• iTunes
  • Twitter
  • Facebook
  • Google+
  • Instagram
  • Youtube
  • Email
  • Home
  • Courses
  • eBooks
  • Library
  • ET Club
  • BST LIVE
  • Leasing
  • About
Better System Trader

Better System Trader

Better System Trader is the podcast and blog dedicated to systematic traders, providing practical tips from trading experts around the world.

130 – Building Mean Reversion trading strategies with Cesar Alvarez – Part 2

http://traffic.libsyn.com/bettersystemtrader/BetterSystemTrader-Episode130-BuildingMeanReversionTradingStrategiesWithCesarAlvarez-Part2.mp3
Play in New Window|Download

And we’re back for the 2nd episode in this 3-part series on building Mean Reversion strategies with Cesar Alvarez from Alvarez Quant Trading.

In the first episode we discussed the goal of Mean Reversion trading, how to select a trading universe, a number of effective techniques to measuring Mean Reversion and how to combine indicators to identify better quality trades.

If you haven’t listened to that episode yet, you should check it out first here.

In this 2nd episode in the Mean Reversion series, Cesar will be sharing:

  • How to classify market conditions and adjust Mean Reversion strategies to the current market,
  • Tips to choosing trades with a higher probability of success when you have more trades than your account can take,
  • How the maximum number of positions you trade affects the role of luck on trading results and how to produce more ‘reliable’ results instead,
  • Why it can be a good idea to have different strategies that enter at market and on limit orders instead of just one or the other,
  • The impacts of stops on returns and why they don’t often protect you from the really big losses,
  • Implementing multiple exits, what works best in Mean Reversion (and what to avoid) and testing exit combinations.

Watch out for the 3rd episode in the series, where Cesar answers all the questions submitted by Better System Trader listeners.

‘For mean reversion, it tends to be better to let those bounces bounce’ – Cesar Alvarez

Click To Tweet

Resources

  • You can learn more from Cesar at alvarezquanttrading.com
  • Books mentioned in the show:

Share a quote

‘Adding a rule that will make you continue to trade the strategy is a great rule in my opinion’ – Cesar Alvarez

Click To Tweet

‘An error a lot of people do is trying to make a strategy that works in all market types’ – Cesar Alvarez

Click To Tweet

‘Adding a max loss stop will reduce your returns’ – Cesar Alvarez

Click To Tweet

Get the Transcript

Episode Released:

29 October 2017

  • facebook
  • linkedin
  • twitter
  • google+
  • pinterest
  • stumbleupon
129 - Does it actually make sens...
131 - Which strategies work in l...

Related Posts

  • 096 – Could you be throwing away good trading strategies?
  • 037 – Stop Losses with Cesar Alvarez
  • 183 – Overcoming Broken Strategies – Marsten Parker
  • 007 – How to get unlimited trading ideas – Rob Hanna
  • 099 – Where to focus for top trading performance

Comments

  1. Marco

    November 3, 2017 at 4:35 am

    I loved the first episode but now I am a bit puzzled… Cesar is quite a gunslinger!
    He is running two long only and likely correlated mean reversion strategies on US small-medium cap, buying those that fell heavily in the last few days. He does not adjust the size in relation to the volatility of the stock, on the opposite his ranking system favors to buy the most volatile stocks.
    In other words he is looking for the heaviest and fastest falling knife. Wow.
    Cesar is not bothered when one of his position is down 50% and that’s fine, but how to cope with an October 6th – 10th 2008 scenario? He would entry long on the worst stocks and then many of those collapsed. This kind of events do occur from time to time and it’s essential to take it into account.
    Cesar is surely aware of the risk he is running but this topic has not been addressed, I hope we will find something about it in the third part of the interview.
    Thank you as always for your amazing work.
    Marco

    • Andrew Swanscott

      November 13, 2017 at 7:10 am

      Hi Marco, thanks for the comment.

      Cesar and I discuss risk management more in the 3rd episode (episode 133), so take a listen to that, hope it answers your question/concerns.

      Cheers!

Trackbacks

  1. Quantocracy's Daily Wrap for 10/30/2017 | Quantocracy says:
    October 31, 2017 at 3:16 pm

    […] Podcast: Building Mean Reversion trading strategies with @AlvarezQuant – Part 2 [Better System… […]

  2. The ABCs of creating a mean reversion strategy – Part 2 | Alvarez Quant Trading says:
    November 2, 2017 at 1:09 am

    […] This post is the continuation of the steps for creating a mean reversion strategy from the first part of The ABCs of creating a mean reversion strategy – Part 1. You can also listen to part 2 of my interview on Better System Trader here. […]

Want to build robust trading strategies that actually work in live trading?

Click for more details

What pro traders are saying about BST

"Better System Trader is an invaluable resource that I've gleaned tremendous amounts of information from over the years. I wouldn't be the trader I am today without having found this resource. Please keep up the great work."

David Bergstrom buildalpha.com

"The key to better system trading is information.  As a system trader himself, Andrew has unique capability of asking insightful questions that extract the skills of each guest."

John Ehlers www.mesasoftware.com

"Listening to BST is a requirement for everyone on our team."

Bert Mouler profluentcapital.com

"BetterSystemTrader is an amazing resource of valuable information, Andrew is always able to ask the right question at the right time to deliver the best content possible, a must listen for anybody interested in trading!"

Andrea Unger skilledacademy.com

"Professional, to the point and relevant content. Better System Trader should be followed by anyone with an interest in our field."

Andreas Clenow followingthetrend.com

"What really makes the BST podcast stand out is that Andrew is also an experienced trader and can therefore provide incomparable quality and depth in any interview. Thank you for endless inspiration."

Tomas Nesnidal systemsontheroad.com

"Being a trader himself, Andrew drives insightful conversations that uncover gems of practical knowledge that can improve your trading today"

Kris Longmore robotwealth.net

"The Better System Trader podcasts have become an invaluable resource... There's no other podcast around that covers the subject in so much breadth and depth."

Alan Clement helixtrader.com

"Andrew loves traders and draws the most informative and engaging responses out of them."

Art Collins artcollinstrading.com

"Knowledgeable and credible guests talk about useful topics in an interesting and engaging discussion. What's not to like?"

Robert Carver systematicmoney.org

"Andrew is a master at asking difficult and relevant questions."

Perry Kaufman perrykaufman.com

"If I had to listen to one trading podcast only, it would be Better System Trader. I am always learning new things and getting research ideas from Andrew’s guests."

Cesar Alvarez alvarezquanttrading.com

"I get some of my best ideas from listening to other market participants and Better System Trader is a great resource of conversations with trading professionals."

Michael Cook thetradingmasterclass.com

"Andrew seems to have a knack for getting the world's most famous traders to share valuable insights about how they trade for the benefit of the trading community."

Andrew Gibbs halifaxonline.co.nz

"If you have been looking for that little extra nugget to transform your trading, you will find it at Better System Trader."

Laurent Bernut alphasecurecapital.com

"Andrew has interviewed some great people and I have picked up some useful new insights. His integrity, trading knowledge, light-hearted attitude, curiosity and enthusiasm shine through and enhance each of his podcasts. Given the quality of the information and the price (free!) any serious trader would have to be a fool to not take advantage. Keep it up my friend."

Bob Pardo pardocapital.com

"I really enjoy listening to the Better System Trader podcasts. Even though I am in the industry for over 15 years, there is always something new to learn from these. Thank you!"

Martin Lembak striker.com

Trading stocks, options, futures and forex involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.

© 2015 Better System Trader · Disclaimer & Terms · Privacy Policy · Sponsor