Perry Kaufman - You Don't Learn Anything Until Real Money Is Involved

Perry Kaufman is a trader, algorithmic strategy developer and rocket scientist. He has been an active trader since the 1970s and has a broad knowledge of the futures, currency and stock markets.

His seminal book, Trading Systems and Methods, was first published in 1978 and is now on its 6th edition: https://amzn.to/3ZMzcpe
His recent book, Kaufman Constructs Trading Systems, is a fantastic resource for new and experienced traders alike: https://amzn.to/3FajMDl
Smarter Trading is Perry's book that I refer to at the start of the interview, and you can get it here: https://amzn.to/3Yx5FPt
You can contact Perry here: https://kaufmansignals.com/

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In this episode we discuss:

0:00 Start
4:33 Why optimization is not really about "optimizing" your strategy
7: 42 Why index markets are all broadly similar and why trend-following traders should focus on interest rate futures instead
18:19 Perry's first "aha" moment was when he became hooked on the financial markets
21:41 Crisis alpha in the stock market - protect yourself with a portfolio of strategies
24:11 The meme stock craze and what lessons we can learn from it
26:58 Becoming a pro. Trading as a business
30:28 Understanding volatility and how it impacts your risk as a trader
35:22 Why you should always risk something, even if it is a small amount.
36:24 Learning to deal with losses is the most important thing traders can do
36:30 The 3-day trade and why beginner traders should think about using it
43:48 How traders can deal with consecutive losses
45:28 How traders can deal with long-term drawdowns
48:57 How Perry Kaufman has achieved his incredible longevity as a trader