It’s often the 800 lb. gorilla in the room.
The topic we traders mention constantly but more times than not we would rather discuss our dental visit than divulge our risk management plans.
Most traders appreciate the importance of risk management however where educators often fall short is in the scoping of risk management. Bottom line; most traders focus on just stop management and protecting trade loss.
One approach that I find gains more traction is to have the trader take an ‘enterprise’ risk management path to understanding risk and its application to trading.
The concept of ERM takes more of a holistic improvement approach to the topic and in essence widens the sandbox to what traders need to consider under the risk management umbrella. Core ERM plans should address both profitability as well as loss management.
The best way I have found for traders to grasp ERM and to buy into the value it offers is with this simple statement:
You will have...
Continuing this month's theme of "Trading Systems", in this week’s video lesson, you’ll get a ‘checklist’ of sorts of the considerations you should keep in mind during trading strategy and system selection - to filter through the hundreds of choices you have available to you, and help you find a good fit.
These are the areas which can affect both your direct results and your subconscious’s decision to support or sabotage your efforts.
In conclusion, the process of choosing a trading strategy and system selection can be summarized as follows.
Continuing this month's theme of "Trading Systems", in this week’s lesson we discuss why your trading system doesn't exist in a vacuum and examine the “psychology of trading systems”, and how this relates to, but is quite different from the standard ‘trading psychology’.
Spend some time now and simply reflect on your experiences so far with trading, and note specific instances when you’ve felt a great deal of discomfort.
Briefly note what happened, what led to it and what particular feeling you experienced at the time.
Once you’ve exhausted say 10 or more instances, see if you can identify the possible reason why your subconscious would be creating resistance to success for you in these situations, based on what we discussed in the lesson.
These are areas in your trading and trading system that are not at the level they need to be for you to act with full trust and certainty. What steps can you take to shore up these...
In this week's lesson certified risk manager and frequent contributor, Michael Toma shares the discrepancies between real trading and backtested results.
There were times where I spent more effort backtesting than I would sleep. As traders, we’ve all done it. Waking up at 4 am with a strategy you heard about and simply can’t get it out of your head.
The mission; backtest, backtest and more backtest. Some of the popular trading platforms now have pretty cool backtesting tools but for me, if the strategy didn’t seem too complicated, I would dive in with pen and pad and backtest it old school. I can’t tell you how many times I witnessed a successful backtest only to quickly fail in a live environment.
How can that be? We’re talking the holy grail of setups only to make its way to the trash bin along with the backtesting scribble.
So how do risk managers play a role in the system building process?
Since the process can ultimately be the supporting...
Once again it was great to see everyone who came out to this month's meetup where we talked about "Trading Essentials".
Now it's time to shift gears and move on to a new theme for this upcoming month's Meetup.
This month's theme will be "Trading Systems".
For the next several weeks until May's Meetup, we will be discussing everything around "Trading Systems" including how to craft your own playbook, backtesting, setups, and more.
To kick off this month's theme, in this week’s lesson as we alluded we’re going to cover the important task of developing your own "Trading Playbook".
In this video, we will discuss one of the most important ongoing tasks in a successful trading business and that is the ongoing research, development, and execution of your Trading Playbook.
Tune into the video and learn about these 6 key must-do action items:
With only a couple of days remaining before this month's Meetup we will keep this week’s lesson brief.
Now most of us have heard about the importance of a trading plan, and in this month’s Meetup trader Jeff Murphy will talk about how a trading plan can improve your trading as well as the key elements necessary to craft a successful trading plan.
Now let ask you a question, how many of you have heard about or have fleshed out a trading business plan?
Simply put, how are you accounting for the revenues and expenses of your trading business?
You see this is but one simple aspect that many traders neglect.
That is they fail to run their trading operation as a business.
If you were to look at investing any traditional brick and mortar business they would be quick to provide a bevy of financial documents.
Most traders, on the other hand, are remiss to even have something as simple as a business...
This month’s trading theme is "Trading Essentials" and this week’s lesson comes from co-organizer Etienne Crete, who will be presenting at this month's meetup.
We all come into trading with a certain outcome we want to achieve. That's a vision.
When I think of trading essentials, the first thing that comes to my mind are activities to support trading.
These have been essential for me to grow and are needed to get you to where you want to be (i.e. your vision).
That being said, at the next Meetup I'll be discussing in-depth activities that I and a great number of traders do before and after trading.
To give you a snapshot, I'm talking about implementing:
... so you can consistently move toward your vision and reach the goals you set up along the way.
Your assignment for the week is to ...
I wanted to share this podcast I recently did with fellow Montrealer, Luc Begnoche, who is the cofounder and CEO of startup AIDvisors.
In this episode we talk about Artificial Intelligence and trading.
Nowadays we read a lot of headlines around the exponential developments in AI and how many companies are rushing to bring AI related technologies to market. The promise is that AI can and will change the way we do everything - that is the way retailers sell, the way we make purchases, drive cars, practice medicine, grow crops, and so on but what will AI do to trading?
To help us explore this topic I invited cofounder and CEO of startup AIDvisors Luc Begnoche to share his perspectives around the history of AI, the different applications of AI, the application to trading, and how Luc’s company is bringing to market a consumer friendly AI driven trading service.
Take a listen to the episode, leave us some feedback and let us know what you think?
On the one hand we hear...
This month’s trading theme is "Trading Essentials" and in this week’s lesson we’re going to cover the considerations for choosing the right broker and charting platform.
Choosing the right broker and charting software is probably one of the most important decisions you can make when you first start trading.
In this short video we will discuss the 5 main things you want to consider when deciding on a broker platform.
In summary they are:
As it pertains to charting platforms, consider the following criteria:
Btw I often get asked which brokers and charting platforms I would recommend.
The answer is always it depends.
For instance because I am primarily trade futures and NA equities intraday and swing trade stocks, I personally use ...
I’m excited to announce April’s meetup as well as a new format for our monthly trader meetups.
Up until this point we've taken a somewhat scattershot approach to the topics we've covered. If you’ve been with us for a while you’ll know that we’ve covered everything from trading systems, psychology, methodology, backtesting, algo trading, peak performance, cryptocurrencies, and everything in between.
For the next several months we will work progressively through a number of core trading themes.
Starting this month we will begin to take this thematic approach to learning to help deepen our understanding and to allow us to better explore each month’s chosen topic.
How this will work is that each week through this Weekly Perspectives newsletter we will introduce the idea/lesson of the week and introduce questions for your feedback,...