#039: 4 WAYS HOW YOU CAN QUICKLY IMPROVE YOUR TRADING RESULTS
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DISCLAIMER:  Futures trading systems and commodity trading bear a high degree of risk. People can and do lose money.
Hypothetical results have many inherent limitations. Past performance does not guarantee future results. 

 

ACTUAL RESULTS SHOULD BE VIEWED WITH CAUTION, BECAUSE PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

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#039: 4 WAYS HOW YOU CAN QUICKLY IMPROVE YOUR TRADING RESULTS

In today’s article, I would like to summarize several important points that helped me quickly to become a better trader in the area of automated trading. Some of the points might be a little bit surprising, but I believe that there will be interesting topics you can think about.

 

1. COOPERATION

 

There isn’t any other thing that would help me to improve my own trading so dramatically as cooperation with other traders. In the past, I used to be an unapproachable trader, proud of my self-sufficiency. On the other side, I got the opportunity to work with other, really skilled people, and I consider this to be the best what could happen to me and to my colleagues.

 

Team spirit and cooperation with people, that are on the same wavelength, where every team member has his unique skills, extraordinary experience, and know-how, this all can perform miracles. This experience has also taught me to be much more open in other projects. The trust is, of course, crucial, and in my case, it takes always a long time before my co-workers deserve my full trust. What I have always cared about, was their broad- and open-mindedness, because these are, according to my experience, the most important values that my co-workers need to have (and their high level of skills, of course).

 

When looking for co-workers, I recommend not to hurry and slowly test their limits, especially when it comes to their skills and expertise. It is also important to work with people, that understand trading and have real experience in trading, as well as experience in live trading – without this experience there wouldn’t be enough of pragmatism, caution, and care (as beginning traders without any real experience are rather naive).

 

2. PAPER, PEN AND CHART SCREENSHOTS 

 

I probably couldn’t count a number of trading hours that I spent just with paper, pen and chart screenshots.

 

I have found out that this old-fashioned technique is really powerful. You are not disrupted by other tasks, you don’t over-complicate things and you can focus on what is really important.

 

Mostly, I print out the chart containing several indicators, trades or breakout levels and I just think about them – if I get any idea for a rule, system, or how to make the trades better. I just let my creative part of my brain flow and I make notes.

 

I spend all day making notes (you can get really a lot of ideas within a day), then I move to the computer and start to work and test those ideas.

 

Trading is, to a certain level, a creative process and pen and a paper have really improved my trading more that I can even admit to myself :-)

 

3. MARKET SYSTEM ANALYZER

 

Successful automated trading is about a portfolio. It is about the ability to see the bigger picture.

 

I have learned this in the moment when I started to put my strategies together and test the output of the combinations, using Monte Carlo Analysis.

 

The portfolio is the key. Some of the strategies will fail in the future – that is a reality that even the best traders in the world have to face. Thanks to my international project I am in personal contact with several of them and I can say that all of them have in their portfolio constantly about 20% of the strategies failing. It is the part of trading. On the other side, high-quality, diversified portfolio and sufficient capitalization that is based on the Monte Carlo Analysis, make this unpleasant reality quite bearable. In a good, diversified, portfolio, the failing strategies never make too much harm and they only represent a small, acceptable, risk. Using Market System Analyzer I have learned really a lot, especially to be able to see the bigger picture and understand the wider consequences. Think big, not small.

 

4. LOSING TRADES 

 

I know that none of us likes losing trades and drawdowns – and who should.

 

On the other side, even these unpleasant moments have their positive impact. When you experience drawdowns, you can be depressed, or you can take it as a great moment and an opportunity to get better, to improve your strategies and all your trading.

 

Personally, every time when all goes well and my equity grows, I have tendencies to get lazy and practically forget about trading. But trading is a highly-competitive business and it is always good to spend a couple hours with trading every day – even in the good times. For me, the losing period is always an impulse when it is time for improvement. This is why I see in losing periods lot of positive, lot of opportunities.

 

Mostly, during the losing period, I go through the most recent losing trades that caused the drawdown and I start questioning myself – why did that happen? I start to compare the trades, check volume, volatility, thinking what has changed. Sometimes, I just observe and wait what pops up in my mind. Sometimes, I just let the things absorb (to get some space for an idea). Either way, sooner or later comes some idea – and that moves me forward. As you can see, even losing trades can be beneficial, if we are willing to learn something new.

 

And that really is all for today.

 

Happy Trading!

 

Tomas

 

 

 

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