DM

Dave Mabe

Things Dave Says on Podcasts

“I bet there'll be a lot fewer tokens used over the next couple years among traders in my space. … It's almost kind of a brag now that you use so many tokens, but maybe that won't be the case in a few months and it'll be more like you'd be bragging about how discerning you are about which projects to work on, or you're bragging on your project taste.” — Dave Mabe, Ditching Hourly “Backtesting software is more complicated than Claude thinks it is. There's stock splits, reverse splits, corporate actions. There's all sorts of things that can skew your backtests if they're not accounted for. And the first thing that Claude's going to do is, yeah, we can write a backtester, Jonathan. No problem. And then two months later, they realize they've got this big pile of technical debt that they don't even realize.” — Dave Mabe, Ditching Hourly “They're not good at trading itself. Like Claude's never made a trade, right? And so I think a lot of people get caught up. I see a lot of traders in this situation where because Claude is so good at programming, they think it's like some oracle that's good at everything.” — Dave Mabe, Ditching Hourly

Where to Find Them

Dave Mabe has been a guest on Chat With Traders and Ditching Hourly .

Recently: “Dave Mabe - AI Overconfidence in Systematic Trading” on Ditching Hourly (November 2026); “318 · Dave Mabe - The Shift to Systematic Trading — Building Backtested Confidence” on Chat With Traders (February 2026).

What They Said

“I bet there'll be a lot fewer tokens used over the next couple years among traders in my space. … It's almost kind of a brag now that you use so many tokens, but maybe that won't be the case in a few months and it'll be more like you'd be bragging about how discerning you are about which projects to work on, or you're bragging on your project taste.” — Dave Mabe, Ditching Hourly

Dave Mabe predicts the flood of traders building with AI will narrow to the few things that move profit and loss, and that token spend will stop being a status symbol.

Ditching Hourly · 2026-11-12 Permalink → Listen →
Ditching Hourly Around 52:03 into the episode
Dave Mabe

And it sort of gives them more, ultimately, it gives them more confidence in what they're doing. Because if you, if somebody came to you and you gave them the answer and that was it, like that, they still have to come to it on their own and really understand and internalize it.

Jonathan Stark

…you know, a, a, not a recession economically, but like a receding of people are going to get bored of it or it doesn't really work and they decided to go back to gut instinct. Or do you think even if there's a small drawdown in the attention in this group, is this, is this the inevitable future?

Dave Mabe

I, so I, I bet there'll be a lot fewer tokens used over the next couple years among traders in my space. And I think that because I, I, I, I, I see a lot of traders will make these dashboards that are sort of fun to look at, but they're not really contributing to the bottom line. And I, and so I see a lot of traders doing projects that don't really matter that much, but are fun to look at. And they feel like they're really powerful. But I, I think there's only going to be a certain number of things that you can have Claude do that really can contribute to your profit and loss. So I think over time, people will hone in on those more and it'll be, you know, how it's, it's almost kind of a brag now that you use so many tokens, but maybe there'll, maybe that won't be the case in a few months and it'll be more like you'd be bragging about how discerning you are about, you know, which projects to work on or you're bragging on your project taste.

Jonathan Stark

Yeah. Yeah. It's seeing a similar pattern in the straight up traditional developer space where people are, you know, you go, I was just talking to someone, they said they went to a get-together over the weekend with a bunch of software developers and they're all showing like, oh, look what I look…

Dave Mabe

Yeah.

Jonathan Stark

It reminds me of the, it's a little bit like when I would go to a barbecue in 2009 and people found out I was a mobile consultant and they're like, I've got an idea for an app. Nobody says that anymore. It's like, it's, it's just this gold rush type of mentality almost, but with no gold. So I mean…

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.
“Backtesting software is more complicated than Claude thinks it is. There's stock splits, reverse splits, corporate actions. There's all sorts of things that can skew your backtests if they're not accounted for. And the first thing that Claude's going to do is, yeah, we can write a backtester, Jonathan. No problem. And then two months later, they realize they've got this big pile of technical debt that they don't even realize.” — Dave Mabe, Ditching Hourly

Asked for the most common mistake among traders using AI, Dave Mabe says it is having the model write their own backtester instead of teaching it an existing tool. The model underestimates the edge cases.

Ditching Hourly · 2026-11-12 Permalink → Listen →
Ditching Hourly Around 39:17 into the episode
Dave Mabe

…mistake I see or the most frequent mistake I see now is people using Claude to create their own backtesting software. So there's lots of backtesting software out there that works. And a much better approach is have teach Claude how to use the existing backtesting software. But the first way is that

Jonathan Stark

because intuitively they probably have the or certainly intuitively on my part, I might have fallen into the same trap because I know it's good at making software. So why do you think it doesn't work?

Dave Mabe

I think you like backtesting software is more complicated than Claude thinks it is. And there's all these edge cases, there's stock splits, there's Reverse splits, there's corporate actions. Oh, wow. There's all sorts of things that can skew your back tests, like can skew your data if they're not accounted for. And just not anticipating that. And the first thing that Claude's going to do is, yeah, we can write a back tester, Jonathan. Yeah, no problem. No problem. And then, you know, two months later, they realize they've got this big pile of technical debt that they don't even realize. And they're just kind of stuck. And

Jonathan Stark

I mean, unlike perhaps a non-technical founder who's building, you know, what they think is the next greatest to-do app, someone who's using it to build their own back tester is losing money.

Dave Mabe

Right.

Jonathan Stark

Most almost certainly. Yeah. So they notice. It's not just technical debt, it's debt.

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.
“They're not good at trading itself. Like Claude's never made a trade, right? And so I think a lot of people get caught up. I see a lot of traders in this situation where because Claude is so good at programming, they think it's like some oracle that's good at everything.” — Dave Mabe, Ditching Hourly

Systematic day trader and former CTO Dave Mabe on the central mistake he sees among traders using AI: assuming a model that writes good code must also be good at trading.

Ditching Hourly · 2026-11-12 Permalink → Listen →
Ditching Hourly Around 31:14 into the episode
Dave Mabe

Right. And that's a, it's a really, it seems like it should be really easy. Hey, look at this chart and come up with code that trades stuff like this, but it's actually quite hard to do that.

Jonathan Stark

Doesn't sound easy to me. It sounds like it sounds very hard, but I do have the intuition and the experience that at least the frontier models are unbelievable at spotting patterns that the naked eye can't see.

Dave Mabe

Right. So, but what they aren't good at is like, so they're not good at trading itself. Like Claude's never made a trade, right? And so I think a lot of people get caught up. I see a lot of traders in this situation where because Claude is so good at programming, they think it's like some oracle that's good at everything.

Jonathan Stark

Yeah, it's a God.

Dave Mabe

Right. So they end up having Claude do all sorts of things. Like, you know, the classic example is, okay, Claude, you know, give me a strategy that works.

Jonathan Stark

Well, that would be the right, that's where I would start.

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

Collections They Appear In

Agency Business