SI64: The difference between Warehousing vs Recognising Risk

This week, we discuss the differences between recognising risk and ‘warehousing’ risk, why Fundamental Investors could benefit from implementing Trend Following rules, Diversification as the most important component of risk management, what Traders can learn from Weightlifters, and the delicate balancing act between simple, simplicity, & complexity. Questions we answer this week include: Is Systematic Investing a form of betting? How do you define a Trend? Should you scale into positions? ----- 50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE ----- Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website. IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here. And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here. Learn more about the Trend Barometer here. Send your questions to [email protected] And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast. Episode TimeStamps: 00:00 – Intro 01:11 – Origins of Black Friday 02:43 – Weekly review of performance 11:45 – Top tweets 40:52 – Questions 1/2: Michael; Can the number of trades a system signals, give insight as to how well optimized the system is? Is there a guideline for the number of trades a system should be signalling, for each chosen timeframe (such as Daily/Weekly)? 45:34 – Question 3: Richard; Comment- ‘No deterioration in the overall compound growth-rate of long-term Diversified Systematic Funds, post-2000.’ 46:53 – Questions 4/5: Bing; Why don’t we risk more per trade? Is trader psychology the main reason for the importance placed on position sizing? 53:21 – Question 6: Jacob; Can you give examples of strategies that ‘warehouse’ risk? 56:41 – Question 7: Nathan; How do we define the parameters of a Trend? 01:01:37 – Question 8: Chad; Do you scale into a position, or go straight to the chosen max risk of equity per security? 01:05:51 – Questions 9/10: Chris; What should I do with surplus cash once my system reaches its maximum number of positions allowed to be traded simultaneously? Has the average margin requirements for Bitcoin changed? 01:11:00 – Benchmark performance update 01:24:44 – Final thoughts; Is it becoming harder to be a discretionary macro trader? Copyright © 2025 – CMC AG – All Rights Reserved ---- PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey: 1. eBooks that cover key topics that you need to know about In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here 2. Daily Trend Barometer and Market Score One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here 3. Other Resources that can help you And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here Privacy Policy Disclaimer