037 – Stop Losses with Cesar Alvarez

Cesar Alvarez studies stop losses

In this episode we’re discussing the results of a quantitative study on stop losses completed by Cesar Alvarez of Alvarez Quant Trading. Cesar was also a guest of the show way back in Episode 3.

Cesar was director of research for Connors Research for almost 9 years, developing quantitative trading models for individuals, prop traders and hedge funds.

In this episode he’s going to share the results of a quantitative study on stop losses, also testing out some common pieces of trading advice to see if they’re actually true.

Stops can have such a huge impact on trading results so I’m sure traders of all levels will find this research invaluable.

We will be discussing backtesting results and some charts. We’ll do our best to explain them for those listening along but if you’d also like to see the results while we discuss them, you can download a copy or even watch as a video in the sections below.

I hope you enjoy Cesars discussion of ‘Stops – the Good, the Bad and the Ugly’.

In this episode we discuss

  • Different types of stop losses, their application and performance results
  • Percentage vs Volatility based stop losses
  • Intraday vs End of Day stop losses
  • Trailing stops vs Targets
  • Some common trading statements that are often assumed to be true and the results of testing them – do they hold up?
  • The levels of Stop knowledge, which level are you at?

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Resources mentioned in this episode

Watch the Video

Quotes

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