Against the Trend? Why Bowmoor Capital Limits Their Portfolio to 21 Markets | Open Interest 5

In this episode, Moritz Seibert speaks with Gareth Abbot and Richard Liddle from Bowmoor Capital, a trend following firm based in the UK. Gareth and Richard explain why they decided to go against many trend followers and limit their investment universe to 21 markets - a “compact” portfolio - and why additional markets would likely dilute the return stream they aim to generate. We also speak about their portfolio construction process which includes the combination of 16 systems and results in what they call “smart pyramiding” in and out of positions. Finally, we touch on dynamic position sizing.
#toptraders #investing #trendfollowing
Episode Summary
02:09 - Introduction to Richard Liddle and Gareth Abbot
05:19 - How did they get into investing?
09:43 - Why trend following?
13:55 - Solving the market puzzle
15:36 - How they designed their strategy?
18:46 - The reason for their market selection
24:18 - Why exactly 21 markets?
31:13 - How did they design their system?
39:47 - Why they don't trade hundreds of markets
42:08 - What timeframes and models do they work with?
50:13 - Controlling the heat
55:31 - What is "heat" in a portfolio?
57:26 - How do they manage the heat?
01:00:06 - How they use dynamic position sizing
01:05:00 - Thanks for listening
Full episode can be found here:
toptradsersunplugged.com/oi5
Subscribe to our podcast:
iTunes: itunes.apple.com/us/podcast/t...
Spotify: open.spotify.com/show/2OnOvLb...
Follow us on social media:
TWITTER: / toptraderslive (@TopTradersLive)
FACEBOOK: / toptradersunplugged
INSTAGRAM: / toptradersunplugged
SOUNDCLOUD: / toptradersunplugged-com
Bowmoor Capital: / bowmoor-capital

[@pcguy2]

Amazing series

[@piphunter]

Another Great Series. I love listening to show and all the different ways your guests approach the market. Would it be possible to include how the guests perform their research? Not the secret sauce of course, but do they test and model in C+, Python, etc. How are they executing, intraday, time slices, etc. are the orders going through an inhouse system or are they using the TT platform or some like that?