Trading Nut

343. Trading Nut

343: How He Automated His Way to 3,500 Trades a Year w/ Dave Mabe

Dave Mabe

In this episode, systematic trader and former CTO of Trade Ideas, Dave Mabe, breaks down how he transitioned from manual click-trading to running over 25 fully automated strategies. After experiencing a humbling drawdown that nearly forced him to quit, Dave realized that relying on a single “perfect” strategy was a trap. Instead, he built a process to generate uncorrelated strategies rapidly by changing how he backtests.

Dave explains the fatal mistake most traders make when backtesting: trying to build the final version on the very first run. By shifting to a “wide-open” backtest with zero filters and using custom data columns to optimize, he managed to scale his trading from 350 trades a year to over 3,500. He also shares his exact software stack, how he utilizes Claude to write flawless code, and how a full-time job can actually be your greatest trading advantage.

Podcast Interview

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Dave Mabe

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Key Lessons

  • [05:44] Having a full-time job and trading on the side forces you to focus on a small window, preventing you from strategy-hopping.
  • [11:53] Discretionary traders can look at situations and figure out when to 'swing the bat hard,' but it is a very difficult skill to master.
  • [14:30] My very first backtest of my discretionary strategy actually performed better than my manual execution.
  • [18:12] The only thing harder than coming up with your first profitable trading strategy is coming up with your second.
  • [19:08] The biggest mistake in backtesting is trying to shoot for the final version of a strategy on your very first run.
  • [20:01] Your first backtest should have no filtering; instead, add custom columns for every indicator and optimize using that dataset.
  • [27:44] Scale wide by adding more automated trades across smaller timeframes, rather than just increasing your position size.
  • [30:54] A good backtesting software must be able to scan the entire US equities market and allow custom columns.
  • [39:42] When using Claude to write backtest code, give it a specific chart setup where a trade should occur to let it self-verify.

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