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Systems Trading - Learn To Build

Feb 15, 2021

One of my core concepts about trading is stacking edges. If you don't know what an edge is in trading then we REALLY need to talk! 

An edge is a quantifiable/statistical advantage with a certain asset class, a trading strategy or you yourself, as in you can focus incredibly well for example. 

When you can stack multiple and complimentary edges together, you can come up with some really powerful trading systems. 

One of the most important tools in my tool kit, is categorizing the market regime. If you've read any of my emails lately then you are well aware of what I'm referring to. 

Categorizing the market regime gives you valuable information about how the market is trading and you can then apply the appropriate trading strategy to the market instead of trying to use what worked 2 times last week (out of 10) or for the past few years. 

This market is completely different than that market, and it warrants a completely different strategy. 

The Vol...

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Fed Day and the longer term picture

Feb 15, 2021

It’s Fed Day today, otherwise known as the day that all the crankiest, smuggest of all participants are screaming over each other to claim the end of the world, with an accompanying chart that has a trend-line that was broken or chart of the recent selloff of the DXY, with no further context.

What follows are hoards of Middle Skill traders rushing to their TD Ameritrade accounts to buy MORE puts on SPY, TSLA and some complex option structure on Eurodollar Futures (not EURUSD).

Who know’s, this time they may finally be right!

Rather than get everybody all worked up about the Dollar collapse, China, Covid19, the US Presidential Election, and a thousand other obviously priced in events let’s have a look at where we are historically in all the currencies. 

Here's the $DXY monthly chart

The first thing I notice is that we are pretty much at normal historical levels today, perhaps even up to the top end of those normal levels. The two big spikes way...

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This weeks Trading Lab livestream October 29, 2020

Feb 15, 2021

Rather than my weekly newsletter talking about what's happening, I decided to share todays LiveStream in the Trading Lab

In the Trading Lab we do multiple live stream market reviews, talk through markets, theories, setups and Q&A's. 

This is todays session.

In addition to this type of content, we interact 24/7 in our private Slack group, working with each other on different systems, market analysis and at this point, keeping people from making bad trades until things clear up a bit.

For Example, Kyle and Grant, two lab members have built a new daytrading strategy for the FX market, that is built to the requirements that multiple prop trading firms have for trying out. Another member Abhay, has also coded their strategy up in TradingView and they are having some great results with it. 

Check this out on GBP.

It's not just me in there sharing my ideas and trades, this group is packed full of real prop traders, hedge fund traders, family offices. Real professional traders...

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Q and A for the Trading Lab

Feb 15, 2021

Things have finally fallen in to shape for the Trading Lab. 

I've updated the Q&A for the Trading Lab below and also updated it on the website. 

We will be live again Monday morning at 10:30AM New York time, get signed up and ready to crush the upcoming trading week ASAP

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What Is The Trading Lab?

The Trading Lab is a place for experienced fully funded prop traders and aspiring prop traders to work together, as a team, to make consistent returns day and swing trading the markets.

What Is Prop Trading?

Prop trading (proprietary trading) is when an individual trader trades capital for a trading firm. There are numerous prop firms and programs that exist today which offer amazing opportunities to traders who can successfully manage risk and earn consistent profits.

What Markets Do We Trade?

In the Trading Lab we focus on trading Forex, Futures, Equities and Crypto. 

What Should I Expect In The Lab?

The Lab is a private Slack Channel where all lab...

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Giving You A Trading Strategy For Black Friday

Feb 15, 2021

Let's get right into it  

Yes it's Black Friday and yes we have 50% off deals for you  

But...  

Even if you aren't taking advantage of these deals and you only subscribe to the emails, I value you!  

I'm giving you one of my trading strategies, even if you aren't taking advantage of the Black Friday deals.  

This strategy is exactly what you'd be able to build yourself if you owned the Systems Mastery Course and implemented the techniques from the Consistently Profitable Trader course.  

There are members of the Trading Lab who have built equally good strategies and shared them with other members of the lab.  

The lab is a Journeyman/Apprentice model. That means if you are struggling through becoming consistently profitable in your own trading, there are more experienced, successful traders in there to mentor you and help you get profitable.  

And one of the best...

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Two lab members built this system

Feb 15, 2021

I've been sending a bunch of emails this past week for Black Friday and Cyber Monday, yes we have a 50% discount and yes I'm going to pitch it....again!

But first let me provide you some value!

I wanted to share the work that two traders in the Trading Lab and alumni of the Systems Mastery course have collaborated on. 

The reason I teach the FVBO strategy is because it is a very high win rate strategy. That's easy. But one of the other reasons I teach it is that it teaches people how to trade mean reversion strategies. 

Mean reversions are breakouts that FAIL. 

This happens about 80% of the time, so markets actually breakout only 20% of the time. But most traders are always trading breakouts, which is a big reason why so many traders fail. 

It's very difficult to be wrong 80% of the time. That's 8 failed breakouts, by the time you get to trade number 9 you are fatigued, discouraged, lost a bunch of money and it's hard to stay optimistic. 

On the other...

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Pollinate Macro ETF Portfolio Strategy

Feb 15, 2021

Over the past year we have been live testing the Monthly Macro ETF Strategy and as we wind up for the year, I want to share the results to date. 

As you know we are systematic traders using quantitative edges to make money trading the markets. Our trading is all about finding predictable, repeatable trades that can be scaled up.

Our main job is to categorize the market regime first, once we have that part figured out we use that info to identify the unique characteristics of these market regimes. 

Regimes happen all the time, intraday, overnight, during the market open, between the open and lunch, market close, as well as on daily, weekly, monthly and yearly basis. 

The higher you move up in time the more powerful, and informative the regime classifications are. For example using the last 100 trading days informs what environment we currently in and how we can apply that to daily swing trades and even/especially intraday daytrading. 

But what really gets me...

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The Main Edge To The Macro ETF Strategy

Feb 15, 2021

In yesterday's email I introduced you to the Pollinate Macro ETF Strategy, showing the results of our 25 year backtest and 1 year forward test. The summary is here if you want to have a look. 

Today I'm going to talk about one of the biggest edges that the Macro ETF Strategy was built on. 

Recency Bias. 

Recency bias is a cognitive bias that favors recent events over historic ones. A memory biasrecency bias gives "greater importance to the most recent event", such as the final lawyer's closing argument a jury hears before being dismissed to deliberate.

Or a better way for our purposes, a market that has just been going sideways for years failing to breakout time and time again. 

How many times have you been sucked in to a breakout setup only to watch it turn around just as you jump in, and stop you out?

After a couple of attempts and stop outs, you just walk away. Only to come back and look at it again a few weeks later,...

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Systems Trading is Boring

Nov 26, 2019

Systems trading is by far the most boring way to trade

You know that you are either going to win or lose on the trade

You know how much you are going to earn or how much you are going to lose +/-

You know what time of day to review your setups

You know when you need to update your profit targets


You know when you are going to stop out of positions

You know how much money you will make that month

You know how much money you will make that year

You know when your system is broken and can turn it off

You know exactly how much money you need to use to achieve your financial goals

You know when you don’t have anything to do for the day

You know when you are going to be a bit extra busy (20 minutes instead of 10)

 

The only time it isn't boring is when you don't follow your systems rules, then there is no predictability and whatever the outcome you have no clue!

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