“Markets exist to teach humility – and they are really really good at that.” – Chris Cruden (Tweet)
In Part 2 of our conversation with the CEO of Insch Capital Management, we talk about how the firm’s trading models work and how they were built. We discuss how Insch deals with drawdowns, increased regulation, and marketing. This is a truly in-depth episode into the mind of a hedge fund Founder and the inner workings of an Alternative investment firm.
Welcome to the second part of our conversation with Chris Cruden.
In This Episode, You’ll Learn:
- Indicators that are more robust than others.
“The only input that our system takes is price, so we really don’t look at any indicators per se.” – Chris Cruden (Tweet)
- Chris’ views on stop losses.
- How his firm deals with risk and how he uses Index Risk.
- How correlations play a part in his models.
“A good day for us is when we don’t make any trades, because that means that what we’ve got on is working.” – Chris Cruden (Tweet)
- About risk equivalency.
- how he deals with drawdowns.
- Why a sense of humor is important in this business, especially during drawdowns.
- How investors don’t share the same confidence in the model as managers and how managers can better share that confidence.
“We trade the way we trade because of what we don’t know not because of what we suspect we know.” – Chris Cruden (Tweet)
- How simple his system really is.
- Why you must have discipline. Many trend followers are making all-time highs but many people have announced the death of trend following time and time again.
“Our system is an encoding of old trader’s clichés in many ways and these clichés have been seen to be proven very true.” – Chris Cruden (Tweet)
- What the “black swan” event and the “gray swan” event would be for Chris’ business.
- The two kinds of research that his firm does.
“Of all of our system’s trades, about 60% of them are losing trades.” – Chris Cruden (Tweet)
- Why his team looks at emerging currencies in their research even though they do not trade them.
- What he is looking for in terms of red flags during his research that suggest models need to be tweaked.
- How he tries to stand out from the crowd in order to attract investors.
“Marketing is something we have done really really badly.” – Chris Cruden (Tweet)
- Why he is based in Lugano, Switzerland.
- What Chris would ask David Harding if he was doing the interviewing instead of being interviewed.
- What investors forget to ask him.
- Why it’s a good idea to ask if you can try a dummy account with a new investment manager to see how it works.
- How he deals with the difficulties of regulation.
Resources & Links Mentioned in this Episode:
- Chris suggests the book: Market Wizards: Interviews with Top Traders
- He also suggests: Trend Following: How to Make Millions in Up or Down Markets
This episode was sponsored by Swiss Financial Services:
Connect with Insch Capital Management:
Visit the Website: www.InschInvest.com
Call Insch Capital Management: +41 (0) 91 921 0168
E-Mail Insch Capital Management: email@example.com
Follow Chris Cruden on Linkedin
“I learned almost everything I need to know about this business and trading in the army.” – Chris Cruden (Tweet)