Better System Trader

037: Quant trader Cesar Alvarez discusses stop losses, including intraday vs EOD stops, volatility vs percentage stops, trailing stops vs targets, which is best?


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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 be explaining them for those who are 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 show notes page at bettersystemtrader.com/37.

I hope you enjoy Cesars discussion of 'Stops - the Good, the Bad and the Ugly'.

In this episode we discuss
  • Different types of stops, their application and performance results
  • Percentage vs Volatility based stops
  • Intraday vs End of Day stops
  • 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?

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

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