Like most things in life, you’ve got to decide which part would you rather play. Are you going to go with the safe thing or are you willing to risk a bit more?

As a trader, which one would you rather be?

In this episode of 2Traders Podcast, Walter and Darren each share their thoughts about infinite variance and what it means to traders. They discuss how to take advantage of it, getting out of trading, using trailing exits, and capturing trends and targets.

Darren’s opinion is that there is no best exit nor best entry to trading. But, is there really none? Also, you might find it here how building your dream kitchen can define

the kind of trader that you are.

http://media.blubrry.com/2traders/content.blubrry.com/2traders/2Traders_EP37_Infinite_Variance.mp3

Download (Duration: 19:10 / 21.9 MB)

In this episode:

01:17 – good experiments

02:46 – “50% win rate system”

03:35 – bell curve

05:55 – only figures that matter

07:58 – take advantage

09:03 – strict rules about entry

10:52 – part of the game

12:26 – regret

14:31 – achievable

15:41 – profit target

16:22 – trick of the eye

Tweetables:

Traders should take note that there is this infinite variance and that it can be good for you. [Click To Tweet].

Which side of the fence do you want to be on? [Click To Tweet].

You have to be flexible and be able to break the system down to simpler form. [Click To Tweet].

Download The Full Episode 37 Transcript Here

Walter: If you believe in this idea of infinite variance, or a lot of variance, a lot of volatility in the markets and you hear a lot about in the financial news and stuff like that, then maybe you want to take advantage of that. There are multiple ways to do that.

Announcer: Two traders, Darren and Walter, pull back the curtain on profitable trading systems, consistent money management, and profitable psychological triggers. Welcome to the Two Traders Podcast.

Walter: Welcome back to the Two Traders Podcast. Walter here. Darren is on the line. How are you today, Darren?

Darren: Really good, Walter. Nice to see you again.

Walter: Guess what, Darren, we’re going to talk about this idea of infinite variance and what does infinite variance mean to traders? Any ideas? Do you want me to take crack of it or do you want to go first?

Darren: I’d like to hear your opinion on this first. Obviously, it’s going to be slightly different to mine.

Walter: Sure. The idea, basically, comes from one of my trading heroes who’s in the “New Market Wizards” book, William Eckhardt. I believe, during his mathematics degree, he bailed out because his buddy, Richard Dennis, got him into trend trading.