How Much Does Speed Matter in Trading?

In this week's episode of Line Your Own Pockets, we take on a topic submitted by Isaac, a trader I work with.

We discuss:

• When timing/speed matters and when it doesn't
• The types of trading strategies where latency is likely the bottleneck
• How rushing to solve problems can be counter-productive (waiting can reveal simpler solutions)
• Concrete steps to determine if latency is really an issue and how to address it

And much more...

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Before you go!

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I hope to see you there!

Creators and Guests

Host

Dave Mabe

Host

Michael Nauss

What is Line Your Own Pockets?

A weekly show for systematic traders who want to make more money from their trading strategies.

Michael: 00:00

All right, everyone. Welcome back to another episode of Line Your Own Pockets. Another viewer, listener, client question come in about timing. So I'll let Dave just kind of take it away, talk about, get a little bit more detail of what we're going to chat about today.

Dave: 00:17

Yes, this came from a trader I work with named Isaac. And he asked just a very simple question, how much does timing matter? And he brought

Michael: 00:29

this

Dave: 00:29

up in the context of very small timeframes, execution times versus signal time, tick data versus one minute bar data, how much does that matter? So just in general and longer timeframes too, but I think it's a good question. There's a lot here to go over, I think.

Michael: 00:49

Well, and I'm glad off the bat he specified that he was talking about shorter timeframes because that's like the easy, I think uninteresting answer is that the longer your timeframe, the less this stuff may matter. You know, if you're trying to, if you're trying to make a penny on your trade, and if you're like an HFT system, obviously it's going to be very, very important. And just for the other extreme, if you're a long term investor, you know, buying the S and P 500, you don't care that you missed, you know, zero one zero here or there. So that's good so that we can focus because that was going to be, you know, a lot of my contribution to it. As I look at it a lot when it comes to how long am I planning on holding is that how much those edge cases in the long run will affect, which also is, I guess, the amount of times you're turning over your portfolio, right?

Michael: 01:41

That's the real answer is that if you're trading infrequently, it doesn't matter if you're trading super frequently, then little small slippage kind of areas and and time frames may will will add up over time.

Dave: 01:56

Yeah. Well, I think that is you said it's uninteresting. I think it is pretty interesting, you know, the and then you're exactly right. The longer your time frame, the longer your hold time, the less important these things are. So it's a range.

Dave: 02:12

It doesn't go completely away as you get longer because there's still something there to worry about. But it's just less important.

Michael: 02:22

And to specify, I just mean that I'm more excited to get into the nitty gritty, focusing on that short term timeframe because if he came to you and that would have been my first question. I said, how much does timeframe matter? He's like, you know, I have a monthly rotational system that rotates my system monthly. I'd say, what do you care? Right?

Michael: 02:42

As long as you're not taking insane slippage, it's a rounding error, probably what it is, but that's why I think it's interesting. So just so the audience knows we're almost specifically talking about day trading and short term trading. This is where you really, I think, to be more laser focused on execution and slippage and things like that because it will add up huge in the long run if you're not paying attention to it.

Dave: 03:06

Yeah, for sure. And, you know, there's a whole range of strategies where it's more or less important. Even for some very short term strategies, the timing is going to be less important than others where it's going to be absolutely critically important. The most important thing about the strategy is gonna be the timing and the execution time.

Michael: 03:31

So, yeah, so let's just when he's talking about timing, maybe just define a little bit more what he what he's talking about. Is he talking about timing of, you know, the amount of data for back tests, or is he talking about slippage from, like, signal to execution? Or or where is he focused on on that on timing being the most important?

Dave: 03:51

Yeah. So he he uses Xamarin broker. He uses Ameren broker to generate signals in real time and trade them. So my assumption is but there's basically two time types of traders that ask me this question. There are two sort of different topics they have in mind.

Dave: 04:12

One is what you said, like, delay between the signal and the execution.

Michael: 04:19

Right.

Dave: 04:20

The other one is and it's somewhat related where they're backtesting on minute bar data and they have in their mind that, okay, if I can get a smaller timeframe and backtest on that, then my life will be good. Then my problems will be solved. In both of those cases, there's a cost benefit analysis to look at. Certainly in the back, I think it's good to think about this in backtesting versus live. I'd really love to separate those two worlds because backtesting timing is not of the essence, right?

Dave: 05:04

It doesn't really matter that much how long your back test takes. And then when you get trading live, it's going to be a much more important thing. And those are very different contexts and they have very different skills required to do those well. But I always tell people to start with the backtesting first. You'll have a larger database, an Amibroker if that's what you're using, and get the strategy, get a good looking equity curve that you can believe in.

Dave: 05:41

And then you'll be so excited and you'll be ready to jump through whatever hoops are required to get the real time stuff working, which is going to be, like I said, it's a completely different skill set. It's a completely different context, but both of these are important. But really, the most important thing is get a strategy that looks good that you're excited about, and that's going to provide a lot of motivation for this.

Michael: 06:07

Yeah. And I saw a lot of the same, you know, in my time with trade ideas, right, where a lot of the backtesting and data was run with one minute bars. And why I kind of chuckled when you said, okay, my life will be solved if I can just get a little bit shorter timeframe. And then, you know, I think a lot of the question has to be is just kind of like, for what, right? For end goal?

Michael: 06:33

And I always look at it that you can, I think the shorter timeframe you go to some degree, the more complicated things get when it comes to not only the just the testing of it, because like you mentioned, it doesn't really matter? You're just dealing with data or, you know, high, low, open, close numbers for testing, but execution, right? And this is where I think people should really look at it. There's a whole bunch of, I think caveats, I guess, to go through before we answer this question. So you already answered the the specificity.

Michael: 07:04

But I think the the other question to ask is how is he executing? Which you said Amni broker. So is that fully automatic or or systematized where it's like entry, stop loss, profit target, the whole nine yards? Because that could be a place that I think it could really trip people up if they are trying to get too quick and they just can't do it with, you know, fully systematized. They end up building something that looks great on paper, but you just can't hit the buttons kind of fast enough, I guess.

Dave: 07:33

Yeah. And that's a there is a bit of a learning curve, especially with Amibroker to get it to run fast enough to get the signals in time to be able

Michael: 07:44

to take

Dave: 07:44

the trades. He's been doing this a long time. He's got his own robot that he's created in Python. So he's very familiar with this world and he's been doing it for some time. He's been very successful.

Dave: 08:04

So but it is you know, style of trading that he does going to be less timing is going to be less important. And I don't want to go into the details of the strategy he trades, but I just want to point out that there's a whole world where timing, even in intraday trading strategies, isn't going to matter a ton. It'll matter some. There'll be missed trades. And that'll be the indication that timing is of the essence and you can dig in there.

Dave: 08:45

And that's going to be the most important thing to work on when you start missing a lot of trades and you think you can get faster and get better.

Michael: 08:54

That that was actually going to be my my next question about whether or not it matters because I could I could see someone having, you know, the same time frame for their back testers, say one minute bars and executing on the same system, but say someone is doing mean reversion and the other one is doing like momentum style trading. And I could see two of those having kind of wildly different requirements for speed. And then for again, for the listeners, what I mean is like, someone is trying to buy a stock that's tanking, right? And they think it's going to get oversold, and this is roughly an area to buy it. Whereas someone else is taking a stock like as it's breaking out to a new highs and they're trying to buy it.

Michael: 09:34

To me, those are two different games and that in and of itself timing would matter. So you're talking, you know, same timeframe for back testing, same timeframe and same method for execution, but your actual trading setup, those two things are gonna, in my mind, the timing is gonna matter way more because one of them you're kind of chasing price as it goes, and the other one you're waiting for price to kind of get down to a level that's interesting to

Dave: 09:59

you. Yeah. And I want to contrast this with some strategies that I trade that work on tick data, where the hold time is up to one second. If you think about that, that's tiny, right? Timing is going to be absolutely So up to one

Michael: 10:24

one second is like a million years for you. That's the maximum amount of time it can

Dave: 10:28

And that's a very specific kind of strategy that I've trade. And it's not the norm, but it is a completely different technical problem to solve. And you can see pretty quickly how, when you look closely at a strategy like that, how you can improve it and what microseconds of improvement could do. That could mean a significant amount to the bottom line. And when you get into those nitty gritty details, there's a whole different sort of world of technology that opens up that you could explore and might be worth investing in.

Dave: 11:20

So, in fact, there's another group of traders that I work with and they trade a strategy where timing is of the essence. I'm not going to go into any details about it, but let's just say that. And they're using Python. The important thing at this point, because we can see what the fills look like, we can see the delays, converting everything over to C plus plus Now C plus plus is the fastest language. It's very efficient.

Dave: 12:06

It's built for speed. It's harder to deal with. You have to compile it. There's a whole infrastructure that comes with it. It's not as easy as other languages, but it's built for speed.

Dave: 12:21

And the goal would be shave a couple, probably twenty, thirty microseconds, which would be enough to make the strategy significantly more profitable. So what we're doing is we're running two versions of this simultaneously in two different accounts and then comparing the fills over a period of time. You know, it's pretty this is very much an edge case, a very higher level trader. Vast majority of the audience is not going to benefit from moving from Python to C plus plus If you're thinking about that now, it's a rabbit hole you probably want to avoid. But there are some strategies out there in some contexts where the cost benefit absolutely makes that makes the case easily for that.

Michael: 13:28

Well, it's interesting just hearing you talk that it's any there, there seems to be no clear answer for this, right? Because it's like each variable matters kind of independently. So I could see someone for example, that uses, know, you keep the strategy the same, you keep the back testing engine the same, and then all of a sudden you change the execution method from, you know, robotic to manual or semi manual, or even, you know, a slower robot, and then timing may matter. But then if you keep the robot, the execution method the same, and the back testing the same, the timeframe the same, then it's a strategy that matters. So each individual component could either matter greatly or not a lot, as long as you line it up.

Michael: 14:14

And I think you kind of answered the way for the listener to know for sure is that that testing, And we always talk about this part of, you know, probably one of the most time consuming, but I'd say one of the most important parts systematic trading is to look at this is what happened in the real world, and then compare that back periodically to this is what happened in the backtest world or in your kind of fantasy world, and then really align those differences. And depending on if there is a difference, you can start getting really specific with it and start looking at like the tape or the time in sales at the moment of trading and how much volume was going through and all that kind of stuff. But in most cases, what you're hoping is that, you know, you do your trading through the day in your bot, and then you run the back test at the end of the day of the bot, you line them up and they're reasonably close and you go, okay, that's good. It's one of those, you only really need to go crazy with it if you start see sporadic differences.

Michael: 15:15

What I would do is I would say just try to test the limits as much as you can try to get maybe not like Dave, you're up to a second for a trade, but just start trying to trade, you know, in and out in a couple of minutes or a minute or something like that. And as you get closer and closer, I think that's where you'll start to see whatever component of your kind of chain breaks and says, okay, now I need to go look at that. Again, the more you zoom in, that's where it will really show the flaws.

Dave: 15:44

Yeah, and I'm glad you brought up manual trading because that's you know, we talk a lot about automated trading here, and we kind of gloss over the fact that we all started as manual traders. And it was such a huge Like, it was completely obvious to me that I was the bottleneck when I was doing that. And you almost can't even talk about timing or doing experiments like this if you're doing manual trading. This whole other world opens up when you do automated trading and you've got a robot sending stuff for you. But just because you instantly become more like a scientist doing experiments.

Dave: 16:38

And because you're not the bottleneck, you're not looking at your phone when the trade comes in and then going to put your order in or making the mistake.

Michael: 16:49

Hey, You bought decaf coffee by mistake instead of right? Yeah. So many more variables as soon as you put a human in there that introduce that are are really just uncontrollable, if not just incredibly hard to control.

Dave: 17:04

Yeah. And that's really like, there's been a few turning points in my trading career where where it was like, before I did this, and then after, like, I just completely changed the way I did things. That's probably the most important thing is automating the trades I was making. Mean, like, night and day before and after, just the whole world's different. And I like yep.

Dave: 17:31

Like, a very notable thing before and after that moment.

Michael: 17:35

Well, and it was the first thing that that I thought of when when he mentioned timing is because, for me, the turning point to get really systematic with things is when I built strategies that just weren't physically possible for humans to implement. And I, you know, there may be people that are doing that now and they say, well, how important is timing? And to me that is the most important variable. If you're having a system trade for you, well, now we're talking about shaving microseconds, right? A lot of the stuff I do is even like inefficient through webhooks and everything, And it's still triggering in like half a second from when the signal is demonstrated.

Michael: 18:16

And you take that and you compare it out to what a human would be doing. You're talking ten seconds or so, God forbid you're in the bathroom or, you know, like you said, looking at your phone, you know, now you're talking minutes. So if you just look at the, you know, if it was, where can I shave the most? Well, you can shave seconds to minutes by going from, you know, a human execution to automated execution. And then everything after that, it's really starting to, you know, deal with the edges of things and like, how do I go from a half a second to a quarter of a second or, you know, where the it's, you know, you're not saving, you're not shrinking your time on execution by 90 something percent.

Michael: 18:59

Now you're trying to shrink it by like an additional five or 10% here or there in either direction, right? Which can compound in the long run. But if you're not doing that initial 90%, then there's no need to even look at the other stuff.

Dave: 19:13

Yeah. And those small edges, they sound like if you're coming from a world of longer hold times, it sounds crazy, right? It's like, wow, how could that possibly make a difference? But there are multiple situations where that can make a dramatic difference. And I think the way that traders first notice it is when it's completely obvious, and that comes for mistrades.

Dave: 19:46

Like you were just a little bit late and you had this huge winner, then you're sitting on the sidelines because your order didn't get in fast enough. Those are really these huge red flags that are completely obvious to see and usually very motivating. The first time that happens, you're hurt. This is painful to experience this. That's very motivating you know, can be demotivating.

Dave: 20:20

But traders who are in this for the long run, that is a completely motivating thing for them. And that is fuel to improve because when that happens, there's a lot of different things and a lot of different creativity that can come to your mind to improve that. And it's really clear to see what that improvement would mean. It's not theoretical.

Michael: 20:47

Yeah, I use that as, I think, a great litmus test for whether or not the person at all is interested in becoming systematic. And the reason I say that is I know traders who every day I would hear from, Oh, I missed this trade, and I missed that trade, and I missed this. Then they would just not do anything about it and then go into trade the next day. And I'm like, Okay, that's kind of if you're just someone who's complaining about, Oh, I had this brilliant idea, but I missed it, or, you know, I didn't get filled on this trade, and you're not doing anything about it, then that's the, you're probably not gonna become a systematic trader because you're right, that is probably the most painful thing that slaps you in the face when you look at that open order, and when you know, we did a whole podcast recently on whether or not you should cancel that order, but you see that order hanging there, and you know, it's some in a lot of platforms, it draws a line on the chart, and price was just there, and then it just rips, and you're like, well, damn, right?

Michael: 21:47

If that open order was a closed order, you very quickly become a mathematician, because you're doing the math in your head say this is the exact amount of money I would have made, if that order was, know, slightly faster. And then from there that you're right becomes a motivation to say, okay, well now I can't place the trade, I need a system to do it. And if the system is missing it, then the two things I look at is timing and liquidity, which was going to be the other thing I was going to bring up to this person is that, you know, if there is an issue, it's not necessarily timing, it could be liquidity as well, right? The signal could be getting there very fast, but then maybe you're misjudging the liquidity by using last price instead of bid for your calculation or something like that, right?

Dave: 22:36

Yeah, mean, there's lots of things to think about there. I mean, as you were talking, there's another timing thing that it made me think of. When you review your trading, you should be doing that on a regular basis. You should be doing that daily. And because there's so much insight you can get from watching the trades in real time And by the end of the trading day, going back and reviewing and coming up with your to do list, was there any way that I could have done better today?

Dave: 23:15

Is there anything I can implement in the system to improve things so that today would have been better?

Michael: 23:22

And and just so right, the audience knows just for the discretionary traders, I know they'll think what Dave's meaning is not, oh, I lost money today. What should I change in my system in order to make better? You know, you're talking more about, you know, there was a glitch here or some sort of weird execution here or, or, you know, the the fill didn't match what the fill should have done or something more from that, that technical side because we talked a little bit about that, but there's a lot of people out there who will just look at one bad trade or one bad day and they're trying to get that out of their system entirely. But it's more about this is what you know should have happened and this is what actually happened. If what should have happened was a loss and the loss carried through perfectly in the real world, then that's I'd say that's still a good review, and you need to review that, but just making sure that you're not, you're not looking at a bad trade, or a losing trade is a bad trade, right?

Michael: 24:18

It's like, did it execute perfectly? Right? And then, then if that happens for the long run, then you need to go look at your system. But yeah, when you're observing as a systematic trader, it should be how well is from the system to the real world, how well is all that executing?

Dave: 24:34

Yeah, and when you do that, what you're really doing is sort of taking context of your trading and keeping in mind and sort of brainstorming, what are the most important things I should be working on right now? I think that's such a huge thing that a lot of traders just kind of gloss over, or they get overwhelmed because it's such a huge list. But if you can get really good at prioritizing that list and recognizing what the rabbit holes are to avoid, but also recognizing where the money is there and what to focus on. The better you get at that, the better you're going to be over time and your improvement is going to continue to get higher and higher. So you're not just going to improve at a steady rate, at a straight line, but over time, that line is going to continue to get steeper and steeper upwards.

Dave: 25:37

Your improvement curve is going to improve over time. And traders and engineering types, software developers, they're really prone to over optimization, like looking at what are really cool technical problems that might not matter at all to your P and L. So it's a really good skill to be able to recognize the important things. It's very underrated. We mentioned last week the project I did with the Cruncher, I completely over optimized something.

Dave: 26:20

There was no reason I should have done all this work for this shopping cart thing for the cruncher. But man, it was such a cool technical thing to solve and your technical minded people just like, Oh, that would be so cool to do it that way. So it's definitely something to try to get more and more discerning about over time.

Michael: 26:46

Yes, well, amount of time we have to work on things is really kind of all we have, right? So we need to make sure that you're focusing on that. And I do think that that's where a lot of people kind of fall a little bit astray. I do it still, right? I still try to have a very focused list every day, but you can have so much.

Michael: 27:07

And, you know, that's another point when it comes to the timing thing is you have to look at really, let's say, you know, you think that timing is a problem, you should really take stock of exactly how much and whether or not that is the best problem to be solving at the time or right going in and doing something kind of completely different with the same amount of time, you know, Are you going to be 1% P and L return at the end of the year better if you speed up your bot just a little bit versus spending time optimizing a system or building entirely new system that ends 10%, you know, P and L to your year at the bottom line. And then trying to figure that out and, you know, you'll never know for sure. I think you get a pretty good guess if you go and start looking and doing this comparison of, you know, that cost me however much money because it was a little bit slower than I wanted and you know, so did this one and vice versa because what may happen over time is sometimes being slow depending on the strategy or the order might not, it could be a benefit, right?

Michael: 28:14

I've had systems where, you know, putting out that limit order and that limit order comes out a couple seconds late. And as I'm comparing over a number of weeks, I'm actually doing a little bit better. Like this, this forced slowness is actually helping me, which again, up a whole other set of questions and a whole other rabbit hole you have to drop down. So, you know, I think a lot of times, sometimes people may look at slowness as this is the thing I got to fix right now. But like you mentioned, it's just cost benefit analysis.

Michael: 28:44

Is this really the problem? Or are you better working somewhere else and shoring up some other part of your trading?

Dave: 28:51

Yeah, there's been times where a project comes to mind or some technical thing that I would like to solve comes to mind. Then maybe I'm too busy and don't get to it. And then I look back and think, wow, I'm glad I didn't do that because since then I've kind of mulled over it and I've found that it was completely unnecessary or I found this other way that's just way easier. We talk a lot about being in a hurry, being bad for trading, almost any scenario. If you're in a hurry, if you're in a hurry to make a lot of money, if you're in a hurry to make a trade, you're in a hurry to go live and scale up your strategy, it's usually a bad idea.

Dave: 29:42

And this is a good scenario where you shouldn't be in a hurry to do something. Like mull over it. And oftentimes you'll find some way easier way to do it, certainly for really big technical projects or something that you especially if you have a technical brain and you're prone to these rabbit holes. A lot of times being sort of lazy about it and waiting a little bit, mulling over it can give you some inspiration for different ways to do things.

Michael: 30:14

So we know how the person kind of figures out whether or not it's a problem, right? We already mentioned that you run, you know, what should have happened versus what happened and then you see if that's a big kind of bottleneck. And, know, we talked about deciding whether or not it's important enough to work on. But just to give some kind of practical advice before we ended, let's say both those checkout is true, right? He has a system and through Amni Broker or whatever it is, and it's generating signals and that those signals are late, and that's making his real world test versus his back test really misaligned, and it's costing him a lot of money.

Michael: 30:58

Where are just some good places that people can start to look for the problem, right? Once you've determined that, yes, it is a problem. Yes, it's something I have to address. And using that stack, which I think would be a pretty common one from, you know, Amni broker as the back tester to the executor to your broker, Along that line, kind of the best places someone could look?

Dave: 31:21

Yeah, so the problem with these scenarios is sometimes it's, know, maybe you can't look at one day's worth of data and really get the optimal answer. Sometimes it takes many days to be able to look at it. So what I suggest is really breaking down your entire workflow, like the entire process, like here's the step that has to happen. Once that step happens, here's what has to happen, etcetera. And especially if you are doing coding and have control of the code, you can add logging to write log files for each one of these steps.

Dave: 32:08

So it's write the timestamp. It's gonna write the minute bar that it took the base, trade signal from. And then you can go back after the fact, emotions are out of it. You're looking at these log files and you can put timers in there to measure the exact delays at each point. So then it becomes really easy to narrow down exactly where the bottleneck is, or in fact, where the biggest bottleneck is.

Dave: 32:38

There's going to be tiny bottlenecks along the whole way here, but some of them are going be negligible. And a lot of times, putting logging in place, letting it run for a bit and seeing where over a large number of trades, where the delays are and you know, where you should focus your efforts to reduce the delays in the process.

Michael: 33:07

Yeah, because I think that's gotta be the biggest part is, you know, if someone is determined that it's a big problem, the frustrating bit would be okay, how do I solve it? So I think that just little piece of advice would probably get people moving in the right direction to say, okay, for you just got to go through and, and have these logs and make sure that you're tracking that correctly. Because as soon as you find the problem, I'm assuming as someone who's not a coder and use a lot of off the shelf options, that then becomes just much infinitely easier to, to go in and kind of pinpoint and solve. Now, you know, say someone doesn't have, because I was looking at that and saying, well, man, that would take me a lot of work to do. So someone doesn't have those capabilities.

Michael: 33:55

Where do you normally see it? Because I just, you know, could see people saying, oh, it's my internet, I need to upgrade or something like that. Is it usually that or is it usually, in the code you use or do you just find it like, is it usually on the Ami broker side or is it usually on your broker side or, or where do you normally see that there's the biggest kind of lag from idea to kind of execution there?

Dave: 34:19

Yeah, I think it depends on the strategy. And a lot of these problems can be solved by just using a different order type. Another underrated thing that traders could do is get better at looking in at and understanding time and sales data. There's a lot of data there. Most trading platforms provide it.

Dave: 34:45

Your broker probably for rides it. Get good at looking and interpreting that data and understanding why your order didn't get filled, what order type you could have put in place that could have gotten filled, what would the price have needed to be for that? What kind of order could you have put in place that would have gotten you a fill on a trade that you missed? That's a really good skill to have. These are nitty gritty details.

Dave: 35:18

That should probably be the title of the episode, nitty gritty details, because you're going to be And that's what trading is a lot of times. Boils down to very detailed studying of information. And if you're not comfortable with that, then you're going to you're going to struggle.

Michael: 35:40

Well, and that that leads to my my point earlier about how quite often I would say a lot of people look at delayed things and it's actually a liquid, right? So it's not that your orders. So when you're doing the tracking that you described earlier, I you do the tracking all the way out until the broker kind of put in and that order is in there and confirmed. Because if that's happening at a decent time, then you're looking at the other side of things and saying, is it is it illiquidity? Because just from my experience from trading with a lot of people, say, or kind of mentoring and doing that with other traders is that that confusion happens a lot, I think especially if people kind of jump right into systematic trading, and they haven't actually been trying to fill orders kind of manually on their own for any period of time.

Michael: 36:30

So they look at that and they say, Oh, my system's awfully slow. And then it's not slow at all, it's just you're, you know, you're putting out a limit and you're the only guy out there bidding and the stock doesn't trade very much. So, know, it just it, the market runs away from you because you're the only you're the only dude in the stock. And a lot of that can be solved in different ways. And I'm sure that's just completely different podcast.

Michael: 36:51

But I think separating, you know, right, whether or not it is slow or whether or not it's a liquid, I think that's a really big deal.

Dave: 36:59

Yeah. And sometimes those those problems blur a little bit and crossover. And there's different ways to solve that. But the important thing to know is solving that problem and coming to the realization of what you just described that, Okay, wow, the stock's just illiquid. So there's no way I was getting filled no matter how fast I am.

Dave: 37:22

Those kinds of realizations and understanding that deeply not only can help you with the strategy you're trading now, but those insights can help you think more broadly and come up with perhaps a whole set of strategies that exploit that insight. These are, you know, it may seem like a boring use of your time to go dig into this, but a lot of times there's some real hidden gems in there that open up the possibility of completely new strategies once you dive in and figure out exactly what's going on.

Michael: 38:02

Yeah. And I think I think that is a good idea for a podcast. I think every episode we say we got another good idea for a podcast is a lot of people don't look at that as I think the advantage that it is sometimes the illiquidity advantage. You know, it allows us to play in playgrounds where we're not competing with Goldman Sachs and Citadel and all these guys because they're just not interested in those worlds. So that's one to look at.

Michael: 38:26

So as always, I hope this helped. I think you got a pretty good framework on to figure out, you know, if there's a problem and try to figure out where it is, you know, if the problem does exist, but again, another good one. We always love the questions, right? They always lead very thought provoking episodes, I think. But as always, I'm Michael Noss.

Dave: 38:46

And I'm Dave Mapes. We'll talk to you next week on Line Your Own Pockets.