The Hunter Becomes the Risk Manager

All we can ask for as Traders is to have the best weapons at our disposal in order to tackle the markets. And these weapons become worth their weight in gold if they help identify trades with significant edge while minimizing or fully eliminating the chance for human error to get in the way and muck things up.

For nearly 13 years, my friend and colleague Michael Nauss has been continuing down a road of self discovery that has revealed to him, among other things, that there is an inverse correlation between his screen time and trading profits. The more he sits in front of the screens tapping keys, entering and exiting trades, the less profitable he is. This is not a hunch. He’s studied himself and run the data. It’s a fact.

This revelation led Michael down a rabbit hole of exploring ways to automate parts of his trading process so that he can free up head space to focus on the areas where his human brain can actually add alpha to the process, while letting machines handle the heavy lifting of scouring markets for the best opportunities with statistical edges behind them.

What follows is a discussion of the process Michael went through to arrive where he is today, some trading lessons he’s learned along the way, and a glimpse into the future of trading tools that has both of us extremely excited:

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~ @chicagosean