.

Michael: 20:32

In that yeah. I think that was a better way to describe it than I did, where I've I've really just been rattling around in my head and and implementing strategies since that episode of taking existing strategies and saying, yeah. Why aren't I, at some point, really kinda just stepping on the gas sometimes and having that be, okay, if it doesn't work out, well, I have all these other little trades that will, you know, you know, have a small expected value, and they'll make a little bit of money over time. But really, if I want an equity curve that's smooth on the way up with, like, upside volatility Yeah. And, right, every now and then, I need to need to hit it, which is why we all hate the Sharpe ratio.

Michael: 21:15

It's the upside volatility punishment. But yeah, it's like every now and then. So I just it's something that I always feel like I will always want to do more of. Like, don't think there's ever a point where you're done trying to figure out where to really kind of step up and and really go after it. And I just feel like that's like a that's like one of those forever quests where it's just like you're always hunting for that, you know, how do I end up doing kind of more and more in

Dave: 21:41

And a certain strategies lend themselves to this approach more than others, and that's also interesting to think about. So as you back test more strategies and and trade more strategies, figure out the ones where this does make sense to do. Some of them it's not gonna make sense in every strategy, but there are some where this is definitely the case. So to and they get you in the mindset of looking for these because, I mean, there's whole trading careers made on figuring out when to to swing the bat big. And there's no and we talk about there's no real difference between discretionary trading and systematic trading when it comes down to it, you know, from a philosophical perspective.

Dave: 22:28

So, yeah, you should be you should be looking for those. And that'll make you better as a systematic trader even if you don't deploy it or if you don't do it as much as, you know, you don't swing the bat as hard as some other discretionary traders to have you thinking about that mindset is is very productive for systematic traders and and your research.

Michael: 22:46

Yeah. Just just continuing to to look at it. So, that's funny because, yeah, that was one of mine as well. So I guess the other one I have, which this is something that I kind of we did a little later, and this is 30 oh, by the way, I should go back that deep versus wide. That's episode 67.

Michael: 23:04

So that's way way down the list there. And then my next one is is episode 38, and that is the ICE method for prioritizing trading strategies. Is that your next one? Is that your

Dave: 23:17

That's my number one also. See you. Michael, this is nuts.

Michael: 23:21

I know. It's it's funny. I I promise. We we specifically said, like, should we tell each other beforehand? I was like, no.

Michael: 23:28

It'd be more fun if we didn't. The reason this one for me, and and I guess we should always summarize for people to see. This is just it's it is what it sounds like. So it's a method for prioritizing where your your work should go. And this is something I had learned from Dave, and this is why it was interesting to me way back because we had a system in trade ideas for building software that used this thing.

Michael: 23:54

And I'm like, that's a really good idea because in a place where everybody wants something different, that's that was kind of the the methodology there. So everyone wanted a different thing for their own trading style and whatever they're trying to do there. It was, you know, and I had this, I had kind of the same problem. I was looking at a big list of trading strategies to go, and I'm like, Well, what do I do next? And just like most things, once you kinda quantify it and systematize it, you can let it go.

Michael: 24:24

And then the beauty of it is that with AI, I actually have a little AI thread or dashboard where I create a new strategy, I throw it into the AI, and it asks me, like, how Claude will ask you questions, and you just click on them. It asks me these questions, and I tell it with what the things are, and it just automatically slots it in so that when I say, okay, I have time now to sit down and work on a new strategy, it doesn't even I don't I'm not looking at this list anymore. It's just pulling out the next one and saying, here, this is what you work on. And I find that so intellectually freeing, because it's it's funny when you don't have a plan like that, it seems like half of the mental capital is just used in trying to figure out what to work on. When when you don't have a boss saying this is the thing you have to work on, it's it's a lot of mental capital gets taken up doing it.

Michael: 25:16

So the fact now that I have this, I just sit down, I go, okay, I've got an hour to work before I have to go pick up the kids. What strategy should I work on? It just plucks one out. It goes, boom. Here it is.

Michael: 25:26

Let's code it up. Let's get to work in in real tests or any broker in in doing it.

Dave: 25:31

Yeah. That's it's so good. And you're right. It's and the way I think about it is, you know, when you first start like you mentioned earlier, when you first start trading, you're gonna be starving for the trading ideas. But over time, you're gonna convert to having the opposite problem.

Dave: 25:48

You're gonna have too many ideas

Michael: 25:49

Right.

Dave: 25:50

And a finite amount of time. And when you get into that situation, there's something subtle that happens where, like, you're there's a disincentive to add something new to your to do list. Right? Because it's getting so big. It's so unwieldy that it's like this cave where things go into it and they never come out.

Dave: 26:14

So why do you wanna add something else to it? But if you're prioritizing that in the right way, there's no reason not to add another one to the list. And it's like almost it's exciting to add another idea to the list. And Yeah. Because it could be and at some point, it's gonna bubble up to be the top priority.

Dave: 26:33

So it's just you're right. It's very freeing to to categorize your list in this way, and it's just a it just makes so much sense. So in fact, I was just on a call yesterday, two traders at SMB. And we've got a whole list of strategies there. And it's like we're figuring out like there's a lot of stuff we could work on.

Dave: 27:01

But there's only a finite number of them that can really, really scale up and move the needle. Like like, which of the strategies can we 10 x? That's the way we're thinking about this. And the other ones, you know, might be fun to work on, but and maybe we'll work on those later. But but the ones we're gonna work on now are the ones we think can 10x the p and l.

Dave: 27:27

So it's it becomes very freeing when you're you can you can really use this method to figure out what to work on and prioritize things in the right way. It becomes really clear what to work on next, and it's really exciting.

Michael: 27:46

Well, I have found it almost almost as freeing as when I just decide to completely let go of my execution, which for me was like a huge like, if you wanna go, like, from time and stress in the market, like, you know, turning all of your execution over, that's like a it's like a 90% reduction in the amount of time you spend sitting in a chair staring at at things kind of tick up and down. And so it's funny to say that it's a close second to that, but it has been because I don't know if it's just my brain, if it's like a, I don't know, ADHD thing or something, but I I have that. I look at a giant list of things to do, and I have, like, the paralysis of, you know, you've got so much to do. There's you don't you end up doing nothing. So you end up staring at that list for thirty minutes trying to figure out the perfect product, and you just say, screw it.

Michael: 28:40

You just you leave and you go do something else. But the whole, just the simple act of, I have a lot of time, let's really sink our teeth into something that's high impact versus me saying, I only have a, you know, a little bit of time. Cause I was one of those, it sounds lazy even just saying it, but I'm like, oh, know, I gotta go pick up the kids like an hour and a half. That's not enough time to really get into something, so I might as well just not do anything and you walk off. And I always do with the example of like exercise.

Michael: 29:08

Like, if you only have 15 to work out, well, you start banging out pull ups and push ups, and you'll be like, it's it's not the best workout in the world, but you'll it's it's great. It's it's moving the needle. And it's the same with this, I can just tailor to how much time I have. If I have a lot of time, then I just want to dig into something that's going to, you know, really be a new thing with new data sources or something just really complex. But if I only got a half an hour, give me something to test half hours like listen, you already have the data, we encode it real easily, you can have a base, whether or not this thing is worthwhile pursuing, we can do that in like fifteen minutes ago.

Michael: 29:45

And it just hammers off these and just it just makes it it combines, like, a purely systematic approach to what's better with also what fits in your life and just allows you to just keep always doing a little bit of progress kind of every day.

Dave: 30:00

Yeah. It's I've seen a lot of traders, very productive, very profitable traders, kinda get stuck in this situation. Like, I feel like I feel overwhelmed. I've got so much to work on. And Claude actually actually I think Claude has made it worse for some of these traders.

Michael: 30:20

Yep. Because If you don't have a system behind it, because you can do anything. There there were some things where it's like, I I can work on these, but to work on these, I need to, like, learn a new code or or it's it is this is so much harder for me that it's not really worth me even thinking about right now. But now all of that stuff is that doesn't exist anymore. So I one example was I'm testing this thing with, like, commitment of traders data, which is like positioning data in futures.

Michael: 30:49

And that was always a project that was gonna be so hard for me because I had no idea how to get the data and to synchronize it. I just I just asked. I just said, you do it. And now so yeah. So basically, for people like me, I was really feeling it because it went from this is the window you need to live in.

Michael: 31:09

You can only do these things that exist inside this box. And that was in a way kind of freeing because I limited the amount of things that I could even bother looking at. And everything else I just kind of put out of my mind for now to now that box is is encompasses everything. So now with more choice, there's that more kind of paralysis that that comes up.

Dave: 31:30

Yeah. Yeah. Paralysis could be a big thing. Even the even with this the tiny project that, you know, Claude could do in, like, a minute. Sounds there's some sort of paralysis that happens if you don't have this nailed down and, like, prioritized and have systems for basically, for creating systems.

Dave: 31:53

Right? If you don't have it, you get in a situation where you know there's some easy stuff to do, but you can't. Like, it's like you can't even get started or you get in this situation where you're, like, in the muck and you can't really make progress in in productive ways. So it's a it's a problem. And I think what happens the way to get out of it is when you're frustrated in this moment, figure out what you could do so that in the future, you're not stuck like this.

Dave: 32:27

And that might take some time to to put the processes in place to get to that point. But it's like it's I think of it a lot when I was a CTO at Trade Ideas, and I knew that I couldn't do all the stuff even though I was the best one to do it. Mhmm. I had to be able to delegate. And the part of delegating like that, you can't turn that on overnight.

Dave: 32:53

You have to put small investments over time to create the system such that the delegation actually works. So it's kind of the same thing with trading. You have to put in small investments that kind of feel counterproductive now or like waste of time now. But you're putting in a foundation so that you're avoiding the situation, the stuck in the mud feeling you have now. But a lot of times that takes some time and some forethought and some doing some things now that feel like they're not productive or that they're not gonna pay off or that they're a waste of time right now.

Michael: 33:34

Mhmm. Well, we were just gonna do the top three, but we got we nailed two the same. So I I picked out another one. So why don't you do one more and I'll do one more? And if we overlap this time, then it's just it's wild.

Dave: 33:48

Okay. Alright. So this is the one that's a little bit different from the other ones on the list. And this is at the interview with Syed Kazimpur.

Michael: 33:58

I just because while you were talking, was picking out my because I only picked out three. And I actually I was gonna do that one. I'm like, no. I'm gonna pick this other one. I was like, I was this close to that one.

Michael: 34:10

Yes. So why don't you summarize for the people? I think that was a really cool one.

Dave: 34:13

Yeah. I love this one because this was episode 11. This was really early. Note, this is the first guest we ever had on the podcast. I was super nervous.

Dave: 34:23

Like, I've never done an interview like this. I didn't know this guy. Just just but but I saw his the paper he posted, which was called Finfluencers. And the conclusion there was the more followers somebody like a trader has on social media, the worst their trading strategy is or the worst you know, the the worst idea would be to follow them and follow what they're saying. Yeah.

Dave: 34:58

Which was, like, such a perfect counterintuitive finding. I was like, okay. We have to get this guy on the show. Mhmm.

Michael: 35:05

Yeah. That was I love that one because it it just showed to me, it was more kind of looking at different data sources. Like, you know, I kinda knew that, you know, especially a lot of the big traders, like the huge ones out there are using their audience for the trade and and not the other way around. Right? Won't name any names.

Michael: 35:27

But, you know, if you've got a 100,000 or 500,000 or a million people following you, and you're talking about, like, very illiquid stocks, like, you're not you know, it's one thing is saying, hey. I really like, you know, NVIDIA and this new chip they're coming out with, and I'm gonna buy and hold it for six months. Like, that's, you know, whatever. That that's fine. But if you're, like, if you got a million followers and you're like, man, I really like this penny stock tomorrow, you better believe that guy already owns that penny stock.

Michael: 35:53

And he's not buying it tomorrow. He's he's selling it tomorrow. But what was interesting to me, and and it it I remember really kinda opening up my brain to thinking about alternative data. And I'm like, is there a trading strategy out there where I could because, you know, you mentioned that some of the smaller people actually seem to do better research and have to have better gains than some of the larger. So in my brain, I'm like, okay, we have to fade it one way or another.

Michael: 36:23

We have like, can I short the big guys picks and buy the small guys pick and and do something like that? That think that would be interesting.

Dave: 36:34

Yeah. So that's interesting takeaway you have from it to to have alternate datasets. Yeah. That that didn't cross my mind as we were talking about it and, doing the episode. But, yeah, that's really good.

Michael: 36:49

Yeah. I I just thought of it as, you know, it was because I've always thought about, and it's something now with AI I I explore and I get into a little bit more. But just the thinking about there is there is a world of other things to test out there every time you include one more alternative kind of data source into your into your thing. So so for ex it's like our the column library that we talked about. But, you know, say you're a futures trader and you're just using high, low, open, close, and volume.

Michael: 37:23

That that already opens up like a massive world of of of millions to to infinite combinations of permutations. But then all of a sudden, you include, like, caught data into that, commitment of traders data. Well, now everything else has to be retested. Everything else is, you know, has to be redone. Everything everything has to be.

Michael: 37:41

And I know, like, I was talking to a guy who works I used to work in in the hedge fund industry, and and he's working for one now that you basically rent satellites, and that's their edge. So the whole, like, Strait Of Hormuth, you know, they they rent the satellites to watch the ships to see if they're going through, and they and they look at, like, oil, I guess, tankers, the the ones on the ground, it actually floats up and down depending on how full it is. So they're, like, betting on what the strategic reserve numbers are and stuff like that. So I'm thinking, I'm like, well, you know, you take something like that, and then maybe you go back and you apply traditional, indicators on it. So I don't know.

Michael: 38:22

I've just been thinking probably over the last year or so more and more of this, like, the weirder the data sources, they're like edges out there that are unexplored. And this was one of those things I remember just initially opening my eyes to it and saying, you know, that's something I could potentially grab and and start to apply to other things that I'm doing. Right? Do you short the most mentioned thing on StockTwits? Like, for example.

Michael: 38:46

Right? Is is there a trading strategy for that thing alone? Something haven't gotten to it yet, but maybe someday.

Dave: 38:54

Yeah. I think for for new traders, my hope with this episode was that they would realize that they should not always believe what they're told, and they should have a good process for proving to themselves that something is true or not. It's just so fundamental for trading. It's just you you have to have that. And so the fact that there's this study that sort of shows that in black and white that the the people to get the most attention, you should be ignoring.

Dave: 39:29

Mhmm. Well So

Michael: 39:30

And it's funny. I think I think every trader learns that lesson eventually. It's how much if we can have it cost someone a little less first, because usually that's how you learn the lesson is you, you know, you take a trade based off of something, and then you look back and the guy's like, oh, I made so much money on this trade, and you're looking at your p and l, and he just completely, like, dumped it on you and and ran away. So, yeah, it's like one of those, you're gonna learn the lesson at some point. If you can just hear it from us and then maybe take a small haircut, move on, that'll definitely that'll definitely make us happy.

Michael: 40:07

So, my last one isn't just a single episode, but it's it's multiple that we did. And that was just my whole Amity broker adventure that took place this year. And that's just because that was a very interesting, like, an eye opening experience on not that I'm still not of the camp that, like, one is better than the other. We've been through all this. They have pros and cons and then strengths and weakness and all this, but it was just the fact that, your tool is something that is way more important than people think even with AI because of just so how how differently they act.

Michael: 40:46

You know, the Amibroker was just much more crazy when it came to getting in data and, you know, locking up my system when it was doing certain things. And it was just more of of a battle that it shows that even in a world with AI and even with world with all this, to get pure back testing in systems like that is still a challenge, and it's still a barrier for entry, which I still think makes it an edge in and of itself is that, you know, I beat my head against the wall for a month before I even had data in the thing and ran my first backtest on an intraday chart. And I'm like, most people, 90% of the population of the world is not gonna do this. They're gonna get halfway through and they're gonna go, yeah, I'm just gonna go back to drawing squiggly lines on charts and and and hoping that that makes me money. So it it was an interesting and I because I'm just looking through and there's, like, four of them or five of them that are just my kind of path through Amnibroker at some And, yeah, it was just it stood out in my mind as as something to to chat about.

Dave: 41:51

Yeah. I've heard from lots of traders since then about that series of episodes. So, yep, it it resonated with a lot of people. I wonder so part of what came out of that was the free tools that I've offered for that make the data entry or the the importing of market data so much easier. Mhmm.

Dave: 42:13

So I wonder if we'd had those in place and gone back and and done that. How much impact do you think those would have had on that whole the whole series of episodes?

Michael: 42:24

It would have been huge because I actually have I'm just bringing up the the Windows app. Now I actually just I have a system in place now where every week, Claude wakes up on the weekend and and runs this new process you have, and everything is just updated, kind of automatically. And, you know, two things, right, had to take place is Claude had to be smart enough because in the beginning, it was nowhere near good at at programming any of this. It it had to be heavily, heavily handheld with examples and ideas and and all of that, but, yeah, the whole data part. And then part of it was the which, again, I I might be going back to because you've you've seen there a little better now, but it was using, Polygon initially, and then that messing up and then going to IQ feed kinda after that.

Michael: 43:16

So, yeah, it was a whole, like, comedy of of errors that went through it. But, yeah, the tools you had, or have now would definitely have helped just because it's it just seemed it has somebody who's not a coder and doesn't ever look under the hood. It just seems like I should open up Amibroker, and I should hit backtest, and it should just grab the data from the ether somehow and just and just do it. And it's kind of like how it works in real test because Norgate's got a little app, and the app just works in the background and updates periodically on itself, and then it it goes through in it. I I think what I really just underestimated was the scale of the data increase going from daily dataset to an intraday dataset.

Michael: 44:01

And that that whole bridge, I'm like, it's it's data. It's one zeros. It's, you know, it's a it's a Excel spreadsheet. It should be easy. And just understanding that it was just a different universe in complexity, not because the data is any different, just the the sheer, like, mass of it that was the the problem.

Dave: 44:17

Yeah. I think that's that's very true. And, yeah, it's it's it's very nice to be able to kind of not have to worry about the data now. Because I so I'm you know, I I have this process in place. It runs automatically with the scheduled test.

Dave: 44:38

So I wake up in the morning and my back test database is there fully up to date as of the day before. So that's a it's a huge step. And it's one of those things that yeah. The steps are not super hard to do that, you know, outside of this process. But to have it there automatically done for you, like waiting for you where the data is at your fingertips, it's already done, something else is doing.

Dave: 45:06

You don't have to worry about it. It's one of those things that you don't have to worry about, and it does make the the the whole process a lot more efficient.

Michael: 45:15

Yeah. So so those were our our favorites. And, again, those were those were your guys' favorites. I'll remind you that, you know, go down below and and comment some of the ones that you you liked as well. And if you're in The US, Dave will reach out.

Dave: 45:29

Yeah. Give give us give us your favorite episodes and the reason that they're your favorite. Like, give us some detail. And, yeah, we'll pick out some ones and I'll I'll send you a shirt. They're they're really cool shirts too.

Michael: 45:41

And I'll be interested in in reading them too because like we mentioned kind of at the beginning is that a lot of these topics came from just people asking questions. And then, you know, sometimes both me and Dave get a lot of emails, a lot of questions, sometimes it's just easy to just send a one liner back or whatever. There's sometimes you're like, oh, that's a really good idea for a potential, potential episode. And I would say half. Is that too much to say?

Michael: 46:08

I've come from some sort of a a question or a mention or something where it just really gets you thinking of, you know, outside of your you get on rails, I guess, when you're thinking about things like this is how I think about it, and then all of a sudden someone comes along and asks a question that's well worded enough where you're like, you know, is it time to is is it just something I can instruct you on why that I think this is the best way to do it, or is it something that I really have to rattle around my head to kind of reprove to myself that this is the best way to do it as opposed to just kind of blindly saying, well, it's it's the way I've always done it. Therefore, it has to be the right way the right way to go.

Dave: 46:47

Yeah. I think half of these episodes probably have come directly from, you know, comments we've gotten or but I I think probably all of them have come from, you know, indirectly from interactions I've had with traders and,

Michael: 47:04

you know, the

Dave: 47:05

coaching I do, the trading I do with others. So, yeah, I think this is I I love what this has become, and I hope that I hope we have a 100 episodes more and even more than that.

Michael: 47:19

Well, listen. I thought it was gonna be, like, 10. So I I was dead wrong, but, I guess, anniversary, Dave, if that's what we wanna call it. Happy 100 anniversary. And, yeah, there'll be, there'll be more coming.

Michael: 47:33

Right? We're recording one right after this, so they'll definitely be, it's it's not the end, and I've had a lot of fun. I think we've we've helped put a little good into the world with it. So we'll we'll continue on. So thanks people for tuning in and and listening.

Michael: 47:49

And if you enjoy it, just follow and all that stuff wherever it is. Make sure you get the rest of them.

Dave: 47:56

Yeah. I'm excited for a 100 more. Let's do it.

Michael: 47:59

Alright. Well, as always, I'm Michael Nauss.

Dave: 48:01

And I'm Dave Mabe. Talk to you next week on Line Your Own Pockets.