FAQ

Do you license or sell your systems?

No I do not. The systems I developed were built around my risk tolerance, trading style and emotional make up. Systems need to match the characteristics of the trader to truly be successful.

Additionally, many systems have limitations to how much size can be traded. For example, one system I have trades ZB. If the bid and ask volume is 200 lots, then once I start trading too much size, say 20-30 lots, I am no longer a small retail trader but now someone who can be front run or manipulated in other ways, introducing slippage while reducing the robustness of the strategy.

If your systems are making money, why do you have a website?

Fair question. Automated trading means I don't spend time managing each trade. I don't have to spend hours waiting for a set up. My ES system for example calculates on every single tick and decides whether a trade should be taken or not.

I don't have to sit in front of a screen and watch every tick. Nor do I sit and watch while in a live trade. It will either work or it will not. Me staring at my screen does nothing to facilitate a win.

So automated trading offers the trader a lot of time to do something else. In my case, I have a desire to teach systematic trading and share my experience and knowledge.

Can anyone develop a trading system?

I believe anything is possible, but for some the answer, unfortunately is probably no.

Developing systems takes a lot of time, a lot of trial and error and a lot of honesty.  To be successful you need to have a deep motivation to see the project through and the ability to accept rejection and keep moving forward.

It is not impossible, far from it, but it is not simple either.

Is systematic trading the holy grail? 

There is no holy grail in trading. And that goes for systematic trading. But with systematic trading you will be closer to your goal than without it.

The reason I say that is because the countless variables that reduce one's chance at success are narrowed down to just one. The math problem. It comes down to solving the math behind the strategy.

There are no guarantees one will accomplish this final piece, but it is a lot easier focusing on one variable than numerous.

Will I be able to create a profitable system?

Possibly yes, possibly no. Just because you develop a trading system does not mean it will be successful. Conversely just because initial results may show the system is not profitable does not mean you should scrap it.

Often, an initially weak system, after focusing on risk management, and other aspects of the algorithm can become profitable.

But realize, it takes a lot of work to achieve success. The majority of my time spent studying is proving what does not work. I may have an idea only to find that testing renders it useless and I am forced to try something else.

Why not just learn system development myself?

You can as I did. But keep in mind you will spend a lot of time learning how to program and then spend money learning mistakes when you go from simulated testing in a paper account to live testing in a funded account. I've learned a lot through self study and live trading. If I can save you that time and money, then I believe I can offer you value.

As an example, prior to writing my first program, I spent two months studying any MultiCharts programming reference guides I could find. That is two months of constant study prior to any programming.

Another example is when my system went live. It executed so fast that lack of redundancy in my code would at times produce trades that never should have happened in the first place.

This experience and knowledge is just part of the value I believe I can offer you.

How long does it take to develop a system and start making money?

I spent two years but also had to learn everything. I knew zero about programming. Though I was an experienced trader I had to learn everything from order flow to programming to finding the ideal broker, technology provider and more.

Realistically, if you use my services to help with the learning curve, you could write your first program within a few weeks. Then you will likely spend a few months defining and tweaking your algorithm.

After that you will spend at least a month in simulated testing and if all works, then a few months trading one lot in the futures market or 100 shares in a stock until you learn more about your system.

These are just estimates but you can get a sense that this is not an overnight activity. Nor should it be. To have a system that is fully automated, trading while you are doing something else is an amazing experience. It should not be easy.

Do I need to be a full-time trader to run a system?

Not at all. In fact for many who have a full-time job a fully automated system can offer the best of both worlds.

I trade full-time but when my systems run I just let them run and do something else, keeping an ear for an audio alert. But otherwise, as Billy Beane did in Money Ball, I just let the team play.

I am not a programmer can I still do this?

You can and I can help you with the learning curve. For more about programming, please read here.

Isn't systematic trading the same thing as high frequency trading?

Not at all and that huge misconception is likely part of the reason why systematic trading remains in its infancy among retail traders.

Let me be clear. Systematic trading is really no different than someone who trades purely discretionary with no automation. It just takes those  rules for what to do and when to do it and asks a computer to implement.

High frequency is as the word implies, high frequency. They are two completely different approaches.