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Full Show Transcript
[00:01] Hey, it’s Adrian here, and look, I just figured out something really huge that has a dramatic effect on your ability to make money trading in the stock market and what did he share with you? Because I think it’s just so important. The thing I was struggling with, I was pondering so many facebook groups out there with people talking about systematic trading. You know, if you go google amy broker groups on facebook, you’re gonna find a whole lot of different groups and there’s hundreds and hundreds of thousands of traders in those groups talking about coding and systems and backtesting and yeah, I’d be willing to bet that at least 95 percent of those traders in those groups are not profitable and I figured out why. You want to know why. The reason is they using the trading software for the wrong thing. Typically if you go look in those facebook groups and you look at the sort of questions that, that people are asking and the sort of things people are posting, what they’re doing is they’re posting and asking questions to show how clever they are and how right they can be.
[00:57] You know, they’re trying to do, you know, clever, smart things with their code. They’re trying to figure out complex ways of doing things in the market. And the trouble is that’s exactly the wrong behavior to make money trading systematically. What you need to make money trading systematically is simple trading systems that are robust and stable and work over a long period of time over a wide range of parameters and markets. But if you look at what’s happening in these facebook groups around, you know, amy broker and trading systems and trading system development, there’s all these people trying to prove how clever and brilliant they are, how great their coding skills are, you know, whether or not they have, whether they have, um, you know, the, the, the smartest way of coding a particular problem or you know, that sort of thing. And what it leads to is fragile systems over optimized systems, curve fit systems.
[01:50] So if you want to be profitable, if you’re a system trade, if you’ve got amy broker, other trading software and you’re not profitable yet, the reason is probably that you’re over complicating it. And if you look at the trading groups that you hang out in, if those groups are all about, hey, I want to do this fancy code and you’re getting responses to your questions with really complex code and lines and lines of I’m a fancy coding Toronto, achieve certain things that you’re, you’re, um, you’re putting into your system, then you’re falling into the trap of making it too complicated. The Art, the magic of profitable system trading is developing simple trading systems that work. And when, uh, when I say a simple trading system that works, it should have five or six rules Max and it should have a profit profile and equity curve over 10, 20, 30 years.
[02:44] That is smooth and consistent and profitable. Yeah, okay. There’s going to be drawn downs as the system comes in and out of sync with the market. But what you don’t know, you, you’re not looking for a system that works over three or six months. You’re looking for a system that works over years, decades and only simple systems will stand the test of time and work for that length of time. So that’s the, that’s the problem, you know when people are not proper profitable with systematic trading because they’re overcomplicating it, they’re trying to be fancy, the trying to show how bright they are clever they are, and that’s not the way to profitable trading. You going to show if you want to succeed, you’ve got to show how clever you are by how much you can simplify your ideas to the essence, the very essence of the idea, because that’s where the market edge is.
[03:29] The market edge is not in the fancy coding and fancy rules. The market edge is in the essence of the concept that you’re trying to trade. So turn your intelligence, turn your creative energy to that. If you can distill out the essence of what that edge is, the you’re trying to catch and test it, chances are you’ll be on a winner. You’ll find a system that works over a long period of time and you’ll get your trading goals in the market. I’m going to go because there’s a lawnmower and that’s driving me mental is way too noisy. So that’s all for this video. I’ll see you in the next one. Bye for now.