039: Michael Cook discusses position sizing to maximise returns, using the market to determine stop levels and the role of discretion in systematic trading.

We've been very lucky to have a number of trading champions on the podcast before and this episode we get to talk to another champion trader, Michael Cook, who won the World Cup Trading championships in 2007 (Futures), 2011 (Stocks) and 2014 (Futures).

Michael worked in the institutional world for a number of years before leaving behind the banks and hedge funds to trade for himself.

In this episode we'll be discussing how to increase returns with the same risk, using the market to determine stop levels, selecting a position sizing algorithm and the role of discretion in systematic trading.

In this episode we discuss

• How a short statement from Larry Williams influenced Michael to enter the World Cup Trading championship and what we can all learn from it
• How Michael won the trading championship multiple times and the unexpected benefit of winning
• A method to increasing returns for a given risk
• Why market related stops make more sense that a fixed cash amount
• Position sizing algorithms and why fixed fractional is often the best approach
• How to recognise conditions that could cause a strategy to fail before it actually does
• Hard and soft stops, and how to consider the risk of each
• The role of discretion in systematic trading
• Occasions where it make sense to override trading strategies - being more trader than system purist
• Where to find trading ideas