TLC Weekly Update October 4, 2019

image

Over the past few weeks, due to a very hectic schedule and the need to dine out with business partners who love noodles and all kinds of carbs, I somehow gained weight. And it gets very difficult to lose them even if I go back to my regular diet because every other day or so it will be disrupted again. Seriously I need a way to deal with this.

Talking about diet, I came across this piece on chess grandmasters managing their performance through diet and exercise. What strikes me very interesting is not really the part on diet and exercise as I already know how important they are. The most fascinating thing I learned is how the reigning world champion Magnus Carlsen managing his career by playing less instead of more to keep himself in peak performance. This has been what I advocate for years to traders – make fewer decisions in real time and focus more on broadening your knowledge about the markets you trade will improve your performance many times over.

I am decluttering my workspace lately hoping that by rearranging things a bit, I can manage to create a tidy corner in the room for doing webinars and videos. I did not really think of allowing people to see my office so it is something new to me. On the other hand, it is an exciting thing to try because I will be able to do so much more comparing to written articles. Just imagine I can carry out a lecture style session showing specific trading techniques and interact with the attendees in real-time …

And don’t forget to mark this down on your calendar – Oct 15th 4:30 pm I will do an intro webinar at futures.io. After the short intro going through a few slides, there will be a question and answer period. See you there!

TLC Weekly Update September 27, 2019

image

What a productive week! I wrapped up quite a number of projects over the week. Time to have a mini celebration.

First, I finally completed my training course, The Emini S&P Day Trading Course. It is first time ever anyone use this approach to teach people how to day trade. I hope it will set a new standard in the industry and re-define the meaning of trading education.

Second, I get to sit down with my team to figure out what to present in the upcoming introduction webinar this coming Oct 15, 2019 at futures.io, a traders community. I will post more about the webinar when I have more details. For now I just know it is supposed to start at 4:30 pm Eastern Time and I am supposed to do a presentation of what DaytradingBias does.

I came across this youtube video on exercising with just the resistance band. It is what I mean I always travel with that. A picture is worth a thousand words. A video tells the complete story.

Just posted another article yesterday for my series on trading automation. The misunderstanding is so deep, among not just the trading community but also normal folks who get to know about mechanical trading from news of them losing millions (even billions) of dollars, I think I need to voice my stand on this issue.

MY Journey to Fully Automate My Trading: How Do I Know a Trading Strategy Will Work in the Future?

image

I was asked the title question, “How Do I Know a Trading Strategy Will Work in the Future?” and various variations of the same question so many times that I think it is a good idea to address that in this series. As oppose to many advocates of mechanical trading who have a Zen like view of the subject, my answer is very different in many levels depending on your understanding of how a market really function. Let’s dive in.

Many mechanical trading gurus dodge this very question with the concept that you should expect your strategy to stop working one day in the future. And that you would never know when that day will arrive, so you must use proper money management to protect yourself. Yet, at the same time these gurus tell people to use various versions of the Kelly formula to increase their trading size so that a trader can make so much money in the shortest amount of time. In other words, they just don’t know if the very trading strategies they show the world today will work tomorrow but they still lure you to bet everything you have including all the profits you have made over time.

You cannot blame them for doing so because they often discovered their winning trading strategies by chance and by throwing everything they can think of to the optimizer to get the results they have presented. Even they do not know why their trading strategies were working in the past. Hence they cannot tell when and why their trading strategies may fail in the future.

I call my approach Mindful Trading Strategy Design. The strategies are not created by random observations. My research is done in such a way that a set of trading strategies are all part of a neatly integrated framework. One such framework obviously is the application of classic chart patterns. However, majority of the people who work on mechanical trading strategy research are very bad chart readers. They have a distaste of the idea. Instead of finding a way to quantify the time-tested methodology, they focus on using engineering methods to, hopefully, bump into something somehow that looks like they are working trading strategies. What they are really doing is curve fitting of both rules and their related parameters. Whether such product from the process would work in the future is not really what they care for.

That’s why these automatic trading strategy generators you see out there that can produce all these fancy black boxes and gray boxes of trading strategies that are highly profitable in backtesting do not sell really well. The reason is simple. The trading strategies produced do not work once they go live. The benefit of hindsight makes these strategies curve-fitted with special rules and conditions to deal with things in the past that you are supposed to lose money!

It is perfectly alright to lose money in trading. A trading strategy should lose money in the past when those situations were caused by unforeseen circumstances. And it is the very reason why we need money management rules. It is a simple concept but majority of people who are handed with a lot of historical data often forget this the moment they dived into the world of data mining.

And that’s why I can tell if my trading strategies will continue to work in the future. They are designed to take advantage of specific market conditions that follow the principles I stated in The Art of Chart Reading (AoCR) and Special Theory of Price Discovery (STOPD). As long as the markets continue to follow the same dynamics as described in STOPD, which has been ever since the concept of markets was born, my strategies will continue to work.

The truth is ugly – no one wants to tell others their trading strategies are just doing okay. People all aim for these super mechanical trading strategies that can make a killing in a market with next to none in drawdown and ultra high winning rate. Yet, it is exactly these trading strategies that will crash and burn.

I have been doing this for two decades. My two cents should mean something.

TLC Weekly Update September 20, 2019

image

After blocking out majority of my time from evening onward since last Saturday, I managed to force myself to sit down and completed the Emini S&P trading course I promised for a long time. Majority of the course manual has already gone through the first round of editing by my editor. I will try to wrap up the manual for first release as soon as possible. Since I am offering life time support of the course, everyone who purchase the course will be able to download all future releases from the support area so such issue of the manual going outdated should not be a problem.

I am very delighted that I finally completed this core training material for “the rest of us”. I was never one of those 4% of the population destined for trading. My older brother was and he is still better than I am today in terms of these traders’ traits. But I found a way to compensate my lack of talent with a highly structured approach to trading that helps me forge a successful trading career that I am proud of.

My secret wish is to empower all normal people like me to be able to make money from the financial markets more easily. It is really time to stop preaching the classic way of trading education to the normal people. We are just there to use the market to make money, we do not need to be passionate about the markets or damn curious about the future development of these markets. We just need the right set of tools to strive in the current economic environment where the government no longer care about normal people’s financial well beings.

I read this article on the best books for learning modern statistics and find that these books are much better than the classic university text books. If you are interested in data mining, these books will be very good introduction. The best part is, they are free.

And for those of you who are Malcolm Gladwell fans, here is his talk about his latest book, Talking to Strangers. I have not picked up the book yet but I am sure I will have it on my reading list.

Have a great weekend all!

TLC Weekly Update September 13, 2019

image

Another week just fly by so quickly. I don’t even know it is Friday until being reminder to go for an early meeting today. For some mysterious reasons, everything is happening within this month and the next. Maybe it is time to read my horoscope to see what is in store next.

I watched this video about Arnold Schwarzenegger’s Gym & Fridge. Interesting how a body builder adapt to old age and stay fit. His way of eating an egg is definitely inspiring.

I have my team working on various versions of the trading strategies featured at DaytradingBias.com. I understand that many people choose their platforms other than TradeStation. As oppose to what many people think, it is much more complicated to convert these mechanical trading strategies into other platforms. The main issue is not the programming factor. Instead, it is the configuration of the underlying charts in each platform are drastically different from each other. Many platforms simply do not have the flexibility to chart the data series in customized ways.

Once we have something ready, I will upload the code and also write in details how to setup the charts correctly in these other platforms.

On the site security front, I am happy that the improved measures have protected the site from being brought down by the hackers so far but the slow down of the site is still causing inconvenience to my members. The security services I am using now are helping us to find the best solution going forward to deal with this remaining issue. I will report on the progress in a month.

This week Toronto is getting warmer suddenly as if it is summer. It was as high as 28 degree Celsius. I wonder if the predicted early arrival of extreme coldness by October will really happen?!

Time to go.

Happy Mid-Autumn Festival!

TLC Weekly Update August 23, 2019

image

Hitting writer’s block over the past few days is kind of frustrating. I understand myself well enough to know that I need to work on something unrelated to these projects so that I can regain my concentration. Hence writing a short article on cold shower feels right. Here it is in case you missed that.

I also translated an old NeoTicker function Range2Period into Tradestation. It is a very useful tool for those interested in building trading strategies.

I passed my daily statements for the reference trading account to my team last week but when I check for the updated monthly performance on the site it is not there. It took me some tedious time to capture those statements from the brokerage website so I was not happy to not seeing the update a few days after. It turned out, my team uploaded the picture file but the backend of the site decided not to serve the updated picture …

And it is now fixed. For those interested in seeing the live performance for June and July you can see it finally. I will also try to write about it in next instalment of my trading automation series.

Lately I have been asked many times on how to immigrate to Canada by people from Hong Kong and other Asian countries. I do have connections that can help people out in this area. So if you are thinking about moving to Canada, drop me an email and I will refer you to the right people.

I replaced my broken Toshiba flat screen TV with one having built-in Fire TV. I never thought that it is now so much more convenient to browse the net on TV. Although I mainly use this as my big quote screen, it is nice to be able to watch something else like Prime Video or Netflix when having my lunch at home.

Have a great weekend everyone!

TLC Weekly Update August 16, 2019

image

I have been busy catching up with projects while attending multiple long business meetings over the week. The week is not quite as productive as I hope for. Things should improve though by next week.

Talking about productivity drop, my four year old flat screen TV just died the other day leaving me without my real-time quotes when I am not inside my office. It is expected but four years is kind of short though. In case you do not know about this, modern electronic devices are not built to last …

I am very glad that my special recommendation worked out (so far) for my DaytradingBias premium members. It feels great to help my members making some money in this tough trading environment. The trade is still in progress. We will see how things go in coming few weeks.

I added a new reading list for aspiring traders who want to pursuit trading as a career. This time the list is not compiled by me. Instead, it is a collection of recommended books on trading by the famous traders of our time.

I am working on another webinar right now. If all goes well, I will schedule that either in late August or early September.

Time to go. Have a wonderful weekend everyone!

TLC Weekly Update August 9, 2019

image

All week I was troubled by bad internet connection. Slowed down progress with various projects. Just unbelievable how dependent I am these days on the need to be connected to the net all the time …

My team told me that the Gann Square Excel add-in I have created years ago, is the number one gann tool on the net based on the number of downloads. It is a pleasant surprise for me. Never thought that people like it so much. Just wondering what will happen if I charge a dollar each.

I received quite a number of requests to buy the mechanical trading strategies they see in DaytradingBias instead of subscribing to the premium service which gives full access to all the strategies. I understand what they are thinking of and I can package up the strategies as individual items in the store. The truth of the matter is, the cost of these strategies would add up to way more than the subscription fees. Anyway, I am getting my team to package up some of the items and offer them in the store.

I finally realize that I was sick after I came back to Canada last week. The symptoms were so mild that I thought I was get exhausted from the trip and all. Only until I woke up Thursday in the morning feeling all better that I figure this out.

Someone sent me this Quora answer by James Altucher on Warren Buffett. It is a good read and correct assessment of “The Oracle”. As I told many people asking me about Warren Buffett, he is not a good investor and he is definitely not a good fund manager. Now I can refer everyone to this full length article so that I don’t have to waste time explaining why.

Have a great weekend all!

TLC Weekly Update July 26, 2019

image

I was doing a presentation in Hong Kong on alternative investment vehicles earlier this week. Some questions are quite interesting. But specifically there is this one question many readers will be interested to know the answers,

What are my opinions on the current market environment?

Here is a quick summary:

  • Brexit is good for UK. British Pound will bottom out soon after Brexit.
  • Do not short Euro now. Too crowded. Too late.
  • When every major economy are using ZIRP to stimulate the economy, there will be unintended consequences.
  • Gold is in the beginning stage of a two to multiple years rally.
  • Equities will not be the place to be for good return in coming two to three years but not necessarily a “crash” that many people wanted to see (i.e. Chicken Little syndrome).
  • Real estate will not generate good return because it always normalize to the long term bond yield which may turn negative if the central banks choose to do so.
  • US dollar will be the place to be until it gets too expensive for the 3rd world countries to service their debts.
  • The belief that you need physical gold implies you believe that the system is heading for total collapse. If that is the case, you should not pile up gold bars. You should buy guns instead. (Stolen from Tim Morge)

There is this very odd thing I like to complain about the restaurants in Tsim Sha Tsui, Hong Kong. Many restaurants offering breakfast on their menu but they do not open until much later in the day. And many of them do not indicate what time they open. So I was walking up and down the street not able to find a place for breakfast even though all these places having their signs telling me the nice breakfast they serve … by lunch time.

The week was so packed with all sorts of meetings I could not work on the book list on technical trading skills. I will catch up with that when I return to Toronto in couple of days.

And this year is first time in my life that I have so many people surprised me with birthday cakes and well wishes. I don’t usually celebrate my birthday at all for years. So it is a drastic change indeed. Thank you all of you for remembering my birthday!

For those of you who are curious about my exact date of birth for whatever reason, here is the clue – first moon landing.

Have a nice weekend all!

TLC Weekly Update July 19, 2019

image

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!