Most Important Of All is Money Management
David Stendahl
by Technical Analysis, Inc.
David Stendahl is an author, a sometime contributor to STOCKS & COMMODITIES, and an authority in the field of portfolio construction and system design. He has lectured at numerous national and international conferences and written articles on evaluation and money management techniques. Stendahl also cocreated various performance analysis software packages, including Performance Summary Plus (now incorporated into TradeStation). Currently, Stendahl comanages Landmark Asset Management, an investment firm that specializes in investing in the global futures markets.Stocks & Commodities Editor Jayanthi Gopalakrishnan interviewed Stendahl on July 3, 2002, via telephone.
Money management is something everyone talks about, or thinks they talk about, but rarely implement.
How did you get started trading?
I've always been interested in trading, and I realized a long time ago I wanted to be systematic in my approach. So over the last 15 years I've developed a lot of trading systems based on my own work. I took a hiatus from trading while I was trying to improve the analysis of my performance. I thought I had good systems, but I lacked the confidence to actually trade them at certain stages.
If you weren't trading, what did you do?
I started to develop a number of software applications that would allow me to evaluate my systems in greater detail. Most notably, I cocreated the system backtester that you can find in TradeStation. Soon, though, I got hungry to trade full-time again.
So what are you doing now?
I'm a trading principal with Landmark Asset Management, a firm that specializes in trading the global futures markets. Along with my partners, Mark Helweg and Gary Knutsen, I've finally implemented the trading plan I've been presenting at national conferences for the past six years.
Can you tell me about it?
In a nutshell, I've been constructing a variety of trading systems, analyzing the systems in great detail, and then creating diversified portfolios based on those systems.
What's the most important thing you've learned?
The most important thing in trading is money management. Over the last 15 years, I've continued to pound out intelligent non-curve-fit systems that should work well in virtually any market. I've been improving a process that allows trading systems to work well together. I take different trading methodologies and combine them to construct strong, well-balanced portfolios that are receptive to money management strategies. That's what I've learned and that's what I think is the key to successful trading.
...Continued in the September 2002 issue of Technical Analysis of STOCKS & COMMODITIES
Excerpted from an article originally published in the September 2002 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2002, Technical Analysis, Inc.