TLC Weekly Update July 19, 2019

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It has been an extremely busy week since I arrived at Hong Kong this past Sunday. Being busy and having a hectic schedule are not really something that pose serious challenge to me. But the hot weather is. I was effectively sweating all day going everywhere. It was only made tolerable because of the breaks I got from going inside air-conditioned buildings …

It is a more personal trip for which I am meeting with my family, across multiple generations, quite a number of times. We do not get the chance to see each other that often. It is good to see people family members are doing fine. Time is short though since I will head back to Toronto this coming weekend.

One thing I notice is that the price of everything has rise significantly in Hong Kong in just half a year since I last visited the place not long ago. I ask around to see if my observation is correct. It turns out many fast food chains and retail stores are increasing their prices due to the upward pressure of labour costs.

I was rereading the book The Magic of Thinking Big by David Schwartz on the plane. Before all these movements of self-help and all these talks about better performance through the building of proper perspective, we have this book explaining it all way back when. It is still the one that I recommend most to young adults because of the way the message is delivered.

Looking ahead, this coming week will be as hectic as the first one since I have been providing strategic portfolio allocation advices to my clients. I am also in talk with potential investors who are interested in some of my business ventures. Even though I do not usually get myself directly involve in running the start-ups I invest in, it is a great idea to spread the words when the opportunities show up.

Weather forecast is saying that it is going to rain all week long. To me, that means lower temperature. Yay!

Have a nice weekend all!

TLC Weekly Update Jun 28, 2019

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In the blink of an eye, it is already Friday. I have so many things to get done I lost track of time. It is nice to sit down and take a short break here to review what happened this week.

The progress on completing the technical part of the Emini day trading course is taking much more time than I anticipated not because of the materials are not there. Seriously, I have all these day trading strategies written eons ago. Translating them into TradeStation is not difficult at all. But, in order to explain certain things, I have to use the TradeStation optimizer and taking screenshots of the results. And that is a huge pain in the neck as TradeStation is very slow with its optimization process.

I am so used to optimization at 10 times the speed, I thought I can get these things done in an hour and next thing I know the estimated time to completion is extended another few hours. Since I cannot get people to switch to NeoTicker and its Grid Optimizer, I guess I have to live with this until it is done.

For the giant book list on DIY day trading mastery, the second instalment is now ready. Finally, some books directly related to trading are included. The next set of books will probably takes some time to prepare due to an unforeseen circumstances. Namely, as I flip through the books, I find many of the good ones are no longer in print. I am still trying to figure out a way to include them because I am sure you can find some of these books in the libraries or other book places.

I moved up my travel schedule to Asia from August to July. It is primary for family matters. Hopefully the internet will be good enough there for remote access to my work.

And thanks to all of you sending me your suggestions on what to do next with webinars. I am organizing the materials to see which one will get the go ahead first. I will keep you all posted about the progress.

To my fellow Canadians, have a nice long weekend!

TLC Weekly Update Jun 21, 2019

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Happy day.

I get my edited draft of The Emini S&P Day Trading Course back. Read it through twice. Fixed up some minor issues. I have this part of the editing completed. So what’s left is to polish the code of the day trading strategies featured in the course and have them ready for download. Of course I need to take screenshots, write and rewrite parts that I am not satisfied with, but I know I am dashing through the finish line. It always feel good to see the completion of a project.

For the big list of books on trading, I finally give in to reality and split it into multiple parts. First part is just posted.

I told my premium members to look into buying gold producer ETFs at the end of 3rd quarter last year. Looks like the comeback play worked out with more upside likely. As I explained to my readers, in order to win big on the long term moves in gold, you need to leverage on the gold producers. These gold producer ETFs holding the major gold companies are the perfect vehicles with lower risk comparing to holding gold or gold ETFs directly and better reward too.

Now that Facebook is going to release its own crypto currency, the validity of the block chain technology as an alternative to money printed by the governments is now turning into reality. We need to pay close attention to the development of crypto markets from now on … As a minimum, at least take the time to understand some basics about them. Here is a good intro video about blockchain published by Wired.

Have a great weekend everyone!

My Journey to Fully Automate My Trading: Reference Account First Month Results

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The result is in with the first month of trading the reference account using Big-Game Hunter ES at Striker. There are quite a number of things I learned over the month about the service. It is a good thing that I am trading real money with Striker myself so that I can further refine the trading strategies I planned to offer through them. Let’s go through the results and discoveries one by one.

First, the month has a net loss of $2820.80 all fees included. So it is down 18.8% for the month. It is not an outlier comparing to historical performance. So on the surface it is a typical month for Big-Game Hunter ES. This being said, I will add a monthly return table in the Big-Game Hunter ES page so that it is easier for traders without prior experience in this type of trading to see how the equity fluctuates.

Here is a chart capturing all the trades for the month.

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What is more interesting, however, is that if you know what happened during the month, you would notice that quite a few of the trades taken were stopped out because of news shock caused by Trump making tweets suddenly in the afternoon. Although I cannot tell for sure that these trades would have worked out fine without those news shocks, I know it is not likely that they all experience the worst case scenario either. So, it is something worth monitoring to see if such events continue to interfere with the performance. If so, better protection scheme has to be deployed using higher resolution data.

Another observation is that on days that the disruption of price movement caused by POTUS all resumed the original path the next trading day. It is as if whatever he did, only affected the day trading crowd.

Since I am trading the strategy on Tradestation myself and also through Striker, I get to compare the fills of the trades to see if there is any issue with Striker’s automation. Here is a table of the trades taken and a comparison of the actual fills.

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From the one month experience, it looks like there is a consistent slippage against the strategy with fills at Striker. However, the actual net effect of the trades were magically at zero thanks to one of the outlier better fill of 2+ points. I really don’t know what to say about this until I get more data to analyze. Let’s say I am just glad that the result so far is comparable.

I could not write up this post last weekend because I do not have a good way to capture the daily statements with the reference account. I ended up doing this manually. Without automation this will be very hard to do going forward as I planned to release more trading strategies with Striker. For now I guess I have no choice.

On my own account, given the chaos that is expected during the coming few weeks, I decided to delay the increase of contracts until next month. Hopefully POTUS will be done with his trigger happy tweets by then. I am not worry about Big-Game Hunter ES not going to perform though. I am going to deploy another set of trading strategies with my account soon, it is better I keep things as is so that I can compare the results more easily.

Have a good one!

TLC Weekend Update May 24, 2019

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The long process of updating daytradingbias has now entered the final stage. It sure takes a long time getting it mobile friendly, reorganizing the content and (damn it) adding security measures to protect the site from hackers. As I wrap up this project, I am very happy that my time is finally freed up so that I can focus on my other projects. Off my head the list is quite long already – automated trading service, 2 books and several training courses.

This will surely keep me busy for a long time!

My first webinar on day trading the emini worked out alright. The platform I chose is very easy to use and not much post-production effort needed to make the webinar available for replay. Going forward I will do more webinars regularly. Long articles are good for presenting information concisely. However, when the concept takes 3 times or more the length of a long article to explain, it is very hard for people to stay focus reading it through. Webinar can resolve this issue beautifully.

I just completed re-reading the book The 80/20 Principle by Richard Koch. You may have heard of the 80/20 principle or the Pareto Principle but to truly understand and fully utilize the concept it is extremely useful to read the book at least once. By learning from the examples, you can get ideas on how to improve not just your work but also on all other areas in life.

Summer finally arrives here in Toronto. First day above 20C. I wonder how is the cottage country (Muskoka, Huntsville, Parry Sound, etc.) up north doing. There were very serious flooding almost everywhere up there several weeks ago but we are not getting any updates from the news about the situation. It is always nice to go there in the summer to enjoy time in nature.

Have a nice weekend all!

My Attempt on a New Format of Communication: Doing Webinars on Day Trading E-Mini S&P

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The hectic struggle against hacking of DaytradingBias is now over. Thanks to all the parties involved, we managed to contain the problem for the time being. We are still experiencing a moderately high rate of attacks but they no longer affect the normal operation of the site. So life back to normal despite a delay on quite a number of projects.

Catch up time!

I am exploring the possibility of doing webinars on a regular basis. There are times that writing an article on a subject just cannot get the message across. The long form writing that I do, often dig deep into the subject but the distilled information can be hard to understand if the reader does not have the same context in mind. Many topics like certain concepts in trading are very difficult to understand so maybe an interactive format would make it easier.

I asked my team to explore on the technical front of what is necessary to make this happen. We are doing testing right now to see which platform works best. The consideration also includes how to record these sessions so that they can be made available in the future.

First webinar will probably be hosted in June or earlier if the technical issues are taken care of quickly. All of my premium members are invited to join. Tentatively, I will go in-depth explaining how to turn some of the day trading biases I explained before into day trading strategies that fit your particular need. The focus will be on E-Mini S&P as usual since majority of my premium members are Emini day traders.

Don’t worry if you cannot participate in the webinar. The recorded session will be made available to all premium members. The trading strategy codes used in the session will be made available in the download area as well.

It will be an interesting challenge.

See you there!

My Journey to Fully Automate My Trading: Can’t Believe Two Months Have Passed

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Last week marks the end of my second month of automated trading. It was a relatively quiet month with not much activities. Since everything is working smoothly, it is time to raise the number of contracts again. It will be interesting to see what happens when volatility picks up again at this all time high level in the indices.

My reference account is now opened at Striker. Interestingly, due to various delay, the actual trading started from May 1st. It is now trading Big-Game Hunter ES, my first trading strategy offered there. As part of my plan to make things as transparent as possible, the actual statements will be made available for download. It also opened the door for me to openly discuss the trading results without the issue of legitimacy.

I will work with my team to figure out how to offer the viewing of the statements more effectively.

Striker will also have a page in their site reporting the actual results based on the accounts trading Big-Game Hunter ES. I will post the link and other related information by the end of this month.

Next step for this project is to get more trading strategies to go live. So back to development mode and focus on getting these other strategies ready!

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?

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.