What should you do when you think it is time to change your trading system? Is it ever more profitable to change (or bend) the rules? Walter and Darren dig into strategies you can use for maintaining consistency with your trading system.

http://media.blubrry.com/2traders/content.blubrry.com/2traders/2_Traders_-_EP06_Bending_Your_Trading_System_Rules.mp3

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In this episode:

02:10 – what’s really going to happen with your system

02:39 – your most important trading system questions

03:51 – the view from Mt. Everest

05:03 – why some traders don’t “pull the trigger”

05:30 – a trick for vetting your trading system

07:33 – trading is so “easy” (or is it?)

09:37 – the surprising way to avoid “knee jerk” mistakes

10:45 – the weird trick that winning traders use

12:00 – how to think about “trading work”

12:31 – getting paid per decision

13:09 – the recency bias in trading

14:51 – intelligence won’t make you money

15:36 – what traders flock to, and why

17:30 – how to reduce poor trading decisions

Tweetables:

Lazy traders lose pips. [Click To Tweet].

Traders get paid for making decisions. [Click To Tweet].

Your pen is a trader’s friend. [Click To Tweet].

Download The Full Episode 6 Transcript Here

Walter: One of the big mistakes that we make as traders is that we highlight what happened last time, so the last trade, or the last couple of trades, if there’s some sort of theme going on that …

Two traders: Darren and Walter, pull back the curtain on profitable trading systems, consistent

money management, and profitable psychological triggers. Welcome to the Two Traders

podcast.

Walter: Hey there, it’s Walter Peters, and you’re here at the Two Traders Podcast. I’ve got Darren with me on the line. Hi Darren.

Darren: Hello, Walter.

Walter: We’re going to be talking about this idea of bending the rules. Why is it that some traders, or many traders, in fact I’ve been one of them, want to bend the rules instead of just sticking with their trading system? You’ve got a trading system, you’re pretty convinced that it’s going to make money for you, so why don’t we just execute it, Darren? What is it about traders where we want to bend the rules or change the system, and not really stick to what we believe is going to do well for us?

Darren: Simply, I think, Walter, we’re not built for trading, firstly. We’re not built to deal with uncertainty. We want to remove uncertainty in everything we do. We want guarantees. You have to do certain things to be able to counteract that, and the one I know the most with traders is … someone spoke to me the other day, and they said … I’d explained a training system to the...

What do trading algorithms do for the markets? Walter and Darren discuss various opinions and how it affects your trades. Download (Duration: 15:53 / 14.5 MB) In this episode: 01:38 – the hedge fund everyone loved 02:07 – the insane “mother of all losses” 03:26 – the dinosaur asteroid & the markets 04:12 – how calculating...

What do trading algorithms do for the markets? Walter and Darren discuss various opinions and how it affects your trades.

http://media.blubrry.com/2traders/content.blubrry.com/2traders/2_Traders_-_EP05_The_Boogey_Algos.mp3

Download (Duration: 15:53 / 14.5 MB)

In this episode:

01:38 – the hedge fund everyone loved

02:07 – the insane “mother of all losses”

03:26 – the dinosaur asteroid & the markets

04:12 – how calculating risk is comforting

06:29 – technology = the easy way out?

08:30 – the good things about algorithms

09:08 – scalpers & trading algos

10:25 – tried and tested approach

11:08 – the markets before & after algos

13:08 – reports on the effect of algos on the markets

13:37 – Doctors warn of the danger of trains

14:25 – should we worry?

Tweetables:

What makes the market move are human decisions. [click to tweet]

You cannot remove uncertainty in the market by trying to quantify it. [click to tweet]

Download The Full Episode 5 Transcript Here

Walter: I don’t know, I mean there’s a lot of good things about the liquidity, the fact that, you know, you’re able to get in on tighter spreads because there’s so many more trades. I saw a stat the other day that in one year, the amount of trades in the stock market, I think it was-

INTRODUCTION:     Two traders, Darren and Walter, pull back the curtain on profitable trading systems, consistent money management, and profitable psychological triggers. Welcome to the two traders podcast.

Walter: Welcome back, it’s Walter and I’m here with Darren, and Darren today we’re going to talk about the trading algorithms. These trading algorithms usually make the news every time there’s a big move in the markets, and we’re just wondering Darren if we can get your opinion on what do trading algorithms do for the markets, have they changed the markets, do they make it more difficult on the little guy, what’s going on? and what are your opinions about these algorithms?

Darren: Yeah, I mean I’m not really an expert on algo-trading, Walter. But it’s like a few little stories that I sort of latched onto that make sense to me and the way that I trade. For me the big one is the Black-Scholes model. Which was Myron Scholes who won a Nobel Prize for his kind of work that a way you could eliminate risk in the markets by some sort of dynamic hedging. And basically it was like some intense mathematics, like some really clever stuff. And, then he went on to start this hedge fund and obviously everybody wanted to invest in it, and make a use of this model. And of course they made loads of money, absolutely loads of money, everything’s brilliant, and there’s no risk at all.

And then there was like an unexpected event, and they lost a load of money. But you know they redid their calculations and it’s okay let’s keep going, and it’ll all come out in the wash and it’ll be fine. And then there was like another unexpected event. And then, within I think it was like four months, the lost like fifty billion, or something insane. And they nearly brought the whole bloody financial system in the world crashing down. And,

How do you decide where to put your stop loss? Walter and Darren discuss following the “rule book” vs developing a system based on YOU. Download (Duration: 24:30 / 22.4MB) In this episode: 01:04 – stop loss based on the market 02:30 – the elastic band of profit and loss 04:28 – should it be based...

In this episode, Walter and Darren talk about how people create emotions in life by creating situations that lead to emotional experiences. The Trading Tribe, created by Ed Seykota, allows traders purge emotions so that they do not obstruct you from achieving your trading goals. How does this process work? Is it something you should...

Learning to characterize your emotions and how it affects your most important trading decisions. Download (Duration: 28:19 / 27.8MB) In this episode: 02:02 – those who are more articulate of their feelings 03:30 – closely examine how you react 04:49 – have a plan for dealing with emotions 07:45 – learning to be more self-aware...