Trader Tech Talk 010: Howard Bandy and Trading System Validation

I have a fantastic interview in store for you today!  Today we have with us Dr. Howard Bandy.  I’ve you’ve been reading my blog for any length of time, you know I am a huge fan of Dr. Bandy’s work.   Dr. Bandy has written three very excellent trading system development books, and I am so honored that he was able to come on the show.howard-bandy

In this episode, you will learn

  • How to get through the difficulties in back testing
  • How to validate your trading system and show statistically that it will continue working in the future
  • What you are not supposed to code into your trading system


Here are the resources for today’s show:

Dr. Bandy also provided a reading list of books for us, related to trading, system development, and mathematical modeling:

  • Sam Savage, The Flaw of Averages. Why plans based on averages are often wrong.
  • Daniel Kahneman, Thinking, Fast and Slow.  Where we can and cannot trust our intuitions.
  • Nate Silver, The Signal and the Noise.  Why so many predictions fail.
  • Michael Mauboussin, The Success Equation.  Distinguishing between skill and luck.
  • Leonard Mlodinow, The Drunkard’s Walk.  How randomness rules our lives.
  • John Haigh, Taking Chances.  Using probability to help make decisions.
  • Emanuel Derman, Models. Behaving. Badly.  How quantitative financial models have been used, and misused.
  • Christopher Chabris and Daniel Simons, The Invisible Gorilla.  How our intuitions deceive us.

I am sure you will really enjoy this episode!

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