I work with many traders who aspire to turn their passion for the markets into a serious trading business. And I think this aspiration is entirely appropriate – it’s critical to approach the trading problem as seriously as you would any business venture. A question that always comes up is, “Where do I start?” In …
Your job, as a trader, is to take all the information we have available now and make a judgment on whether something is trading at the right price or not, given things you can know here: Is it the wrong price? Can we buy it too cheap, or sell it too rich? Let’s say we …
In 2021, James, I, and a small team decided to set up a crypto trading venture. We faced several problems, but knowing almost nothing about crypto was the most significant. We sensed that the fractured, developing nature of the crypto market would likely be a good place to seek out inefficiencies, but beyond that, we …
Alpha isn’t just about finding people willing to trade at bad prices. Although that’s a necessary condition, it’s not enough. We also need to know why people are willing to buy too expensive or sell too cheap. The reasons are pretty simple: The first reason requires the existence of other uninformed traders, or what some …
In Australia, if you’re serious about getting the job done effectively and efficiently, you might say: “I’m not here to f*** spiders.” Many traders act like they are, indeed, here to f*** spiders. If you’re making soup, you first need a good stock. Stock isn’t exciting. Everyone has stock. Garnish is exciting, but you can’t …
Many beginner traders don’t realize how variable the p&l of a high-performing trading strategy really is. Here’s an example… I simulated ten different 5 year GBM processes with expected annual returns of 20% and annualized volatility of 10%. (If you speak Sharpe Ratios, I’m simulating a strategy within known Sharpe 2 characteristics.) I plotted the …
One of the keys to running a successful systematic trading business is a relentless focus on high return-on-investment activities. High ROI activities include: Implementing new trading strategies within a proven framework. An example might be to implement a portfolio of pairs trades in the equity market. Scaling existing strategies to new instruments or markets. For …
Imagine you’ve tinkered for days or even weeks, perfecting a strategy idea that’s showing a whole lot of promise. You’ve meticulously tweaked a mouth-watering Sharpe Ratio out of your backtests….it even survived costs. YES! Systems go, let’s trade it. Imagine this new strategy enters a drawdown.…maybe a lengthy one….maybe from day one! How would you …
One of the biggest wins we have at Robot Wealth is in helping aspiring traders see the markets, and profitable trading, for what it really is. Rather than utilising a tried and tested approach that has generated real money in the markets, in practice, many aspiring traders gravitate to seemingly exciting approaches with the weakest …
