andreas-clenowAndreas Clenow is a quantitative trader and a trend follower. He started his career in the mid 90’s, and made a living out of trading after running an IT consultancy buisness. He is now a co-owner of a medium size fund management company in Zurich, Switzerland.

During his time as an IT consultant he developed his critical and analytical thinking. He doesn’t use one specific trading strategy, but sincerely believes in the power of diversification. It took him a decade to be successful but that laid a solid foundation for where he is at today.

In the podcast Andreas shares:

  • How you target 30% winners in a year and still win big
  • Why long trend following is a viable trading strategy
  • Why you don’t need to believe everything the “gurus” teach you
  • How correlation can help your trading

Your Episode Sponsor:

 

“Number of losers vs number of winners is not necessarily an important thing. We are not in this to prove ourselves right. We are in it to make money.” – 6:40

Recommended Books

Trend Following by Michael Covel
The Buy Side: A Wall Street Trader’s Tale of Spectacular Excess by Turney Duff
Following the Trend by Andreas Clenow
Stocks on the move by Andreas Clenow

Interview Links

FollowingTheTrend.com

Key Insights

  • It is more important to look at how much risk you are taking than how much money you are making
  • Trading is business. There is a cost in doing business. Deal with it
  • Diversify
  • Fundamentals are very labor intensive
  • Use a quantitative approach, break it down in numbers
  • Maintain a certain level of risk
  • Validate education by testing
  • Simulations are the cheapest way to learn trading
  • Learn to program
  • Don’t target high returns

Andreas’ Trading

  • He risk’s very little
  • He focuses on diversification of risk
  • He targets 15% – 20% return per year
  • He focuses on making money than focusing on losers vs winners ratio
  • He opens 20 – 25 positions at a time
  • He looks at the long term
  • He is a trend follower
  • He trades pullbacks
  • He looks at significant price levels

Andreas’ Trading Strategy

  • Take 50 – 80 different futures markets across different asset classes
  • Check the rules of the strategy once per week on a Tuesday
  • Check what the price was yesterday versus one year ago
  • If the price yesterday was higher than 1 year ago, go long
  • If the price yesterday was lower than 1 year ago, go short
  • Target the same amount of volatility per position

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES, OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES, ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL, OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM, WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

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CFTC - U.S. Government Required Disclaimer:

Forex, futures and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. Our website, product contents, and materials are neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our website or in any materials. The past performance of any trading system or methodology is not necessarily indicative of future results. Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets.

Don't trade with money you can't afford to lose. Nothing in our course or any materials or website(s) shall be deemed a solicitation or an offer to Buy/sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.