046: Perry Kaufman discusses strategy development and the issues and mistakes traders make when creating robust trading strategies.

In this episode of Better System Trader, Andrew Swanscott interviews Perry Kaufman about strategy development, focusing on issues that can hinder the creation of robust trading strategies. Kaufman discusses his new book, "A Guide to Creating a Successful Algorithmic Trading Strategy," and shares insights on position sizing, risk management, and optimization. He emphasizes the importance of equal risk, intellectualizing parameter selection, and analyzing optimization results by considering the average of all test results rather than focusing solely on the best performers. Kaufman also highlights the significance of diversifying across strategies rather than just markets and cautions against over-reliance on complex solutions like genetic algorithms and neural networks. The episode concludes with Kaufman's advice on temperament, continuous learning, and understanding system faults for successful trading.