TuringTrader’s Felix Bertram — An engineer’s approach to investing in the stock market

Smarter Trading Podcast Episode 3

TuringTrader’s Felix Bertram joins us in Episode 3 of Smarter Trading to share his quantitative approach to investing in the stock market.

We discuss why he decided to build a backtesting engine from scratch, the importance of tools and rich reports for traders to truly understand how they’re doing, ingredients to profitable momentum trading systems, and a whole lot more. Please enjoy this episode!

About Felix Bertram

Felix Bertram is the owner of TuringTrader.com and the designer of the site’s model portfolios. Felix’s background combines a strong technical foundation and a master’s degree in electrical engineering with business experience from multiple innovative startups and an MBA. He started venturing into finance and quantitative trading out of frustration over financial services and available investment products. Felix’s approach to investing is purely technical, with a strong focus on diversification and risk management.

Watch the interview in video here

Episode show notes and Felix’s book recommendations

► Stocks on the Move: Beating the Market with Hedge Fund Momentum Strategies: Clenow, Andreas F. Amazon.com: Books
► The Alpha Formula – High Powered Strategies to Beat The Market With Less Risk: Larry Connors, Chris Cain, CMT, Connors Research, LLC. Amazon.com: Books
► Conquering the Seven Faces of Risk: Momentum Strategies Avoid Bear Markets, Enable Fearless Retirement Planning: Juds, Scott. Amazon.com: Books
► Author Page for Wouter J. Keller : SSRN

Key learning points

► Traders need comprehensive reports and tools in order to measure and improve their strategies
► Backtesting strategies unlocks insights that would take a discretionary trader decades to learn
► Running a meta-portfolio of strategies reduces the risks all strategies fail at the same time
► Markets like to throw surprises that you can’t possibly account for ahead of time
► Focus on one simple market concept at a time without making it too complicated
► Markets are not as efficient as people make them out to be
► Backtesting strategies unlocks insights that would take a discretionary trader decades to learn
► Tips on getting started to code and testing trading strategies
► Always compare a strategy performance versus a benchmark

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Episode timestamps

0:00 Introduction
1:35 Felix’s background
4:05 Felix realizes professional money managers weren’t doing that great
6:40 How Felix begins investing his own money: breakout strategies
10:30 Felix realizes he needs better reports and more metrics to improve his trading
13:35 TuringTrader project is born, a new open source market simulator
19:00 Felix’s book recommendations that influenced the next phase of his investing
25:40 The benefits of having multiple systems instead of just 1 system
32:32 The dangers and risks of backtesting
37:20 The benefits of backtesting and quantitative trading
42:30 Do you need to understand why a strategy works?
44:50 Base requirements needed to trade a new strategy
47:00 What it means to trade successfully
51:00 About the TuringTrader project

Highlight clip: The benefits of backtesting for discretionary traders

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