Guest Appearance on the Friendly Bear Podcast
By Dave Mabe
A few weeks ago, David Capablanca invited me on his Friendly Bear podcast. Here are the show notes:
In this episode, discretionary trader and author of Short Selling Master, David Capablanca sits down with algorithmic trading expert Dave Mabe to break down how discretionary and systematic traders can actually work together instead of staying in their own lanes.
Dave has been trading systematically for nearly 20 years and works closely with traders at SMB Capital. He shares practical insights on backtesting, building automated edges, handling small-cap environments filled with algorithms, and how to turn discretionary ideas into robust, automatable strategies.
Whether you're a pure discretionary trader curious about systems or a systematic trader looking to add more edge, this conversation will give you actionable takeaways on collaboration, strategy refinement, and staying ahead in today’s market.
0:00 – Intro & Dave Mabe’s background
1:30 – Working with discretionary prop firms like SMB Capital
3:20 – Discretionary vs systematic traders: mindsets & collaboration
6:30 – Why the best traders look for people who trade differently than them
7:30 – Being a "giver" in trading relationships (not a taker)
9:15 – The typical path: discretionary traders adding automation
11:00 – Can systematic traders go discretionary successfully?
13:00 – Small caps today: algorithms, volume explosion & how to compete
15:00 – Backtesting as a "truth seeker" and path to confidence
17:15 – How much backtest data do you actually need?
18:00 – Best backtesting tools (AmiBroker, Trade Ideas & why they win)
19:35 – How to handle slippage in backtests (without overcomplicating it)
21:00 – Systematizing dilution & warrant checks in small caps
23:45 – How to refine a working strategy by removing bad "pockets" of trades
26:40 – Final thoughts on collaboration between discretionary & systematic traders
27:16 – Where to find Dave Mabe + free backtesting course
-Dave
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