Incidentally, I attended 2 trading courses conducted by professional traders recently. I also re-read Dr Alexandra’s books: “Coming into My Trading Room” and “Trading for a Living”. Allow me to share some points from these sources that talks about what professional traders do.

Fade false breakouts

Dr Elder mentioned in his book that professionals love to fade false breakouts. In fact, he also provided a strategy for fading false breakout. Subtly, Tom Yuen also showed some trading examples fading false breakouts. This was brought to my attention because I asked him why was he not following the trend (though he preached never to go against the trend)

Try more than once to find the right entry

This was also from Dr Elder and Tom. This is really intriguing to me. I am still trying to figure out how to determine the “right” entry.

Keep good records

I believe almost all successful traders advocate this. Dr Elder said he can tell if a trader is good or not by looking at his records. Ray Barros cannot emphasize this more enough. I was overwhelmed by the amount of information that he maintains for his record.

Adds on to winning position

I got this from Tom during his course. But he can’t really answer me on what makes him decide that he is going it. I guess it has to do with experince…

The trend is your friend, until it bends

This is also all trend-following traders’ advocate, be it using indicators or from the price itself.

Do note that when people talk about “professionals”, you may want to find out more. Professional traders can be pit traders, institutional traders, bank traders, full-time retail traders etc

Have you come across things that professional traders do to share?

in post image by sndrspk

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Just a friendly note that I am still actively keeping a lookout for free trading education. I have just updated the “Free Education” page with a free talk by Stuart Mcphee.

If you came across any, don’t hesitate to share it with us! Just drop me a email!

In future, I will be posting when the “Free Education” page is updated, so that my RSS and email subscribers can instantly be informed of new free trading education. So if you wish to be informed, subscribe to my blog via RSS or email today!

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(For Facebook readers, this post is at:  http://optionstrader.joymastery.com/2009/11/05/updated-list-of-trading-courses-in-singapore-oct-09)

Hey Friends!

I have updated the “Trading Courses Comparison Table” with the latest trading courses that I have attended:

• Applied Technical Analysis by Tom Yuen (YCK)
• Habit of Success Webinar by Ray Barros

Also added 2 news courses to the “List of Trading Courses in Singapore”:

• Mastermind Trader by Colin Seow
• The Alchemy Workshop Series by John Lok

Seems like the number of trading courses in Singapore has reached equilibrium

Sign up at the top right hand corner of my blog to get the latest list!

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I don’t think there is a better way to learn about the legendary Turtles then by hearing from the best Turtle.

I chanced upon the audio book and after listening to it, decided to get the book.

It is an easy read (if you less the formulae presented in the book). I’d like the way Curtis highlighted what was really important to the turtles that brought them trading success. In a nutshell, what really brought them success had to do a lot with their mentality - to follow the trading system consistently, to not focus on the immediate trading results but look at the long haul etc. Curtis also highlighted the importance of the money management rules - position sizing based on the violatility of the instrument, position size limitation based on market correlation etc. The above 2 aspects were more impactful to the Turtles’ trading success than the trading system itself. That’s why the rules of the trading system are revealed in entirety in the book.

“…The funny thing is that most of the principles that Richard Dennis taught us were not new. Some were basic principles that had been espoused by other famous traders since before Richard was born. Yet the very simplicity of the principles we were taught in some respects was a hindrance for those of us who tried to follow them in those initial months. People have a tendency to believe that complicated ideas are better than simple ones. Many find it hard to comprehend that Richard Dennis could have made several hundred million dollars by using a handful of simple rules…”

However, Curtis did highlight that the Turtles started off not having to worry about the trading system mainly because it came from the legendary futures traders . The Turtles trusted that their mentors had done the necessary system testing and had passed them a profitable trading system. So the Turtles just had to focus on their psychology and follow the money management rules strictly, which could explain why they became so successful in such a short time.

“…If I had to pick the single X factor most responsible for our success
as Turtles, it would be the fact that we were taught by a legendary
trader. This knowledge gave us a faith in the methods that
Richard taught us, making it much easier for us to follow his rules
consistently and persistently…”

Because of Curtis’ background in trading system testing, he also shared metrics for measuring the performance of a trading system (even how to identify if a trading system has an edge), how to do proper backtesting and pointers on how to make a trading system robust. Along with the interesting Turtle trading stories, I definitely find this book a good read!

inpost image by turtlemom4beacon

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Allow me to share a dilemma that I am facing recently. It has to do with backtesting.

I am backtesting a trading system with daily charts - manually.  I have to do it for over 5 instruments. I confirm that it is tough to do manual backtesting Tough not in the menial way but mentally. As I am working my way through the charts, I keep thinking of the following:

I can only carry out limited testing

I am only backtesting the trading system itself - the entry signal, the entry, stop loss and profit target. What I did not include is money management and my psychology.

Well, it is still possible to simulate money management. Just that it will take even longer for the backtesting. As I am trading more than 1 instrument, my money management has to take into account for which instrument the entry signal appear first. You can imagine I switching between 5 charts and determining if the entry signal has appeared. Hence the longer time for backtesting.

It is not possible to stimulate the psychology part though. For example, I may choose to skip a trade because I have quarreled with my wife… for instance only

What can I tell from the backtest results then?

Since I am not able to simulate money management and psychology, what can I get out of my backtesting? We all know that most trading systems have success rate of around 50%. Am I to just prove that my trading system is near average?

How much history data to use for backtesting?

Ray Barros suggests that he would backtest 5 years worth of downtrend data, uptrend data and range data. I found that amazing. Firstly, I have to determine uptrend, downtrend and range data accurately. Then it is the painful process of working through the data! Tough job!

Which instrument to backtest?

Do I want to trade with instruments that are uncorrelated? How can I be sure that the instruments that I have chosen are uncorrelated.

Will backtesting using different charts reap the same results?

For instance, the daily candle on InterbankFX chart closes at 8 am SGT while the daily candle on Oanda closes at 10 am SGT (if I remember correctly, anyway, they definitely close at different times). Will I get the same backtesting results with the 2 different charts?

Then again, would I want to do my homework now or do I prefer to pay the market to learn? Meanwhile, the backtesting continues…

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