The Shift to Systematic Trading — Building Backtested Confidence

Description

When Dave Mabe backtested his strategy, it outperformed his own discretionary trading — and changed how he approached everything. In this episode, we discuss gapping breakouts, expectancy, systematic trading, drawdowns, and the reality gap between backtests and live execution. A practical conversation for traders serious about building durable edge. In this episode, we explore: · How Dave got introduced to markets: From early exposure to investing through his family to actively seeking more control over his capital and moving from swing trading into day trading. · Why rules matter: The transition from discretionary decisions to systematic frameworks — and why trading without a process is a fast path to inconsistency. · Backtesting as a “superpower”: What backtesting really does for strategy development and confidence in your edge. · Reconciling backtests with real life: Practical realities of execution, slippage, and market structure — and how to build a feedback loop so your live results get closer to your imulations. · Drawdowns and mindset: How to handle periods where a strategy doesn’t behave as expected, and why many traders quit in drawdowns rather than at all-time highs. · Scaling a trading business: The difference between scaling size versus scaling breadth — and why uncorrelated strategies matter. · Practical first step for systematic traders: How to start adding structure to your trading with backtesting, even if you’re not a programmer. About the guest: Dave has been a professional trader and technologist for over two decades. As a former CTO of Trade-Ideas, he has unique experience at the intersection of algorithm design, real-time market data, and automated execution. Outside trading, he writes a popular daily newsletter on backtesting and systematic strategy development, and hosts the Line Your Own Pockets podcast focused on systematic approaches to markets. Links + Resources: · Link to Better Backtesting —Dave’s free multi-day email course on building strategies and improving them over time. · Trad