TLC Weekend Update May 18, 2019

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Anyone notice that my latest articles at DaytradingBias.com and the ones posted here are not written in the same style?

Well, that’s because those articles are now edited professionally before they are published.

To be honest, after seeing how much editing had been done on my books before they were ready for publishing, I know that my English is definitely not there. Since majority of the written materials done on DaytradingBias will be read and re-read by many traders, I’ve decided to have them previewed by my editor first so that we can avoid total rewrite going into the future.

Many of you know that I have a habit of reading books of all kinds. The book I am currently reading is The Subtle Art of Not Giving a Fuck by Mark Manson. I do not know how I missed the original release of the book back in year 2016. Just picked up a paperback copy the other day from Amazon when I was searching for something else to buy there. Odd.

And I am in the process of interviewing people to help me on the coding front. This time it is all about hardcore research and development in trading strategies. It is not progressing as well as I hope for but that’s the way things work. You can’t rush these things …

Just completed the final review of the powerpoint slides for my first webinar this coming Tuesday May 21. I have given lectures and trained traders live on trader floors but using a remote platform is really my first time. If the format is proven useful, I will do it on a regular basis.

The photo is a baby bunny just appeared in front of me when I was walking home earlier.

Have a nice weekend all!

More Trouble from Hackers

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I spent at least 20 hours this week working with my team to defend DaytradingBias from all kinds of attacks by hacking robots. It is mentally exhausting when we think that we have fended off the hackers already and then another class of attackers swamped the site again. And again.

We ended up using multiple layers of defense to protect the site but even now these bots are still knocking at the door.

Although they failed to hack the site so far (touch wood), they are causing inconvenience to my site members.

These bot attacks overwhelm the server from time to time affecting the normal services provided by the site.

I cannot understand why the bots like my site so much.

Very frustrating but I am still hopeful that we will contain the problem soon.

And for those of you curious like where the hacking bots are coming from …. they come from everywhere. If you guess that the majority of these bots are coming from Russia or China, you are wrong.

DaytradingBias was Brute Force Attacked and Luckily Survived

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Last two weeks DaytradingBias.com experienced multiple incidents of database issues causing the site not reachable at times and also database corruptions. Due to the fact that we were doing major updates to the site, we thought it was probably related to the changes we made. I was forced to restore the site to a backup copy and ended up losing several days of posts and updates. Everything looked normal for a day and then the problem resurfaced again. With help from the hosting company and several experts, we finally realized that DaytradingBias was attacked by a swamp of robots.

It was really our fault – when we’ve decided to update the site about a month ago we found that we need to disable the security plug-in in order to install various new functions into the website. We disabled the security plug-in but then totally forgotten about it because nothing bad happened and we were just very happy with the faster and improved backend. Little did we know the site was being probed on its weaknesses already.

The attack was brutal. Based on the logs, there were like a thousand login attempts per minute at the peak of the attack. Although the site was not hacked, thanks to the basic measures we took originally to protect the site without the security plug-in, but the site was so overwhelmed by the amount of traffic hitting it that it crashed several times. We have no idea back then it was an attack.

I learned something out of this experience. First, the wordpress platform turned out to be one of the most targeted platform by hackers. Second, the hackers are way more sophisticated than last time DaytradingBias was attacked years ago.

It was really luck that DaytradingBias was not compromised this time. Hopefully the security measures we now put on is enough to stop similar attacks from affecting normal operation.

For now, my team can finally take a break. Right on Easter Friday too.

Happy Easter!

My Journey to Fully Automate My Trading: Radical Transparency

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One principle I’ve decided to follow in documenting this journey is Ray Dalio’s radical transparency. To be honest, radical transparency may not be such a good idea for many organizations or businesses. For trading and investing, however, it is a very interest model that can root out, if not all, majority of the human weaknesses, from affecting the performance. But I am not doing this just for performance sake. I am doing it for other reasons too.

What Do I Plan to Make Transparent

I have just arranged with Striker Securities to allow automated trading on one of my trading strategies on restricted number of contracts. And I am signing up with them as the first person to trade it. This will allow me to fully disclose the trading results without affecting my privacy in other areas of my private life. There will also be the third party witness, namely Striker, that can track the overall results of my trading strategies traded through them.

So there is nowhere to hide. I will report the results here regularly. I will be held accountable for what the strategies do in the future.

It will be a really interesting experience as I never need to answer to anyone else in public about my trading results.

What I see is that this process will help me discover better ways to trade even faster because of the accountability I put onto myself.

To Inspire

Many traders choose to trade discretionarily because there is really no other alternatives offered to them.

And they are being put into a path of self-destruction without knowing about it.

By putting myself out there, showing them that there is a way to make trading work for them, I hope I can inspire many aspiring traders to sit down and think about their trading seriously. Maybe there is a better way to learn to trade. Maybe it is time for them to look at trading from a different angle.

My point is simple. It is really not necessary to go through the brutal mental and physical challenges to make trading working for you.

Personal Vendetta

Ever since I “came out” to write about trading many years ago, I was and still am being trashed by trolls and enemies I made in the industry over the years. They could not argue with what I wrote because what I presented to the world has been undeniable evidence on how the markets function. So, they thought they are so clever to go for personal attacks. Little did they know that my experience in trading and every part of the industry is something beyond their wildest imagination.

This time, I am going to take this to their doorstep.

Would they dare to do what I am doing here?

FAQ: My Morning Routine

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For some reason people are really obsessed with morning routines lately because all these “successful” people all have their morning routines that help them conquer the world. I get the same question a lot lately so why not share it here.

First, my morning routine follows a pretty fixed structure but the components for each part changes according to my circumstances. I have to adapt to the situation because I have to travel from time to time to look at new investment opportunities and also managing my businesses in other parts of the world. Depending on the amount of time I have before some pre-scheduled activities, I choose among different options to complete my morning routine.

Wash My Face Cold

Where ever I have access to ice or ice cold water, I wash my face with that. And it’s the first thing I do after waking up.

There are many parts of the world where you cannot do that though and washing with normal tape water or even bottle water is all you can do.

But I never wash with warm or hot water.

Simple Stretching

I rotate through different sets of stretching depending on the amount of time I have. So it can go as short as a few minutes or as long as 10 minutes. I may even skip the next step of doing my wake up exercises if I my body is sore from heavy duty training sessions from the day before.

There is one set of stretches I do that came from classic Chinese martial art training. It is a combination of stability, strength and stretch. If I am doing that, I can definitely skip the exercises. I will post a link if I find a video on that.

Wake Up Exercises

A simple combination of doing push ups, leg raises and squats one set each would take less than 5 minutes. I would do that when I have an area to lie down on the ground.

When I have the proper equipment I would do pull ups and other exercises.

This is not full session training. Just a way to wake up the body with the goals of pushing for reasonably higher heart rate and better blood circulation. So using each major muscle group once is enough.

This can go from 5 to 10 minutes depending on the pace and the amount of time I have.

Deep Breathing

The kind of breathing exercise I do varies depending on what I want to achieve for the day.

If I skip the wake up exercise, I would do more types of breathing like rapid abdominal breathing to at least activate the abs.

This takes only a few minutes.

Mind Priming

As oppose to jump into the day to think of what to do and what has to be done, I round up the routine with relax breathing while thinking about things in my life that I am grateful for. It is a very powerful tool that anchor oneself to reality with a positive attitude.

It only takes a few minutes to complete this part too.

This is the last part of my morning routine.

Mind Wandering

When I am not on a tight schedule, I would allow my mind to wander around with new ideas. It may come from reading a book. It can come from reading an article online. It may even happen when I am looking out of my window.

The reason for doing this is that after the morning routine, my mind is at the peak of its clarity from the conditioning. It is the best time for me to figure new things out. Many of my creative ideas from new trading strategies to business planning are coming from this deliberate practice of mind wandering.

End Notes

I complete all these tasks before I sit down for my first sip of coffee.

I do not eat breakfast. My first meal is often my lunch. And my lunch is often done over meetings with my business associates to save time.

If you want to duplicate what I do, remember the following rule:

It is very important to do all of the above except mind wandering to focus on the task you are doing and feel it through your body. Do not think of anything else. You should not be able to think of anything else if you really pay full attention to how your body feels.

The whole purpose of having a morning routine is to condition your body and mind to certain level of higher alertness and calmness so that you can carry out the rest of the day with better decision making which leads to more consistent performance in essentially everything.

Side Notes

Seriously, the routine is essentially the same as practicing traditional Tai Chi correctly for one round. It has all the ingredients choregraphed into its sequence but people rarely realize what they are supposed to accomplish with that. The drawback with doing one complete round of Tai Chi is that it takes more time (30 to 45 minutes) and a lot of space, so one cannot afford to practice that in small place or on a tight schedule.

Ancient people are really smart …

My Journey to Fully Automate My Trading: What I Learned After a Month Into Fully Automated Day Trading on TradeStation

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I still remember the day I launched my automated trading – sitting tight in front of the screen waiting for something to happen. And then suddenly it is already a month since the launch. Time really flies!

Over this month, I actually learned quite a few interesting things that many you will find useful.

TradeStation Second Login

First trouble I ran into was that once the automated trading went live the account is logged in 7/24 from my trading server. So, if I need to develop new strategy or code on TradeStation I have to remote login to the trading server. That is not a good idea because bad coding and human mistakes can interfere with the live automated trading strategies. It turned out TradeStation can provide you with a second login id. The trick is to use this 2nd id only with the sim account so that it does not interfere with the real trading account.

As long as you do not need real-time data on this 2nd login, there is no extra data fees. I now work happily on my laptop with TradeStation this way. It is a very nice discovery.

Fills are Not as Bad as I Thought

Since I am converting my existing models developed on my proprietary platform into TradeStation, I thought latency is going to be an issue. I am pleasantly surprised that it is not the case. Fills are timely and no real slippage.

It makes sense though.

First, the day trading strategies I converted to TradeStation so far are not my HFT ones. They are slower and just need reasonable execution speed. In the past, internet stability and speed were big issues. Hence people like me did highly customized work with co-location servers near / at the exchanges. From the results so far, those concerns are no longer an issue.

Second, infrastructure has improved so much that order routing at retail brokerages are now much faster as well. So, unless you are really into HFT space, retail day trading in this era is pretty level with the institutions.

Latest Generation Computers are Overkill

TradeStation and many other retail trading platforms used to require serious computing power just 5 to 6 years ago. That is no longer true thanks to the improvement in hardware over the past few years.

You can just pick up a cheap 2nd hand computer with Windows 7 Pro for trading for as low as $300-$400 Canadian dollars. It is less than $300 US dollars. The most important thing is to get a quad core CPU so that Windows can run smoothly alongside your trading platforms.

What’s Next

I am converting next set of trading strategies now and plan to incorporate that by end of April. For the first set of trading strategies, I ended up having a complete framework ported over to EasyLanguage. This time, another framework will have to be converted too. I plan to release all these useful code libraries in near future. I just need to figure out how to do it properly.

For example, I don’t see a decent set of functions providing information like holidays and FOMC meeting schedule on any trading platform. But it is critical to know these things even for a normal trader. This is a fundamental tool for building reasonably robust trading strategies yet it is nowhere to be found.

Maybe all the pros are keeping these tools to themselves. Just kidding.

My Journey to Fully Automate My Trading: Peaceful Launch of My Automated Trading on TradeStation

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This past Monday, Feb 25th, I finally managed to get small part of my automated trading strategies ready for live trading on TradeStation. It was one hell of a long journey to convert my algorithms from my custom trading platforms onto a retail broker platform. I learned a lot from the process and gained incredible insights into some many areas in trading that I thought I already know.

As the Chinese proverbs say,

The journey of a thousand miles begins with one step –  Tao Te Ching, Laozi

千里之行,始於足下 – 道德經, 老子

The moment I decided to move onto this path, I know it is going to be a huge commitment on my part to get to the finish line. So many obstacles and road blocks making this project such a huge challenge. I just looked up my blog posts and found that the earliest post about my intention was back in March 2017. That was two years ago.

I was so overwhelmed by the difficulties that I kind of giving up to write about the progress. There are just so many issues to tackle in various areas of trading making it hard to decide on what to write about. I did not write about it but I do keep notes on everything. That’s my habit all these years. I even recommended the practice to all traders in my writings all the time.

This is not the end of the journey though since my goal is to convert multiple sets of algorithms into live trading strategies that work on various retail platforms so more work has to be done.

I am very glad that I have chosen to walk down this path. At this point of the journey, majority of the technical issues are now taken care of. I am at a happy place to say that the rest of the journey will focus on more strategic development of my automated trading. I will have time freed up to catch up with writing about this amazing experience.

I am setting up a page in my blog for this series finally,

http://thelawrencechan.com/my-journey-to-fully-automate-my-trading/

Enjoy the show!

On the Road Soon. Meet Up and Gathering Anyone?

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I expect to hit the road next week. I will be going to Hong Kong and Singapore to meet with my business partners and give out talks about the markets and trading. My schedule is not as crazy as the last few trips. So, here I am letting you all know that if you are interested, we can meet up in Hong Kong or Singapore.

It does not need to be all intense discussions about trading and market directions. We can just chill and get to know everyone.

It will be fun!

Busy Busy Busy … Waiting for 2019 in Excitement!

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I have not posted for a long while here in my own blog. Feel kind of guilty for being so quiet. Here’s an update of what is going on in every front.

The Site Update

DaytradingBias.com has finally got its long deserved update. It is now mobile friendly and ready for the next level of client support. I am very happy with the result so far. I have in store big plans for the site in year 2019. I will announce the new services and products when they become available.

Trading Success Blueprint 2nd Edition

My trading course Trading Success Blueprint has been very well received since its launch. Many long time premium members sent me feedback that something important is missing from the manual. I hear you all and I have just completed three new sections to the manual for its second edition release. Once they are edited properly, it will be made available to everyone who bought the first edition.

In fact I am turning TSB into a live project! I am offering lifetime update for free to anyone who purchased the course. I am also making available a special support area online so that users can download strategy code and other things much more easily. And third edition of TSB is already planned. It will fulfill another request – a forex day trading strategy example.

My Fund

My work on my fully automated fund is 99% ready. I have decided to launch it sometime in January. It is very difficult to port trading strategies created in NeoTicker into various trading platforms. So much of my time was wasted in recreating the multiple timeframe framework in these other platforms. Right now I have everything necessary to move forward with this project.

My Trading Service

A version of the trading model will be made available through brokerages. I will have more details once I have completed the process. For those who expressed interest in the past and present asking me to manage their money, I am very flattered. I think this will be the best way going forward allowing everyone to participate. Due to liquidity issue, the model will be released with strict control on the number of contracts I will allow through the brokerages.

Yet to be Named Course on Advanced Trading Strategy Design using VIX

For those of you who want to learn more on how to create these trading strategies I am using myself, I am still working on the course right now. It is already longer than the 2nd edition of TSB excluding those appendix stuff. It is like an extension of TSB with focus on how to design trading strategies suitable for day trading purpose. I also provided an in-depth look into VIX and its leading properties for swing trading and day trading. It will be the next most important course for anyone interested in building their trading career.

Workaholic? Maybe …

Over the past 2 years, due to various reasons from computer issues to platform glitches, many of the projects I am working on were grind to a halt. Well, by pushing things forward slowly with patience, the efforts finally pay off. It is very exciting to see so many things getting through the finish line at the same time.