Know your trading edge—survive the game · Blair Hull interview

EP 085: Know your edge, exploit your edge—survive the game w/ Blair Hull

Blair Hull has been labeled by Forbes as, “One of the most successful traders of the last 40 years,” and he was also profiled in Jack Schwager’s, The New Market Wizards.

Prior to trading, Blair was a serious Blackjack player for 5-years during the 70’s. From there he took his winnings to the the Pacific Exchange to trade mispriced options, and in 1985, he founded one of the world’s premier market-making firms, Hull Trading.

At its peak, Hull Trading was active on 28 exchanges in nine countries. Then in 1999, the firm was acquired by Goldman Sachs for $531 million dollars.

Today, Blair is the founder of Hull Investments—the parent company of an actively managed ETF, Hull Trading Asset Allocation, and proprietary firm, Ketchum Trading.

Listening to this interview, you’re going to hear more about Blair’s career and his observations as a trader, why he believes great things happen in teams, and why everything revolves around having an edge.

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[ShaolinRopeDart]

@Aaron, love the channel. Suggestion for you. It would be great if you organized these interviews into topical play lists, not just but order grouping. Examples: day trading | options trading | betting strategies | method/edge | long term trading | etc. These interviews often create questions in specific areas, so it'd be great to be able to follow the curiosity flow by topic. It'll also lead listeners down the rabbit hole for hours!

[hamisintunzwenimana]

Great
General
1. Systems Thinking / Strategy - Models
2. Record Keeping / Plan - Position sizing / Statistics

[thrillamoe]

Great interview, Mr. Blair Hull & Haim Bodek are the truth!

[lilboer]

What Blair said about great power coming with teams rather not individuals is something i also truly believe in.. with so many minds just motivated and striving for the same goals..

[markbaugh]

I love the Hull Moving Average (HMA) to determine trade entries and exits designed by Blair Hull. It is the ONLY intra-day moving average I will use!

[ddkxmdo]

Just found this channel, loads of great content. My observation is Blair found his edge and it is taking fees, not performance. Had a look at his ETF, the return is

[goodoboyde]

Great interview Aaron. Really appreciate your hard work and effort.

[lastnamefirst]

While the title excites me the content was disappointing.

‘So how does one develop their edge?’ *Proceeds to say ‘don’t trade if you don’t have an edge’. Provides no clear insight on how to develop one and whether or not you know you have a solid edge without months and potentially tons of capital of testing to prove it.

Shames traders who don’t use programming, in which scripts always show you need human interaction with the market (even if the bot makes money you still need to constantly check it).

I’m all for finding an edge however you can but there’s plenty of 6 figure traders out there who don’t even know HTML isn’t a programming language. There’s many who outshine this guy and they will never learn programming.

Since I don’t want to post a useless comment, please correct me if my edge finding theory is wrong:

I feel you need to look at what rules you feel comfortable following. Why are you using those indicators? Are they simple or complex? Do you understand what the indicator is showing you? Do you understand what metric the indicator monitors? Do you have multiples of that metric? Meaning do you have several volume indicators but no volatility or momentum indicators? How quickly can you screen your chart data? Is there a way to streamline it?

Once you have your indicators, then it becomes practice of how well you can stick to those rules. If a month goes by and you are honestly following the rules (using a journal for confirmation) but are still losing then it’s not an edge and you need to fix something. If it is winning then you do have an edge, or you need to test it for a bit longer if it’s unclear.

Adaptability and discipline are critical as the market constantly changes.

[erfhoy]

does anybody happen to knoow the name of the intro/outro song??

[TrailBlazer]

I really appreciate Blair's perspective. I learned from blackjack basic money management and how to look at the big picture instead of any one particular trade outcome. There are so many things that are the same between gambling with an edge and investing or trading its cool to hear from someone who did it successfully.

[paulojustinianookubo]

!! As all always Aaron doing a great job !! I really like everything he said, however his advice to new traders is really absurd and makes no sense. He said go to school for 6+ years study hardcore and become a programmer ? Well that is not trading and has nothing to do with learning how to trade. If that was the case than many of this new programmers would be making billions of dollars. Learning to trade has nothing to do with learning how to program an strategy. In fact most of the programmer that code and write strategies are not traders. They are guided and told what to do by the traders.

[calabaza]

So if your taking both sides of the trade, your a market maker, right because how would you make money that way?

[RogueMoney]

I believe that as long discretionary traders exist, we can still make money in the markets in the long run. Unless automation becomes the 100 percent player and tradeing will be ☠️ dead then

[hansn.]

Very interesting interview and great sounding insights. Sadly in reality he (at least his etf) too failed to beat the market quite badly.

[beamerUSA]

32:51 Oh I agree here....its possible.

[dominic]

10:00 blackjack team got barred? sounds like the movie 21.

[wnwn]

Grate job man keep it up although today's guest level is way way more than my level it was difficult to understand most of the stuff :)

[joec]

Has anyone been using technician? I've dont get real time data for nyse and nasdaq, they're all 15m delayed. Is this happening to you too Aaron?

[ronschmick]

Glorified latency arbitrage. They drop a lot of money to be collocated. I was expected much more from Hull, very disappointed, Jim Simmons and Renaissance Technologies are much more interesting

[someonenamevalencia]

Has anyone won at penny stock what I mean stocks under 3 bucks :/