http://chatwithtraders.com/ep-072-rob-discovery-trading-group/ Just finished that podcast and really got me thinking about how I'm really trading. Background is that I trade off a daily time frame. I work full time so it fits my schedule and to be honest day trading just isn't something that fits my personality. All my live trading right now is based off Adam Grimes book and course. I've developed my own approaches to it and manually back tested hours of this and a bit of quantitative work on some points of it and built my own approach to it. They consist of pullbacks/consolidations and another setup he calls the failure test which is based off Wyckoff's "Up Thrust" and "Springs", I do think he refers to them as, and are price rejections at support/resistance levels. I do have two purely systematic(manual entry) systems I've got in incubation currently paper trading and to be honest I'm still learning the ways of validating a system and hoping in a months time to try putting some small size on with one of them. It's been awhile since school and I was always great with math but if you don't use it, you kind of lose it. Feel like I'm lacking how to apply math to my trading. I always read up a bit on quantocracy.com once or twice a week to see what pops up and would have to say I have a hard time understanding over half the articles and would say I'm jealous of the talent of some of these guys and the concepts they come up with. I'm looking for material to get the brain working again and concepts for position sizing/# of positions. Perhaps ways to work with MAE/MFE stats to come up with optimal profit targets and stop placements. (Maybe these are dumb ideas to even show as examples) Books I thought about getting is some of the ones from Ralph Vince which I've heard a few times are pretty math heavy but then I heard on a podcast with Larry Williams that he said Ralph Vince taught himself all the math so sure I could take the time and effort to read it and teach myself. That podcast got me quite interested in the idea of developing risk models that are a bit more advanced/adaptive and its not the first time I've heard someone more or less mention that they don't find entries all that important but risk/trade management providing the edge to their trading. I myself have found out after months of trading that trade management wasn't that easy and the hard right edge is way different when checking mid day on my account compared to when I paper traded nightly/manual back tested my discretionary trading. My trading plan and rules have grown quite a bit since when I started and now. Maybe its all hogwash, maybe I'm ranting and I'm not a great writer so my ideas probably sound dumb. Perhaps someone understands where I'm coming from and could point me at some ideas for some literature and educational material to get me working with statistics and probabilities more. Feels like its an area where retail traders don't touch as it is hard work and its not as flashy as a book on trade setups or method or some sort of trade signal/chatroom.
I wouldn't recommend this normally as I don't want to come across as a pushy salesperson, but there it sounds like the "semi automated trader" part of my own book might be exactly what you're looking for. systematictrading.org If you go to the publishers page (linked from "buy it now"), I think they are still offering a 1 month free trial on their entire catalogue so you can see if it is what you need, as to be fair it's not a cheap book. GAT
Thanks for the post. Looks like something I'm looking for. Had actually stumbled onto your journal the other day and through the forums recent posts and flipped back a few pages and was actually going to sit down sometime and start from the beginning when I had time as it seemed very interesting. But it's quite long now. Also seen a recent blog of yours pop up in quantocracy and was meaning to give that a read up. I'll add it to the cart soon. Do you have a place where readers might ask questions about content in the book?
On my ET journal or comment somewhere on my blog (don't worry if you haven't got the "right" page), eithier is fine. GAT
It takes time for enterprises / companies earnings to be aggregated/assimilated into price and hence a capital appreciation trend. Over the short run, the market is in a process of assimilating all earnings plus exogenous information, hence the randomness of price information / behavior. A well run enterprise's earnings will grow, for the most part, in fits and starts yet with an upward bias and the market's perception of these expected earnings upward bias is more quantifiably reflected in longer term trends. The comprehension of the delineation between the aspects of the randomness / chaos of the short term ( and the feelings of instant gratification that can be perceived and produced therein ), and the ( expected ) upward bias of the long term earnings growth ( and hence the patience of waiting for the earnings to be reflected in price and further, dividend growth ) is important. This gulf of "time" can be thought of as "depth of field". There are "infrequent" times when well run companies become mispriced vs. their earnings through forced selling. Then "value" can be exploited. A proven way * in exploiting "value" mispricing (and the highest quintile production of alpha) is to invest in the small cap value universe via funds. This way one is taking advantage of the growth via the "size" of the companies and the "value" (mispricing vs. the earnings / fundamentals). Other asset classes such as currencies, commodities, debt instruments, and even real estate don't produce products and services ( "grow" earnings ), so investment in them is predicated on supply and demand, which can be difficult to derive and quantify "undervaluation" entry points. Many "educational" courses and materials attempt to define these entry points within the short term randomness through "price based" methods ( indicators, chart patterns, etc. ), yet the basic underlying fundamental concepts / aspects ( earnings assimilated into price over long term, companies produce earnings via products and services, proven small cap value effect ) can't be ignored. * https://docs.google.com/document/d/1kToqLWLISRk4n4YnSzv1hT5kBN54l5CvhwGgDwJKPJI/edit?usp=sharing - Don't quit your day job - don't use leverage - money is most efficiently compounded over longer term time frames - money is made by sitting on one's hands - many times money is made by sitting in cash - don't be hostage to the markets - open a Roth IRA