Creating Effective Trading Models | Andreas Clenow

Welcome to PART 2 of our talk with Andreas Clenow!
On our continued conversation with Andreas, we discuss the research and work that goes into making his trading model, how he deals with risk and drawdowns, and how he explains his models to potential investors.
In this episode, we will dive into how clear and explainable a trading model should be, and what questions you should ask firms before investing in them.
Thanks for listening and please welcome back Andreas Clenow.
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In this episode you'll learn:
- How to deal with risk and drawdowns.
- How Andreas explains his models to potential investors, and the work that goes into creating these models.
- What questions investors should be asking him about his trading model.
- The kinds of risk management that he uses in his model.
- What he does to measure the environment on trend following.
- What he thinks about sector allocation and diversification.
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You can check out the all of the notes and full transcript of this episode right here:
www.toptradersunplugged.com/92/
You can watch PART 1 of this interview right here: • Simplicity in Trend Fo...
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[@Stm9287]

Around the 11 minute mark I noticed Andreas mentions trend following hasn't had the same performance as the 80's or even 90's.
Niels, could you elaborate as to why performance hasn't been so great?
Are any managers able to use more leverage to reach the same returns while staying in business?

[@TopTradersUnplugged]

It is true Steve that as an industry returns a lower. Some of it is by design, because Institutions have become the dominant investors in Trend Following and CTAs have sought to cater for this investor group by lowering their volatility...and there by their returns (IMO). But not all Managers. Also Central Banks have done a better job at keeping growth at a low but stable level...so few boom and bust cycles, limiting the number of trends (I think). BUT this does not mean that it will continue like this and I think 2020 has already shown that the world is full of surprises and the best way to invest in an un-known future is by having true diversification in your portfolio, and I think that Trend Following is a VITAL component in achieving this.