Better System Trader

The discovery of DNA as well as the understanding of its function and structure may be one of the most important discoveries of the last century.

As researchers continue to unlock its secrets, the applications to the scientific, medical, agricultural and forensics fields has been enormous.

From enabling the breeding of animals and crops that are better resistant to disease, to being able to accurately identify criminals and victims, and even to detect diseases early on and create breakthrough treatments for diseases that were previously considered lethal, DNA research is having a huge effect on mankind.

But just as scientists are getting a better understanding of DNA and it's potential applications, can traders apply the same to the markets?

One of the topics we discuss in this podcast episode is the 'DNA approach' to trading. What is it, how can we understand it and what are the benefits?

To discuss this topic plus a number of others, we're joined by Bruce Vanstone from Vanstone Trading.

Bruce is a trader, consultant and university lecturer in Computational Finance and Big Data. He's published a number of research papers and trading systems, and presented material at a number of non-academic conferences. He also consults to a boutique funds management business, trading personally and at a larger fund management level.

In our chat with Bruce you'll discover:

• The 'DNA approach' to trading and why you need to understand it,
• How to add another layer of logic over a strategy to identify the best trading conditions,
• Why it's important to have trading strategies with academic credibility,
• How a simple change in timeframe can increase returns and reduce drawdowns,
• The common 'trap' strategy creators fall into when adjusting strategies without even realising it,
• Plus much more.

Let's head on over to my chat with Bruce.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

The idea for this podcast episode has its roots in a trip I made to the States last year.

I was at a conference and one of the speakers was 1993 Karate World Champion Ricardo Teixeira.

Ricardo was explaining how he came about becoming World Karate Champion and he shared his #1 secret to achieving this success, any ideas what it was?

It was something that sounds incredibly boring, but it produces big results, and that is:

Mastering the fundamentals.

Ricardo explained that leading up to the World Championships, he spent months and months just practising the core fundamental moves. He wasn't practising all those complicated, fancy looking moves you see in the Hollywood films.

No.

He spent weeks just practising a punch...

Until he became so great at it that nobody else could beat him.

I think this "mastering the fundamentals" approach has strong applications to trading too.

Many traders, especially when starting out, think that the latest software or fanciest indicator is going to guarantee their success, but over time I think we realise that there are some core fundamentals to trading which really bring the results, and perhaps from time to time we even forget them too, so today we're going to discuss some fundamentals with our guest Martin Lembak.

Martin is in a very interesting position because he has access to hundreds of different trading strategies, being traded live in the markets, so he's in a very exclusive position to see what works and what doesn't.

In our chat today you'll here:

• Why it's important to understand the characteristics of a market before trying to create or match strategies to that market,
• How to choose the types of strategies that suit the personality of the market and the types of trading styles that are the most popular (and profitable) in the markets right now,
• Commonalities between developers of successful trading strategies and what traders can do to accelerate their progress,
• The fundamentals of portfolio construction, including some challenges and false assumptions of creating portfolios,
• Broker selection and some warning signs when assessing whether a broker is safe to use,
• Plus much more.

So, let's get started, over to my chat with Martin.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

We have a really interesting one here for you today, one that may challenge your existing thoughts on trading models.

I know this episode has certainly made me think about it from a different angle, so I hope you enjoy this.

Our guest for this episode is Kevin Saunders from Tribelet Capital.

Kevin is a specialist in electronic trading across many international exchanges, co-founding Non Correlated Capital in 2009, which later became a licensed CTA with more than USD 40 million under management.

He has won a bunch of awards for his trading and academic achievements, and he also developed a program here in Australia called the "Joey Experiment" which we're going to talk a little bit about as well.

In our chat today you'll discover:

• Why traders must disentangle themselves from the requirement that a model must work and produce money – and the alternative approach that uses charts more predictable than the underlying market,
• Why building a mathematical model is like creating a unicorn that doesn't represent reality,
• Why traders need to stop thinking about building a model as a 'solution' and how to think about it instead,
• Plus much more.

Sounds interesting? Well let's get started, and jump over now to my chat with Kevin.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

In this podcast episode we're going to be talking about something that can have a huge impact on the markets and on trading strategies. It's something that can happen very quickly and cause a lot of damage, and that is spikes in volatility.

And our special guest to discuss volatility spikes today is Andrew Thrasher, who published a research paper called 'Forecasting a Volatility Tsunami', which won the Charles Dow award in 2017.

Whenever the VIX is at low levels we here all about in the mainstream media, with the implication that it's about to rise, however a low level in the VIX alone doesn't necessarily mean volatility is going to increase, and in our chat today Andrew is going to explain why and he's also going to share his research and the 3 key factors that can actually improve predictions of volatility spikes.

In our chat today you'll here:

• How volatility is usually interpreted and why this common approach is unreliable and missing a key part of the picture,
• Why a low VIX reading alone is not a good predictor that volatility will rise,
• 3 key factors that can improve predictions of volatility spikes,
• Plus much more.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

Welcome to the first podcast episode for 2018, happy new year!

I hope that you had a great Christmas or holiday season and all the best for 2018.

In this podcast episode we're talking about the impacts that large institutions can have on the markets, especially on stocks, and how certain institutional behaviours can indicate potentially big moves in prices.

Our special guest is Jason Bodner from Macro Analytics for Professionals (MAP).

His previous experience working some big institutional orders has given him some valuable insights that I'm sure we can all find useful, so in our discussion today you'll hear:

• How institutional activity can indicate potentially big moves and the signals to look out for,
• How the techniques of scouting out players on a sports team can apply to stock selection too,
• 3 basic factors that can quickly identify when institutions are working a big trade, plus loads of other signals to watch for as well,
• How mixing technical with fundamental factors can give you a more complete picture than just technical or fundamentals alone,
• Plus much more.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

Well here we are, another year gone (and so fast too!).

I'm glad you could join me for this final episode for 2017, where we'll be reviewing all of the special guests we had on the show this year, the topics and insights they've shared plus their top trading lessons.

I think this is a great way to look back, to be reminded of some of the key points, and all of the amazing knowledge our guests have shared with us this year.

Also, thanks for all of the emails of support and appreciation throughout the year, I'm glad that what we're doing here has been so helpful! I hope you have a great Christmas and holiday season and all the best for 2018... It's going to be a massive year!

Happy trading,

Andrew

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

Our guest for this podcast episode, Dimitri Speck, first became interested in the markets as a child when he found gold while diving at the beach.

And even though trading isn't usually as easy as just picking up gold off the ground, Dimitri has spent years diving deep into the markets and uncovering hidden and consistent anomalies that traders and investors of all styles can profit from.

In this episode he's going to share some of these powerful insights with us, including:

• How understanding Intraday behaviours can help you to get better prices and additional edge on trade execution,
• The 4 specific hours of the day that would have given you most of the last 10 years of S&P returns (hint: it's probably not what you think),
• The 1 market event that has produced almost the entire S&P performance over the past 20 years in just 6% of the days,
• The challenges of accurately measuring these anomalies which could give you misleading results,
• The 3 simple techniques traders of all styles can use to apply these behaviours to their own trading,
• Plus much more.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

A few weeks ago we organised a family holiday for December.

We booked a luxury villa in Port Douglas and we're all really excited to get there and start enjoying the holiday.

Last year the Huffington Post published an article about vacations, and shared a study in a journal claiming that just planning or anticipating your trip can make you happier than actually taking it.

I'm not sure if anticipating a holiday is more fun than actually taking it (I guess that depends on whether you have to take your kids or not...), but there is definitely value in anticipation, which ties in quite nicely with this podcast episode.

Our guest today is John Carter, and John is going to share with us the value of anticipation in trading, and how anticipating market action and the "pain points" of other market participants can give us an edge in trading.

Some of the topics you'll hear are:

• How anticipating the actions and pain points of other market participants can give you an edge,
• A simple but powerful mental switch that can crush the fear of executing trades,
• The subtle clues the TICK and volume data give to indicate if a trend or range bound day could be more likely,
• How to identify potential false breakouts and how 'stop runs' can actually improve your trading results.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

I can't believe it's only 4 weeks until Christmas!

We've got the Christmas ads running on the TV here already...

The local grocery store has the Christmas decorations up...

And they're even playing Christmas carols - can you believe that?

At home my 5-year-old daughter is already priming me for what she wants from Santa this year, which by the way is pretty much everything on TV right now!

2017 has gone by really fast and we're coming into a time of reflection and rest, time to take a break if you can, and so I wanted to take a few minutes in this weeks Trading Thought to talk about balance, both in trading and in life.

Pretty early on in my trading journey I was absolutely consumed by trading.

I lived and breathed it, it was all I could think about and all I wanted to do was quit my corporate job and trade for a living.

By day I was working a full-time job in a bank, and at night I was staying up late to day trade the ES. I joined a trading room and my wicked plan was to get a few hours sleep after my day job so I could then trade the US session during the night, and then when the US markets closed I would have a brief rest before I went off to work for the day.

Sounds crazy right?

Well at the time I thought it was a great plan, but I'm sure we can all see how poor it really was.

You can probably guess what happened too.

It wasn't sustainable.

I was only able to do it for a short period of time before lack of sleep impacted not only my trading, which sucked by the way, but it also started impacting my day job and it also pissed off my girlfriend at the time because...

I wanted to watch 1 minute bars more than watch a movie with her!

So, at that time there was no balance in my life, and my trading, health, relationships and life really suffered.

In this weeks Trading Thought, I want to share some thoughts from Linda Raschke on how Balance can make us better traders.

Then after that I have a small announcement to share, so take a listen to some nuggets of wisdom from Linda first.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.

The Petronas towers in Malaysia are the tallest twin towers in the world at 452m (1483 ft) tall.

Because of the ground underneath the building site, they had to put in some deep foundations, up to 114m (374 ft) deep.

Without these deep foundations, the building would run into problems.

In fact, during construction, at around the 72nd floor, they discovered that tower 2 was leaning 25 mm (0.98in) from vertical, so to correct that lean the next 16 floors were slanted back the other way.

They even hired specialist surveyors to check the lean of the tower twice a day until the building was completed.

Now obviously the foundations anchor the building and keep it from falling over, and even though they're not visible, they're probably the most important part of the construction.

When you look at constructing a portfolio of strategies, there are a couple of key concepts, or foundations to consider as well, so that you have a solid portfolio, one that will hopefully weather all types of hostile conditions and produce higher returns with reduced drawdowns.

In this weeks Trading Thought we're going to hear from 2 guests, who will explain how they construct portfolios and some mistakes that traders sometimes make during portfolio construction, which you need to be aware of.

Take a listen as we start with Gary Hart from Trendfinder Trading Systems explaining the benefits of a portfolio of strategies and we take it from there.

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.