Brief update on my week’s trading work – strategy development workings, meetings with fellow traders, a couple of buys and sells in Crude Oil, and a bunch of recommended links.
A short 4-day week for me this week, following a long-weekend in Le Mans, France, to participate in the annual 24-hour inline skating relay. I was glad to discover that my lap times are still semi-respectable (somebody managed to grab a good photo whilst I was ‘speeding’ past!)
My first mentor Paul Wallace always stressed the importance of balancing out trading activities with other exciting passions in one’s life. Great advice that is/was!
- Rolled out testing models to three additional six-month periods over recent years (still all on Crude Oil futures), increasing sample size to a little over 500 trades – mixed results in various periods
- Completed some reviews, reconciliations and analysis & plotted trades in MT4 using a programming script from a fellow retail trader buddy
- Checked for “Look Ahead Bias” & other errors
- Meeting with systematic trader (see below) helped me to plan the next steps in my testing
Meetings and Conversations
- Two meetings with the hedge fund’s discretionary trader – our conversations revolved around his plan to become significantly more systematic in his trading. Key motivating factors are the potential to cover more markets, to allow for significantly more back-testing and increasing its accuracy, and to reduce the trader’s energy required for doing the ‘actual trading’ (this reconciles nicely with the Steenbarger article mentioned below)
- He also questioned some of my testing work, resulting in constructive insights – very helpful.
- An insightful meeting with one of the fund’s systematic traders – discussed back-testing methodologies, how to interpret and act on testing results, Sharpe ratios and drawdowns, transaction costs, annual return expectations and the use of coding & programming in testing.
- A working meeting with one of my retail trader buddies at his home – looking in detail over some of his testing results for a trading strategy – and providing a listening ear to some of the challenges he is facing in incorporating his trading aspirations in the context of the rest of his every-day life. I am sure he values having somebody to talk this over with – additionally I am finding this type of conversation helpful too, in that it provides an alternate perspective on my own trading situation.
Live Trading Room for Oil Futures
- Less of my time/attention went to the room this week – I have developed some concerns for how the room is currently running, and also considering the opportunity cost of spending time in the room, as opposed to spending that time on my own strategy development. Am likely to put the membership on hold for now – may consider returning to it later.
- Executed only two trades on my account this week – both were small winners.
Good links, articles, reading
- Articles on developing processes & routines for the trading day – the first by Lance Beggs YourTradingCoach – Creating the conditions for success, and the second by Rolf from Tradeciety entitled ‘The Perfect Trading Routine’
- Evidence-based trading: Another interesting article by Brett Steenbarger entitled ‘What is making money in the financial markets now’
- Financial Math Blog – this is a blog I came across this week, with regular articles on a range of financial market topics – here are two specific articles Are hedge funds losing their edge? and Are Hedge Funds Beating the Market?
- (Remember both Lance Beggs and Brett Steenbarger are on my short list of 6 suggested sites for getting started in/developing your trading
Final Thought – Inspiration
To my surprise, somebody on Twitter this week listed me as one of the traders that inspires him – this did come somewhat out of the blue! In response to how I was inspiring him, he gave the following answer:
Well, glad to be inspiring somebody – thanks for the compliment!