Weekly Perspectives: The Shortcomings of Backtesting 🔭 🔬

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...

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Weekly Perspectives: Developing Your Trading Playbook 📓🔖

 Hi Traders,

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:

  1. Define your trading system
  2. Diversify your systems
  3. Focus on 1 system at time and accumulate the metrics
  4. Practice perfect...
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Weekly Perspectives - Trading Essentials: Developing A Trading Business Financial Plan

Trading Essentials:  Developing A Trading Business Financial Plan


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...

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Weekly Perspectives - Trading Essentials: 🔭 Start With A Vision 🔭

Trading Essentials: Lesson Of The Week: Start With A Vision

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:

  • Goal Setting
  • Asking Questions
  • The Power of a Checklist
  • Mastering Critical Trading Skills
  • Refocusing
  • And Much More

... 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 ...

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Weekly Perspectives - Trading Essentials: Choosing The Right Broker and Charting Platform

Trading Essentials: Lesson Of The Week: Choosing The Right Broker and Charting Platform

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:

  • Price
  • Margin requirements
  • Speed
  • Service & Support
  • Reliability

As it pertains to charting platforms, consider the following criteria:

  • Features
  • Market data access
  • Price
  • Hardware requirements
  • Stability
  • Portability

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 ...

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Weekly Perspectives - Announcing April Traders Meetup

weekly perspectives Mar 28, 2017

Announcement - April Traders Meetup - Trading Essentials: Trading Plans and Trading Rituals For Success

Hi traders,

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,...

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