Richard Brennan joins us today to discuss the current global risk factors that could cause a large liquidity event, what the term ‘outlier’ really means from a Trend Follower’s perspective, the role of currencies in a Trend Following portfolio, the point at which diversification can end up diluting returns, whether different asset classes should be traded on different timeframes, some thoughts on pyramiding, and defining ‘non-linearity’ when discussing Trend Following models.

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In this episode, we discuss:

The increasing global risks that could cause large market selloffs
How a Trend Following trader thinks about 'outliers'
The role of currency pairs in a Trend Following system
Diversification versus 'Di-worse-ification'
Whether to use different timeframes for different asset classes
Thoughts on 'pyramiding' in and out of positions
Rich's explanation of the term 'non-linearity squared'

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Episode TimeStamps:

00:00 – Intro

02:09 – A huge thank you to listeners of the show for leaving your 5-star reviews on iTunes

02:31 – Macro recap from Niels

11:17 – Weekly review of performance

17:10 – Q1; Adam: At what point does diversification become dilution?

22:32 – Q2; Mathew: Have there ever been any years where currencies were your top performers?

32:09 – What the term ‘outlier’ really means from a Trend Follower’s point of view, as well as some thoughts on the terms ’non-linearity squared' and ‘pyramiding’

01:02:36 – Benchmark performance update

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