Frequently Asked Questions

Ask me anything

Since 93% of my website traffic is brand new, people like you who want to learn stock trading, I would like to introduce myself and help you answer all of your burning questions about Enlightened Stock Trading.

For those of you who don’t know, my name is Adrian Reid, a full-time stock trader over 20 years and the founder of Enlightened Stock Trading.  I’ll show you how to make consistent profits from the stock market using a trading system that fits your lifestyle, goals and personality.

Early in my education when I was first trying to learn stock trading, I read hundreds of trading books trying to find the answers. From those books I tried countless different trading approaches which the authors claimed to be profitable. The trouble was none of them worked for ME. You have probably had similar experiences, right?

I had many major realizations that finally helped me start making money, and have been making me money trading ever since. These are at the core of everything I do at Enlightened Stock Trading.

For all of my students looking to learn stock trading I have found that having the opportunity to ask trading questions and get great answers is critical to becoming a successful stock trader quickly!

On this page you will find a large number of frequently asked trading questions, about Enlightened Stock Trading, The Trader Success System, The Crypto Success System and about trading in general – I trust you will find them useful. If you have a question that is not covered, ask it in the comments below and I will address it for you.

So, what can I answer for you?

Frequently Asked Questions about Enlightened Stock Trading

How is Enlightened Stock Trading's approach different from everyone else?

Enlightened Stock Trading fundamentally differs in its approach by emphasising the development of trading systems that are not only tailored to individual traders’ personalities, objectives, and lifestyles but also rigorously tested for stability and robustness. This ensures that the strategies you deploy are not just theoretically sound but practically effective in the real trading world. We don’t just chase after the latest trends or market anomalies; instead, we focus on creating a foundation that equips you with the skills to develop, test, and refine your own strategies.

Moreover, our commitment to education and empowerment sets us apart. We’re not here to hand you a fish; we’re here to teach you how to fish in the metaphorical ocean of stock trading. This philosophy ensures that our traders are not perpetually dependent on guru tips but are equipped to make independent, informed decisions that resonate with their unique trading journey. 

Our flagship program, The Trader Success System, is the last stock trading course you will ever need. We guarantee to put you in the driver’s seat and give you the tools to be independent and become a confident stock trader for decades to come.

Why is systematic trading better than discretionary trading?

Systematic trading offers several distinct advantages over discretionary trading, particularly in terms of consistency, objectivity, and emotional management. First, systematic trading removes the emotional rollercoaster often associated with trading decisions. By adhering to predefined rules, traders can sidestep the psychological traps of fear and greed that typically plague discretionary trading.

Moreover, trading systems can be rigorously tested and validated through backtesting, providing a clear picture of a strategy’s effectiveness over time. This isn’t just about past performance; it’s about understanding the robustness of your trading approach under various market conditions and the stability of your edge over time. 

Discretionary traders, on the other hand, often rely on subjective judgments that can vary in effectiveness from day to day and are hard to evaluate systematically.

Another key benefit of systematic trading is the ability to scale and diversify more effectively. Systematic trading allows for managing multiple positions across different markets without the cognitive overload that a discretionary trader would face. This broad diversification can significantly reduce risk and enhance the potential for stable returns.

In essence, systematic trading equips you with tools to make decisions based on data and verified trading rules, rather than hunches or emotional responses. Systematic trading greatly enhances your chances of long term success while also reducing the time it takes you to become successful.

I am an analytical person who likes numbers and facts, is your approach right for me?

Absolutely, my approach to systematic trading will feel very natural for you because of yoru interest in numbers and factual analysis. The essence of systematic trading is built on creating, testing, and implementing trading rules that are backed by empirical data and quantifiable testing. This method not only minimizes emotional decision-making but also provides a structured way to evaluate performance historically to gauge potential future outcomes.

By focusing on backtesting and the quantifiable aspects of trading strategies, you can apply a scientific approach to your trading decisions. This means you can see how strategies would have performed in the past under various market conditions, giving you a solid foundation of confidence in your trading rules 5 . This rigorous, numbers-driven approach aligns perfectly with an analytical mindset, ensuring that every decision is supported by data, not just gut feelings or market sentiment.

I am a qualitative person who does not like numbers or computers, can you help me?

I understand where you’re coming from, and it’s great that you’re upfront about your preferences. Trading, especially systematic trading, leans fairly heavily on numerical analysis and often requires a fair degree of computer use.

You don’t have to be a rocket scientist for our approach to work for you, but if you really don’t like numbers and computers then this isn’t for you.

How can systematic trading help me achieve more consistent results?

Systematic trading is a powerful tool for achieving consistency because it relies on predefined rules that guide your trading decisions, removing the guesswork and emotional bias that often plague discretionary trading. By using a systematic approach, you establish a clear set of criteria for when to enter and exit trades, which is based on historical data and statistical analysis. This method ensures that each decision is not just a one-off guess but part of a tested strategy that has shown to be effective over time.

For instance, once you’ve developed and backtested your trading rules, your daily trading routine becomes straightforward and efficient. You simply run scans to identify buy or sell triggers and execute trades accordingly. This not only saves time but also increases your trading discipline, as you’re less likely to deviate from your strategy due to emotional responses like fear or greed.

Moreover, systematic trading allows for significant diversification. You can manage multiple positions across various markets without feeling overwhelmed, as the system handles the complexity for you. This diversification helps in spreading risk and enhancing the potential for stable returns.

In essence, systematic trading equips you with the tools to execute trades based on robust, empirical evidence, leading to more predictable and reliable outcomes. 

How can systematic trading align with my career and financial goals?

Systematic trading can be a powerful ally in aligning with your career and financial goals by providing a structured, disciplined approach to the markets. This method leverages predefined rules, minimizing emotional decision-making and enhancing consistency in your trading results. For instance, by using backtesting, you can gain confidence in your strategies before you even execute them, ensuring that they are robust and suitable for your risk tolerance and financial objectives.

If your career doesn’t allow you to monitor the markets throughout the day, systematic trading allows you to trade on a schedule that fits your lifestyle. You can set up your trading system to operate on daily charts, which means you only need to check your positions once a day, making it feasible to manage alongside a full-time job. This can be particularly beneficial if you’re aiming to build wealth while maintaining career stability.

Moreover, systematic trading can contribute to your financial goals by aiming for consistent returns over time. By diversifying your trading strategies, you can spread risk across various assets and market conditions, potentially smoothing out returns and reducing the likelihood of significant drawdowns. This approach can be crucial for long-term wealth building, where stability and gradual growth are preferred over erratic gains and losses.

I am comfortable trading my home market - can you help me improve my local trading?

Absolutely, enhancing your performance in your home market can be very rewarding. A key approach is to refine your trading strategies to suit the specific characteristics of your local market. This could involve adjusting for factors like market liquidity, dominant sectors, and typical market behaviour / volatility patterns.

Another powerful step is to rigorously backtest your strategies against historical data from your local market. This will help you understand how your strategies would have performed in the past and identify any potential adjustments that could improve their effectiveness.

Diversification is also crucial. Even within a single market, diversifying across different strategies / timeframes / directions (long and short) can help reduce risk and improve the stability of your returns. We can help you identify how well your current strategies perform and find solid diversification opportunities within your market very quickly. The Trader Success System provides a large number of complete trading systems that can be adapted to many markets, so there is something for you no matter where you live and trade.

The most important consideration is whether you’re overly concentrated in any one area and look for opportunities to spread your investments more broadly.

Can you help me diversify my trading internationally?

Absolutely, international diversification is a smart move to enhance your trading strategy and can significantly improve your returns while managing risk. By trading across multiple global markets, you tap into different economic cycles and market dynamics, which can help in reducing the correlation between your investments and smoothing out returns.

For starters, you should consider markets that have different economic drivers compared to your home market. This could include looking at countries with varying dominant industries, economic policies, and growth rates. For example, if you’re heavily invested in the technology sector in the U.S., you might look into commodities-driven markets like Australia or emerging markets in Asia which can offer different growth opportunities.

It is crucial to backtest your strategies in these new markets to ensure they are adapted to local conditions and can perform well despite different volatility patterns and trading volumes. This step is essential to confirm that the diversification will indeed add value to your portfolio.

The Trader Success System provides a broad range of trading strategies that can be used on many markets including US, Australia, Canada, Hong Kong, London, Various European Markets, Taiwan and more.

Remember, while diversifying, it’s important to manage the complexity and not overextend yourself by entering too many markets or trading in time zones that don’t fit your lifestyle. Starting with one or two additional markets can be a good way to expand your reach without becoming overwhelmed.

Beyond this point automation becomes important to unlock a new level of diversification. Our Smart Stock Automation can fully automate all of your trading between Amibroker and Interactive Brokers to provide you with stress free trading no matter how many markets you trade.

Can you show me how to make money in a bear market?

Absolutely, making money in a bear market is entirely possible with the right strategies. One effective approach is short selling, which capitalizes on declining market prices. It involves selling borrowed stocks at current prices and then buying them back later at lower prices, thus profiting from the price difference. 

In The Trader Success System you get access to a number of powerful short selling strategies that work in several markets where short selling is permitted.

Another strategy is to use a system that shorts individual stocks or ETFs after a small rally, anticipating that the downtrend will continue. This type of system typically uses a wide stop loss to accommodate the steep rallies that can occur in bear markets.

It’s also crucial to diversify your trading strategies. By having systems that can profit from different market conditions, you reduce dependency on any single market behavior. This approach not only helps in managing risks but also in maintaining steady returns across various market scenarios.

What is the time commitment required to start trading systematically?

Starting to trade systematically does require a focused time commitment initially, but it’s far more manageable than many anticipate. Typically, the initial phase, where you’re learning and backtesting your trading systems, might take a few months of dedicated effort. You might need to carve out some time from your usual activities—perhaps a bit less leisure or family time—to focus on setting up your system, using your commute time to learn is also a great strategy that I used early on… this is why The Trader Success System is designed in short, bite sized tutorial videos that you can watch on your phone.

We shorten the learning curve dramatically by providing you with a ready made portfolio of trading systems to choose from. These systems cover all the major strategies / markets / timeframes so there is something for everyone. These systems are all fully coded for you, ready to learn, test and implement.

Once you’ve established your portfolio of systems, the daily time commitment can be quite minimal. For many traders, including myself, maintaining a systematic trading routine takes about 20-30 minutes per day. This includes updating data, reviewing trades, and executing new trades as dictated by your system. This efficiency is one of the great advantages of systematic trading—it allows you to engage with the market effectively without it taking over your life.

I did a trading course previously and it didn't work for me, how is this any different?

I understand your frustration with past courses that didn’t meet your expectations. It’s a common issue in the trading education space, where many programs offer generic advice that lacks practical application. 

The key difference with The Trader Success System is its focus on not just teaching trading strategies, but also on empowering you with the skills and knowledge to backtest, evaluate and refine these strategies for yourself. This allows you to ensure they fit your specific trading style and goals.

Unlike most trading courses which teach discretionary approaches, our program ensures you can replicate our trades exactly. If you trade the same system as us, we will get the same signals every time – this is perfect for building your confidence!

This system is designed to help you build a personalized trading approach that is systematic, rules-based, and tested against historical data to ensure reliability and effectiveness. It’s not about following tips or market noise; it’s about developing a disciplined, systematic approach that you can rely on, regardless of market conditions.

Moreover, The Trader Success System includes comprehensive training and tools for backtesting and system enhancement, which is crucial for understanding how your strategies would perform in real-world scenarios. This hands-on approach helps build confidence in your trading decisions, making it easier to stick to your system even when emotions might sway you otherwise.

Can I manage my trading activities around a full-time job?

Absolutely, you can manage trading activities around a full-time job, and many successful traders do just that. The key is to adopt a systematic trading approach that fits your schedule and doesn’t require constant market monitoring. For instance, using End of Day (EOD), weekly or even monthly trading strategies allows you to review and execute trades after the market closes, which is ideal for those with daytime commitments.

This approach minimizes the time needed daily, focusing on making strategic decisions based on the day’s overall performance rather than reacting to minute-by-minute changes. It’s about smartly integrating trading into your life without it overshadowing your job or personal time.

We can also show you how to fully automate your trading to free yourself up even more. Of course automated trading is not a set and forget, get rich quick strategy, but it does dramatically reduce the amount of time you need to spend and reduce execution mistakes. Perfect if you have a busy life.

How much technical trading knowledge do I need before starting your program?

You don’t need a vast amount of technical trading knowledge to start with The Trader Success System. The program is designed to accommodate both beginners who are just starting out and experienced traders looking to refine and diversify their strategies. 

We cover everything from the basics of stock trading to more advanced topics like backtesting, risk management, capital allocation, optimization and monte-carlo analysis. 

The Trader Success System is laid out in a strategically designed, 5 stage journey to take you from Launch to Mastery in the shortest time possible. This ensures that you can start at your current level of knowledge and quickly ramp up your skills.

The key is your willingness to learn and apply the concepts. The system provides step-by-step guidance and all the tools you need to become a confident and successful systematic trader. 

I have not started trading yet (I am a beginner), will this work for me?

Absolutely, the Trader Success System is perfectly suited for someone just starting out in trading. It’s designed to take beginners with little to no experience and guide them through a structured learning path towards becoming confident and proficient traders. The program includes comprehensive courses that cover the basics of stock trading and gradually move to more advanced topics like backtesting and system optimization.

You’ll learn to develop a systematic approach to trading, which is crucial for consistent results. Plus, you’ll be part of a supportive community that’s geared towards helping each other succeed. This is a great way to start your trading journey on the right foot, equipped with the knowledge and tools necessary to navigate the markets effectively.

I am currently a discretionary trader, can you help me be more consistent?

Absolutely, transitioning from discretionary trading to a more systematic approach will significantly enhance your consistency. The key to achieving this is by implementing and following objective trading rules that remove much of the emotional decision-making often associated with discretionary trading.

In systematic trading, you set specific criteria for your entry, exit, and money management rules, which are then tested for profitability through rigorous backtesting. This not only helps in building confidence in your strategies but also ensures that you are making decisions based on data and proven performance, rather than gut feelings or market noise.

The Trader Success System is designed to guide you through this process, providing you with the tools and knowledge to develop, test, and implement robust trading systems. By embracing a systematic approach, you’ll find that your trading becomes more disciplined and less prone to the psychological biases that can affect discretionary traders.

This shift can dramatically increase your trading consistency, as you’re relying on tested strategies that work across different market conditions, rather than spontaneous decisions. 

How will the course guide me so I don't get overwhelmed or waste time on unnecessary things?

The Trader Success System is strategically structured to prevent you from feeling overwhelmed and to maximize your time efficiency, ensuring a smooth progression through the complexities of trading. The course is divided into clear, sequential stages—each designed to build on the previous one, allowing you to develop a solid understanding of trading systematically without information overload.

1. Launch: You’ll start by learning the basics of a trading system, focusing on understanding and implementing its rules, which eases you into the trading environment without overwhelming you with too much detail at once. At the end of Launch you will be trading with 1-2 systems that you fully understand.

2. Stabilize: As you gain comfort with your initial trading systems, this stage introduces backtesting and validation, empowering you with the tools to confirm your strategies’ effectiveness, thus boosting your confidence and efficiency.

3. Diversify: With a firm grasp on the systematic trading process and backtesting, you’ll then learn to manage multiple systems. This not only diversifies your risk but also enhances your potential returns, focusing your learning on effective portfolio management and adapting to various market conditions.

4. Automate: To further streamline your trading process, this stage teaches you how to automate your trading systems. Automation reduces the time you spend on routine tasks and minimizes emotional trading decisions, making your trading practice more efficient and disciplined.

5. Mastery: In the final stage, you’ll refine your trading strategies and adapt to new market conditions. This advanced training focuses on comprehensive system analysis, optimization and continuous improvement, preparing you to handle the evolving markets with expertise.

Each module within these stages is actionable and focuses on key aspects of trading such as system development, backtesting, and risk management—central elements that help you focus your efforts on what truly matters, preventing wasted time on less impactful activities. Live coaching sessions and a supportive community forum provide real-time assistance and feedback, ensuring any questions or uncertainties are addressed promptly, keeping you on track without delays.

This comprehensive, step-by-step approach not only ensures that you’re not overwhelmed with information but also guarantees that each step you take is purposeful and builds towards your ultimate goal of trading mastery.

In addition to your training programs, what additional tools / software do I need?

All of Enlightened Stock Trading’s programs are driven by backtesting and analysis. In addition to the knowledge and systems you get in The Trader Success System, you also need backtesting software (such as Amibroker, Realtest or Wealth-Lab) and a subscription to an end-of-day data service. For data we use and recommend Norgate for US, ASX and TSX; for other markets we use and recommend Metastock data.

How does the program cater to someone new to systematic trading but experienced in other forms of investment?

The program is specifically designed to bridge the gap for investors like you who have experience in other forms of investment but are new to systematic trading. It starts with the fundamentals of systematic trading, ensuring you understand the core principles and how they differ from other investment methods you might be familiar with. This includes detailed sessions on the importance of backtesting, the role of trading psychology, and the systematic approach to risk management.

Given your existing investment experience, you’ll appreciate the depth we go into regarding strategy development and optimization, which are crucial for creating robust trading systems. The course also emphasizes practical application, allowing you to apply systematic methods to the types of assets and markets you’re already familiar with, enhancing your transition.

Moreover, the program is structured to ensure you don’t waste time on basics you might already know from other investment forms. Instead, it focuses on the specific tools and techniques that are unique to systematic trading, ensuring a smooth and efficient learning curve.

What kind of risk management strategies do you teach?

In the Enlightened Stock Trading courses, I emphasize a comprehensive approach to risk management that’s designed to protect your trading capital and enhance your profitability over the long term. One of the key strategies I teach involves the meticulous design of position sizing rules. This ensures that you’re not risking too much on any single trade, which is crucial for surviving the inevitable downswings in the market.

Additionally, I cover the importance of managing your total exposure across all trades. This includes setting limits on the total risk you’re willing to take at any given time, which helps in maintaining a balanced and resilient portfolio.

We also cover portfolio construction and capital allocation in depth to ensure you build a portfolio of trading systems that will stand the test of time and protect your capital no matter what happens in the market.

Risk management isn’t just about preventing losses; it’s about creating a stable foundation that allows you to capitalize on opportunities without jeopardizing your entire trading account. By implementing these strategies, traders can maintain control over their trading outcomes and avoid the common pitfalls that lead many to fail in the markets.

If I join The Trader Success System, what kind of support can I expect?

Joining The Trader Success System means you’re not just getting access to comprehensive trading education; you’re also gaining a support system that’s robust and tailored to help you succeed in the trading world. This includes live coaching sessions where you can get real-time answers to your questions and breakthrough workshops designed to advance your trading skills rapidly.

Moreover, you’ll be part of an exclusive community of like-minded traders. This community is a great resource for networking, sharing strategies, and discussing both challenges and successes in trading. The collective wisdom and support of this group can be invaluable as you navigate your trading journey.

Additionally, the program offers ongoing guidance and support, ensuring that you have the necessary tools and knowledge to navigate the markets confidently. We’re committed to providing you with the resources you need to achieve consistent profitability and grow as a trader.

What support and resources are available for someone who is keen on learning but needs guidance?

Joining The Trader Success System offers a comprehensive package designed to support your journey from beginner to mastery in systematic trading. You’ll benefit from a structured learning path that includes detailed online courses covering essential trading concepts like system profitability, risk management, and trading psychology. These courses are designed to save you years of trial and error and financial losses.

Additionally, you’ll have access to live coaching sessions and breakthrough workshops that provide real-time support and guidance, helping you to maintain high momentum and continuously improve your trading skills. These sessions are crucial for addressing immediate questions and refining your strategy execution.

Furthermore, you’ll be part of an exclusive community of like-minded traders. This community is invaluable for networking, sharing strategies, and gaining insights from experienced traders who are also navigating their own trading journeys. The collective wisdom and support found here can significantly enhance your learning and trading performance.

Lastly, you’ll receive a suite of trading systems that are fully disclosed, coded, and backtested, allowing you to implement proven strategies right away. This access not only saves you time but also gives you the confidence to trade with systems that have a demonstrated track record of success.

Is there a community or network where I can interact with other like-minded traders?

Absolutely, joining The Trader Success System not only provides you with comprehensive trading education but also integrates you into an exclusive community of like-minded traders. This community is a fantastic resource for networking, sharing strategies, and discussing both the challenges and successes in trading. The collective wisdom and experience found in this group are invaluable as you navigate your trading journey, offering both support and diverse perspectives that can enhance your trading decisions and strategies.

In The Trader Success System Mentoring  Program we have 4 live sessions each week: 2 Q&A support sessions with our team of coaches where you can get your questions answered and learn from the other participants as well. We have a Breakthrough Workshop where we teach new content or build on your knowledge in real time as a group. Finally we have System Builder’s Club where we dissect systems that myself, the coaches and the community are working on to make them stronger.

What are the expected outcomes of The Trader Success System?

The expected outcomes of The Trader Success System are designed to fundamentally transform your trading approach and results. By engaging with this comprehensive program, you can expect to achieve a deep understanding of systematic trading, which includes mastering backtesting, risk management, and the psychological aspects of trading. This system equips you with a portfolio of proven trading strategies that are fully disclosed, coded, and backtested, ensuring you can start implementing them with confidence right away.

Moreover, the program is structured to help you build a robust trading plan that suits your personal financial goals and risk tolerance. You’ll also gain access to a supportive community of like-minded traders, which provides a platform for sharing strategies and experiences, further enhancing your learning and growth in the trading field.

The ultimate goal is to make you a confident, independent trader who can navigate the markets effectively, regardless of the market conditions. This empowerment comes from not just learning, but applying what you learn in a real-world setting, supported by continuous guidance and mentorship.

In short, The Trader Success System is the last stock trading course you will ever need.

How customizable are the trading strategies? Can they be tailored to personal financial goals and risk tolerance?

Absolutely, the trading strategies within The Trader Success System are highly customizable. They are designed to be tailored to fit your personal financial goals and risk tolerance. This customization is a core feature of the system, ensuring that you can adjust the strategies to match your specific needs and preferences.

Each strategy comes fully disclosed and coded, which means you can see exactly how they work and modify them as needed. Whether you’re looking to manage risk more conservatively or aggressively pursue growth, the system provides the flexibility to make those adjustments. The training also includes comprehensive guidance on how to evaluate and adapt the strategies to ensure they align with your objectives, enhancing your ability to manage your portfolio effectively.

This approach not only helps in fine-tuning your trading strategies but also empowers you to become a confident and independent trader, capable of making adjustments based on changing market conditions or personal circumstances.

I have $1,000 to invest, will this work for me?

If you have around $1,000 to trade with this will be difficult because to get the maximum out of the program you will want to diversify across several different strategies. In addition the returns you get on your modest account are unlikely to justify your investment in The Trader Success System. Having said that, if you have money set aside for your education (separate from your $1-2k trading capital) and you will be in a position to add to your trading capital over time then this program can absolutely work for you. 

If you will not be in a position to add to your trading capital then I would advise you against taking this course because the cost of the program is substantial compared to your trading capital and will be difficult to make it economically viable for you.

Unfortunately many traders with small amounts of capital attempt to start trading without the right education and end up losing everything (or more). It is absolutely a trap you must avoid – when you have a small starting capital base it is critical to avoid blowing up your account and learning to save to add to your account. 

While it is possible to start trading with $1,000 it can limit the scope of strategies that will work and you will not be able to diversify much initially. You can start by focusing on one trading system and gradually expand as your capital and experience grow. The key is to trade effectively within your means, ensuring each decision aligns with a well-tested strategy.

It’s crucial to manage your expectations and understand that trading with a smaller account requires careful risk management and avoid taking large risks to try to grow your account quickly. However, with the right approach and continuous learning through resources like The Trader Success System, you can progressively build your trading skills and increase your investment capacity. 

I have $50,000 to invest, will this work for me?

With $50,000 to invest, you’re in a great position to leverage The Trader Success System effectively. This amount allows you to diversify across multiple trading strategies, which is crucial for reducing risk and enhancing potential returns. By applying systematic trading principles, you can manage this capital in a way that aligns with your risk tolerance and financial goals.

Diversification is key in trading, and with $50,000, you can implement several strategies from The Trader Success System. This will not only spread your risk but also give you the opportunity to test different markets and trading strategies and timeframes.

Moreover, this level of investment means you can take full advantage of the educational resources and community support offered by the system. You’ll be able to engage more deeply with backtesting, risk management, and the psychological aspects of trading, all of which are crucial for long-term success.

I have more than $250,000 to invest, will this work for me?

With $250,000 to invest, you’re exceptionally well-positioned to fully capitalize on The Trader Success System. This substantial amount allows for significant diversification across numerous trading strategies / markets / timeframes, which is vital for minimizing risk and maximizing potential returns. By applying the systematic trading principles we advocate, you can manage this capital effectively, aligning perfectly with your risk tolerance and financial objectives.

This level of investment also enables you to deeply engage with all educational resources and community support offered by the system. You’ll have the opportunity to explore advanced aspects of trading such as sophisticated backtesting, comprehensive risk management, and the nuanced psychological facets of trading—each of which is crucial for sustained success in the markets.

Given the scale of your investment, you could explore a wide array of markets and trading strategies, potentially including both stocks and cryptocurrencies, depending on your interest.

What is a backtest in trading?

Simply put, backtesting involves inputting your trading system rules into specially designed software and applying these rules to historical data. This process generates all the buy and sell signals these rules would have produced in the past. The software then converts these signals into a portfolio and provides the portfolio’s performance statistics, such as compound annual return, drawdown, percentage of winners and losers, size of wins and losses, MAR ratio, and more. Consequently, backtesting provides a rapid analysis of your trading rules’ performance based on past data, indicating whether these rules have been profitable.

Is backtesting useful?

The answer to this is an unequivocal yes. It is a significant tool in your trading arsenal, when used correctly. The critical aspect to consider is whether you prefer to trade blindly or have a record of your strategy’s past profitability. While we can’t foretell the future or apply our trading rules to it, we can work with past data. If your trading rules weren’t profitable in the past, they aren’t likely to turn profitable in the future. Conversely, if they were profitable in the past, they might continue to be so in the future. Correct backtesting, as previously discussed, greatly increases the likelihood of your system’s future profitability.

Is backtesting a waste of time?

The answer is a definitive no. What does waste time is blindly adhering to a set of rules you haven’t tested and whose long-term profitability you’re uncertain of. It’s equally unproductive to run a brute force optimization of numerous parameter combinations on a backtesting engine, select the best parameter from the past decade, and apply it to future data in the hopes of becoming rich. This approach is fruitless and will lead to losses. However, correct backtesting is an invaluable tool that ensures the stability and robustness of your system across various parameter values, its performance across different market conditions, and the maintenance of its edge.

Does backtesting work?

It absolutely does, provided it’s done correctly. Backtesting can provide extensive insights into your trading strategy. However, the accuracy of these insights hinges on the right process, which I teach in The Trader Success System which is far more than just a backtesting course. If you’re keen on learning how to backtest and operate a systematic portfolio in a way that maximizes the potential for real trading profits, then join The Trader Success System.

Which course is best for learning about the share market & trading in Australia?

The best share market trading course in Australia is the one that is designed to empower you as a trader to profitably trade on the Australian Stock Exchange with trading systems that actually work in the Australian market. The share trading systems that work in Australia are different than those that work in the US and other markets, because all markets have their own unique personality driven by the different market participants and industry makeup.

In addition to focus on the Australian stocks, the best share market trading course in Australia will also show you how to quickly and easily diversify from Australian shares into the international markets, safely and with confidence.

The Trader Success System has all of this – Australian specific trading systems as well as systems for international share markets and clear step by step instructions on how to build a diversified portfolio of share trading systems.

How can I learn stock market trading?

There are three methods to learn stock trading, ranging from slow and ineffective to fast and efficient. They are:

1. Trial and Error:

Most new traders just jump into the markets with either a demo trading account or a live trading account and start trading, taking tips and listening to social media trading groups for guidance. This is the WORST and MOST COSTLY method to learn share market trading. It is the most costly because despite the fact that you don’t pay for any courses, you will pay for your learning with real losses in the market. Most traders who learn by Trial and Error end up blowing up multiple share trading accounts before learning how to trade profitably.

2. Reading The Best Share Trading Books:

If you like to read trading books then you can certainly learn share market trading by reading a large number of trading books. This certainly works because that was my approach 20 years ago when I first learned share trading. The challenge is most trading books are quite repetitive and contain a lot of irrelevant padding which just doesn’t help you. I read over 200 trading books on my journey to profitable share trading… needless to say this took a long time. So while this method does not cost you much in dollar terms, it does cost a HUGE amount of TIME. As the saying goes, time is money… because every month that goes by is a lost compounding opportunity.

3. Take an Enlightened Stock Trading Online Stock Trading Course:

The fastest and most cost effective way to become a successful stock trader is to join The Trader Success System membership. Whilst this is obviously a continuing investment in your trading, it saves you an immense amount of time and ensures you start trading the right way so you won’t blow up your account and lose everything like most traders. Our members typically start trading systematically live in as little as a few weeks after joining our membership. This accelerated pathway will make your compounding kick in sooner which will dramatically increase your future wealth as a result!

What qualifications do you need to be a stock market trader?

One of the great things about being a private stock market trader is that you don’t need any qualifications at all to get started. Anyone can open a share trading account and start managing their own money. However, you do need to learn the skills to succeed trading stocks, and that is exactly what you will learn in The Trader Success System.

Obviously if you want a job as a share trader for a trading firm or fund you will need relevant qualifications in finance to even get a look in the door. But this is not my preferred approach – Private trading for your own account is the best way for most people to learn stock trading and build their wealth as trading jobs are hard to come by, very competitive and extremely high pressure. I started trading for freedom, not stress and pressure, so that is why I am a private trader.

Why should I choose Enlightened Stock Trading for the best stock trading course online?
The Enlightened Stock Trading courses empower you with all the knowledge, systems and tools you need to for a lifetime of profitable trading. Unlike most online share trading courses, with us you don’t need to graduate through 5 different courses with ever increasing costs just to have a hope of becoming a profitable trader. Enlightened Stock Trading courses are designed to give you everything you need to make you INDEPENDENT as a trader.

Once you have completed The Trader Success System, you will have everything you need to succeed and you should never NEED another trading course ever again. Of course you may wish to branch out and learn some new systems etc, but The Trader Success System gets you to the point where you are truely independent as a trader.

This is unique in the market as most trading educators teach you just enough to be dangerous and then try to upsell you to the next course for 10x the price. We don’t do that here… Check out The Trader Success System, the only trading course you will ever need.

Why should I choose Enlightened Stock Trading for the best stock trading course online?

The Enlightened Stock Trading courses empower you with all the knowledge, systems and tools you need to for a lifetime of profitable trading. Unlike most online share trading courses, with us you don’t need to graduate through 5 different courses with ever increasing costs just to have a hope of becoming a profitable trader. Enlightened Stock Trading courses are designed to give you everything you need to make you INDEPENDENT as a trader.

Once you have completed The Trader Success System, you will have everything you need to succeed and you should never NEED another trading course ever again. Of course you may wish to branch out and learn some new systems etc, but The Trader Success System gets you to the point where you are truely independent as a trader.

This is unique in the market as most trading educators teach you just enough to be dangerous and then try to upsell you to the next course for 10x the price. We don’t do that here… Check out The Trader Success System, the only trading course you will ever need.

How does stock trading courses with Enlightened Stock Trading work?

All Enlightened Stock Trading Courses are online in a private members area. Once you join the program you will get immediate access and you can move through the course material in a structured, logical manner. The courses are taught using a combination of video and written lessons with exercises to cement your learnings and allow you to customize your trading approach to fit your Personality / Objectives / Lifestyle.

Support is provided in our members area forum and we also have additional mentoring options available should you wish to work with Adrian personally on a regular basis to accelerate your stock trading education.

Will I receive support with Enlightened Stock Trading’s share market trading courses?

YES! The Enlightened Stock Trading share market trading courses are supported with access to a private Forum so you can ask questions, get support and interact with other traders on the same path as you are. Should you desire higher levels of personalised support then you can also join our Trader Mentoring program and work with our coaches live on your trading.

I have a question about one of Enlightened Stock Trading’s online share trading courses - how can I contact you?

Absolutely, I would love to help you with your questions so that you can confidently take the next step with Enlightened Stock Trading. The best way is to email me on [email protected]

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  1. Avatar

    Hi Adrian, how many systems would you recommend to combine to be able to cover all / most market states? In that context, what level of initial capital would you recommend to start with?
    Many thanks!

    Reply
    • Adrian Reid

      Hi Nicolaus,
      Great question – thank you for taking the time to post. When you are trading stocks systematically there are several different behaviours the market can exhibit. I have a model I use called The Market System Map which is shown below and discussed in greater detail on this post about bear market trading. In a nutshell, stocks can have a primary trend that is up (Bull Market), sideways (Ranging Market) or down (Bear Market)… within each of these primary trends three things can happen:
      1. The trend can continue
      2. There can be a sudden temporary shock against the trend
      3. The trend can change
      By combining the three primary stock market trend directions and the three behaviours within each, there are 9 possible behaviours that stocks can exhibit.

      The Market System map is illustrated here:
      The Market System Map - Stock Market behaviour model.

      If you want to cover all bases then having a portfolio of profitable stock trading systems that is able to make money in each of these 9 scenarios. This does not mean you have to have 9 systems, because each system can be profitable in several of the 9 behaviours. Typically traders should aim for the following stock trading systems in their portfolio:
      1. Long Side Trend Following Stocks: This will make you money when the stock market is trending up, and the strongest stocks can make you money as a bear market turns up into a new bull market, and also when the broader market is range bound the strongest stocks can still make you money. However trend following will lose money in dips during the bull market and also will lose money when the market turns down into a new bear market.
      2. Long Side Mean Reversion For Stocks: This will make you money from the dips and corrections that are inevitable during a bull market and even early in a bear market when stocks drop suddenly and then rally hard. When the market collapses suddenly though the mean reversion system will tend to lose money.
      3. Short Side Mean Reversion: One of the most challenging times for traders is when a bull market suddenly collapses into a bear market. If you are heavily long when this happens the drawdowns can be large, especially if you use leverage. I like having a system that short sells heavily overbought stocks and profits in a period of euphoria and then covers quickly at a profit when the stock corrects. This type of system (Like the Gravity Trading System that comes with The Trader Success System gives you a steady level of short exposure and profits during a bull market… then when the market collapse this system profits very well during the period of initial market weakness.
      4. Short Side Momentum: When a bear market is in full force then you can make good trading profits from a short side momentum system. These are systems that short weak stocks in a falling market and hold them until the stock or the market rallies.

      These 4 types of systems will give you a fairly stable portfolio which can profit in most market conditions. Once you have established a portfolio of stock trading systems like this you can continue to diversify – it takes very little additional effort to add another system to your portfolio.

      Then you are thinking about how much trading capital you should start with, this will be very individual. You should start with enough capital to make sure you treat your stock trading seriously, but not so much that you are a nervous wreck worrying about the money as you learn. You can start with one system with as little as $1000, but the more you start with the easier it is to get the diversification you need to have a stable portfolio.

      If you want to work through how much capital you need to trade stocks for a living then I would suggest you read this post about trading for a living and particularly look at the diagram that explains how much capital you need based on your stock trading returns, drawdown and living expenses.

      Thanks for the great question – I hope this helps!
      Adrian

      Reply
    • Avatar

      Hi Adrian

      Do you daytrade stocks and would you recommend it? If not what are the negatives from your experience? I don’t daytrade as of now as i feel the risk/reward and time commitments are significant even though some of my friends seem to be able to make it work! Thanks in advance.

      Reply
      • Adrian Reid

        Hi Viki,

        I don’t recommend daytrading unless it is automated or you are trading based on daily charts (eg. place a limit order to enter at a certain pullback and exit at the close of the day). The reason I don’t recommend daytrading beyond this is it is very challenging to remain profitable and it is extremely stressful. Most daytraders lose money long term and I don’t want to be in that situation!

        Adrian

        Reply
  2. Avatar

    Can systematic stock trading be used for all types and styles of trading? For example, from scalping or flow trading being minutes in the market to once a year trading like an annual rotation.

    Reply
    • Adrian Reid

      Hi Frank,

      Great question – thanks for asking! Systematic stock trading can be used for most styles of trading. At the core of pretty much every style are rules / guidelines / a checklist of when you should trade. When you take your trading systematic, you are documenting those trading rules, replacing the points of discretion with objective rules and then backtesting your rules to ensure they are profitable. If the rules are profitable then you can follow them as a trading system. I certainly know of systematic traders in the whole spectrum that you described in your question – all the way from scalpers to annual rotation style strategies.

      There may be some very discretionary styles that are difficult to systemize, or some chart based approaches that are hard to code, but in my experience these are difficult to be consistently profitable with anyway and I would certainly encourage you to look at adopting a systematic approach to eliminate the variability and reduce the number of mistakes you make in your stock trading.

      Following a stock trading system is so much easier emotionally and requires so much less time and effort than any other trading approach.

      I hope that helps, thanks the for great question!

      Adrian

      Reply
  3. Avatar

    Hi Adrian. I have a full time job and never home when the my stock market is open. How can I become a stock trader? Do I need to be in front of my computer live to be able to be a real trader?

    Reply
    • Adrian Reid

      Hi Jon,
      Thanks for your question – much appreciated. You can absolutely become a successful systematic stock trader even though you are away from the market when it opens because of your day job. I traded for many years while I was working a day job so it is certainly possible. The key is making sure that the stock trading systems you are using, especially at the beginning when you are first starting to learn stock trading, fit your Personality / Objectives / Lifestyle. With a full time day job you don’t what to be trying to place 20-30 trades a day where you have to monitor your trades during the day. End of Day Stock Trading (EOD Stock Trading) is best for people who have a day job.

      Even after I left the corporate world in 2012, I still kept trading the same way with EOD Trading Systems because I don’t like spending my whole day staring at the computer!

      In fact I would say you have a very distinct advantage because you have a day job because you are not relying on your trading to support you at the moment. This means you can focus on trading well and saving money to build your account rather than the week to week returns.

      Keep going – the goal is achievable AND it is so worth it.

      Let me know if there is anything else you need support with.

      Adrian

      Reply
  4. Avatar

    Adrian,
    I have heard you mention that you use adaptive orders to place your trades? Can you explain what those are?

    Reply
    • Adrian Reid

      Hi Tom,

      Thanks for your question! Adaptive orders are a order type for stocks that Interactive Brokers provide which is an algorithmic order. When you place an adaptive order, the order entry algo automatically manages the trade and adjusts the price between the bid and the ask to reduce slippage and improve the average execution price of your order. I have explained the Adaptive orders more in this blog post about order types for stocks. Have a read of that post and let me know if you have any more questions about it.

      Adaptive orders can be market or limit type orders – I frequently use Adaptive Market orders to enter at or near the opening price by placing my order before the market opens.

      Adrian

      Reply
  5. Avatar

    Hi Adrian,
    How do you know you have a trading system that fits your personality? And how do you find it?

    Reply
    • Adrian Reid

      Hi Paul,
      Great to hear from you – I hope you are doing well! When you have a trading system that really suits you you you will don’t it very easy and natural to follow the system’s signals. A trading system that fits you gives you enough activity to keep you focused on doing it well, but not so much that it feels frantic… it will have a profile of wins and losses that fees comfortable to you – some people like lots of small wins and the occasional large loss while other people like a smaller number of large wins and many small losses… the hold time will also feel natural – some people start getting impatient to close out a trade after 2-3 days while others are comfortable sitting in a long trend for months.

      There are other factors but these are some ideas that will help you narrow down the search.

      If you want to find the right system for you, first work through the above issues and narrow it down… once you are clear on that you will be able to select the right system for you.

      Let me know if you need some help and I’ll point you in the right direction… just reply to this comment and let me know where you sit on the timeframe / trade profile / frequency issues and I’ll let you know what systems might work well for you.

      I have systems in The Trading System Collection that will fit most types of traders if you need something to work from just let me know.

      Great question – thank you Paul!

      Adrian

      Reply
  6. Avatar

    I do mostly credit spreads with small gains but occasionaly loose heavy amount when expected price moves on the wrong side. Rolling out most of the times keep my capital blocked and prevent doing regula trades from making any money.

    Reply
    • Adrian Reid

      Hi Bimal,
      Yes credit spreads do have that problem – you need to be very careful of trading strategies that have a very high percentage of winning trades because the winning trades tend to be small and the occasional large loss is usually very large. It is critical that you check the expectancy of the system is positive or you will ultimately be wiped out.

      I would also warn you that if you have an extremely high winning percentage of trades that in the future if your win rate drops, even by a little bit, that your trading system profitability will degrade dramatically.

      I prefer Lower win rate stock trading systems that have larger winning trades than losing trades because I find them more profitable and stable in the long run.

      Let me know if this sparks any additional thoughts or questions for you.

      Adrian

      Reply
  7. Avatar

    You dont have a Amibroker course, do you?

    Reply
    • Adrian Reid

      Hi Anderson,
      I absolutely do – I have not promoted it broadly yet, however I created a course recently called Amibroker Launchpad which consists of >50 tutorial videos to guide you through how to use Amibroker for charting, Amibroker Formula Language, backtesting and managing your trading systems. The course on its own is $497, but is currently offered as an optional extra to my System Trader Launchpad program which you can find out more about here: System Trader Launchpad Link. System Trader Launchpad is $497 and if you want to add Amibroker Launchpad you can do that for just $97 extra on the order form.
      I would be happy to have a quick chat with you to answer any questions if you would like to – just email me and I’ll help you out.
      Hope to hear from you soon… thanks for your great question!
      Adrian

      Reply
  8. Avatar

    Backtesting relies on looking at historical data to see whether a system works in the past and likely to work in the future. However, how people invest in the past may not be how they invest in the future. Furthermore, algotrading is even more prominent now than say, 20 years ago.

    What gives you the confidence that what worked before will still be reliable as we trade into the future?

    Reply
    • Adrian Reid

      Hi Jeremy,
      This is a great question and is an issue for all types of trading (not only for systematic stock trading). Firstly I would say that if a trading idea does not work in a backtest then it will not work in real time trading, so Backtesting absolutely eliminates some of the bad trading strategies that are not profitable.

      The real challenge is when trading systems worked in the past but no longer work moving forward. There are two possible causes of this:
      1. A shift in the market dynamics
      2. A poorly designed system

      I cover both of these issues in The Trader Success System in quite a lot of detail. For the market dynamic changes, this is observable in the backtest if you test correctly… for example a certain type of mean reversion system used to work extremely well in the US but something changed post the 2008 financial crisis and the stats of the system degraded and the shape of the equity curve became less appealing. During testing you need to be mindful of the shape of the equity curve and how the statistics change over time to identify these shifts in your stock trading system’s performance. These changes are visible during Backtesting if you are monitoring for them.

      The second type of issue is when the system is not designed well and ends up curvefit to historical data. When you don’t follow a process like the one I explain in The expert’s Guide To Backtesting (Part of The Trader Success System), curvefitting is an extremely common problem. The solution is to firstly design the system well with robust parameters and simple rules, but then you can also forward test the system on paper for a period rather than immediately trading it with real money. Alternatively saving some recent data to walkforward test the rules on is useful too.

      As a final thought I would also suggest that rather than trading with one system, you instead adopt a portfolio of systems and add to that portfolio over time as you find / design good new systems that work.

      Thanks for the great question!

      Adrian

      Reply
  9. Avatar

    Hi Adrian,

    When you do your robust backtesting, what is the maximum number of parameters that you would optimize at once?

    Reply
    • Adrian Reid

      Hi Michael,
      This is a very important question – well done! I move frequently recommend that you optimize a single parameter at a time so you can really see how stable the parameter value is as you vary it. Optimization is what gets traders into trouble with curve fitting very often so you need to keep it simple. You can’t visualise more than two parameters simultaneously so more than two and you are likely to pick an unsustainable performance peak in the parameter space.

      Given we should be looking for stability more than the best optimized backtest result, I think doing one at a time (maybe two) will keep you out of trouble.

      I also have a more advanced technique for optimizing all parameters simultaneously but it requires a lot of post optimization analysis to find stability in the parameter space before choosing the combination you want to use.
      Adrian

      Reply
    • Adrian Reid

      Hi Michael,
      For just the robustness testing I like to do all of the parameters at once… it is really just a matter of how long the backtest will take. If you are varying all of the trading system parameters +/-20% simultaneously and you have 8-10 parameters in your system it could take a really long time to backtest. In this case just do the most important parameters (the ones you optimized originally during the trading system design)
      Adrian

      Reply
  10. Avatar

    Hi Adrian,
    If you get a trading system that somebody else made and you want to evaluate it. What are some of the things that you might look at?

    Reply
    • Adrian Reid

      Hi Marcel,
      Thanks for your question – this is a really important issue. One of the most important things to realise is that the published system could be curvefit before you even start… so my major focus is backtesting the system to ensure that every rule has a very significant impact on the number of trades generated and the average profit per trade. I also want to check every parameter value is stable, so I would vary each parameter over a broad range to ensure that the system is profitable on more than just the published parameter set. The system should be robust enough to make similarly good returns when you vary all of the parameters +/- 20% or so. Finally another consideration is whether the system edge is stable over time… When you test the stock trading system with a constant position size (to remove the impact of compounding) is the edge stable? When you backtest a trading system like this you want the equity curve to be nice and linear with a constant slope. If the slope is becoming more shallow or turning down then the edge could be decaying.
      I hope this helps – Thanks again for the great trading question.
      Adrian

      Reply
  11. Avatar

    hi Adrian
    When looking to diversify my portfolio is it better to trade a different market or a different type of system? What are the pros and cons for each?
    Pauline

    Reply
    • Adrian Reid

      Hi Pauline,
      Great question – thank you! Both of these are valuable ways to improve your portfolio. I would say that you should ultimately aim to adopt as many different methods of diversification as possible in your portfolio of trading systems. It is often easiest to first diversify to a different type of system in your own market so you don’t have to worry about exchange rate risk or different time zones to begin with, but if you are trading the long side in Australian Stocks and you want some Short exposure then you would probably be better off going to the US Market for shorting because you will get more stocks that are shortable there.
      Do Both 😉
      Adrian

      Reply
  12. Avatar

    Hello Adrian,

    I was listening to your interview on the Better System Trader Podcast and it has provided me with valuable insight in my trading journey to the point that I’ve had to listen to it multiple times now. Thank you for that.

    I remember you said you were against moving average crossover systems, could you elaborate on why? I’ve recently built and started trading one (as my 1st system) to teach me how to trade consistently. I am curious to hear your insights on this.

    My second question is does your coaching provide an emphasis on the psychological or technical side of trading?

    Thank you for your time, I hope to hear from you soon.

    With regards, Malik

    Reply
    • Adrian Reid

      Hi Malik,
      Thank you for your great comment and question! I am glad you found the Podcast with Better System Trader useful. I covered some really important concepts in the podcast which will make a huge difference to your trading.
      On the question of moving average crossover systems, I don’t like pure moving average crossover trading systems because I have found that performance of a chosen parameter set is rarely stable over time. You can optimize a 2 moving average crossover system for one period but the performance could be wildly different in the future. There is a high risk of curvefitting to past behaviour because of this parameter instability and so the systems rarely hold up that well in real time trading.
      In regards to your coaching question, when I work one on one with traders in my Mentoring Program I focus on both the technical and the psychological aspects. I vary the emphasis depending on what the individual most needs to address. This is the beauty of Mentoring – I can see based on our conversations what you need to take a big leap forward in your trading and focus on that so you get the maximum value out of out time together.
      Great questions – send me an email or use the Contact Us form if you would like to talk about next steps for the Mentoring Program.
      Adrian

      Reply
  13. Avatar

    Hi Adrian, what are your thoughts on trading weekly charts? Long trends seems to be less noisy than daily charts.

    X

    João

    Reply
    • Adrian Reid

      Hi Joao,
      I like weekly systems because the return for effort is extremely good… 20-30 minutes a week to make 20% or so per year is pretty solid! The only challenge is finding a weekly system that gives you a good Annual Return / Max Drawdown. Some weekly systems have a lot of ‘give back’ of profits before the exit signal is given at the end of the week.

      We have a great weekly system in The Trader Success System which performs extremely well that I trade with my own capital.

      Weekly trading systems are a fantastic way to trade for lifestyle!

      Adrian

      Reply
  14. Avatar

    Question regarding Amibroker trading system rules and formulas: what are the differences (if any) between backtesting formula and real time trading formula for the same strategy? Do you use different settings in these cases?

    Reply
    • Adrian Reid

      Hi Tosslem,
      When you are using Amibroker, the code for backtesting and the code for signal generation is the same. You can easily generate the signals for tomorrow’s trading by ticking the box “Add Artificial Future Bar To See Tomorrow’s Trade Picks” in the analysis settings as shown in the image below:
      Amibroker Analysis Settings - Add artificial future bar to see tomorrow's trade picks

      Reply
    • Adrian Reid

      Hi Tosslem,

      Another great question – thank you!

      This depends on the style of system. If the system has a one bar delay and enters / exits at the open then there are no differences between the backtest code and the signal generation code. If the system enters on a limit order then you need to run an exploration to find the stocks that meet your setup criteria, rank them and then calculate the limit level… so this is different than the backtest code.

      Adrian

      Reply
  15. Avatar

    How to determine what trading strategy to trade in the particular market situation? What kind of market regime filters or volatility filters do you use for that?

    Reply
    • Adrian Reid

      Hi Tosslem,
      Great question – This is something I do during the trading system design phase. I create the raw system and then test a range of different market regimes to evaluate whether the system performs better under certain market conditions. If it does, and it is worth filtering out the other market conditions, then I add a rule to the system to require the specific conditions on the broader market index in order to generate a buy signal in a stock.

      Market regime filters could be market trend filters (eg. Moving averages), volatility filters (ATR of the index or VIX level / change), or level based (new highest high more recent than new lowest low).

      Adrian

      Reply
    • Adrian Reid

      Hi Tosslem,

      Think about what strategies work well in each market condition and make sure you have a balance of different strategy types to perform well in each different market condition. For example, having a trend following system, mean reversion system and short side system is a really good start.

      For the stock market regime filters you are basically looking to turn the systems on when they are likely to perform well. For example turning a trend following system off during a bear market is a good idea… only activating a long side mean reversion system when the stock is still in an uptrend is also a good idea and avoiding shorting during a bull market. Most of these can be achieved with a moving average filter on the index in the first instance… then brainstorm some other ideas and try to make it better.

      Hope that helps

      Adrian

      Reply
  16. Avatar

    Hello Adrian,
    Hope your well & thanks for the great content.
    New to this in the later stage of my working life. Can your “teachings” be of help to a complete novice?
    Love the fact you dont promise overnight riches!!!

    Reply
    • Adrian Reid

      Hi Tim,

      Thanks for your great question – yes absolutely, I have designed my courses so that they can work for anyone. There is a bit to learn, but assuming you have the desire to succeed (and I know you do) and you are willing to ask questions, you will be fine! The Crypto Success System takes you quickly from complete novice to confident systematic trader in cryptocurrencies. The System Trader Launchpad program does the same for stocks.

      I am looking forward to helping you get started on your systematic trading journey.

      Adrian

      PS. Yes I don’t promise overnight riches… there is work to learn and get moving, but I can certainly tell you it is absolutely worth it!

      Reply
    • Avatar

      Hi Mr. Reid,

      I am a systematic crypto trader and I am very confused about asset allocation. Based on some research, these are the prominent methods other people use on asset allocation: minimum variance, risk parity, mean-variance.

      Do you have a specific recommendation that works best in your experience (for crypto)? Thanks so much.

      Im looking forward to learning from you.

      Reply
      • Adrian Reid

        Hi Robert,

        I would use a more blunt and pragmatic approach than the ones you suggested personally – I look at the correlation of equity curves and optimize the capital allocation to give me the best combined equity curve. To do this I backtest all of my systems, export the equity curves to excel and combine them with formulas that allow me to change the capital weighting and adjust the weightings to give me the best combined portfolio equity curve that also meets my drawdown tolerance and any other objectives I set for my portfolio.

        Adrian

        Reply
  17. Avatar

    Hi Adrian, I’m a student and a system trader from Vietnam, I admire what you’ve done and what you are doing, I hope you will have more content to support Newbies in this field like me. I want to say thank you. Hopefully 20 years from now I can be a different version of you and share this with others. Peace and love!

    Reply
    • Adrian Reid

      Hi Anh,
      Thank you so much for reading my website, it is a pleasure to help you with your trading. I will continue to make new resources and write articles to help with your trading, so please check back regularly. Please share any content you find useful on social media to help spread the word!
      Remember – You’re only one system away!
      Adrian

      Reply
  18. Avatar

    Hi Adrian, I came across you on Desire to Trade podcast. Quite a few other traders interviewed highlight that systems should be able to work across most markets rather than only working in one area. On this basis is there any reasons why the strategies you use would not work on FX, stock index’s, Commodities etc? Thanks

    Reply
    • Adrian Reid

      Hi Justin,

      Thanks for watching! I really enjoyed being on the Desire to Trade podcast. In my experience I have seen that different markets do tend to behave quite differently and so the best trading systems for each market can be quite different. What I do like to see is that the system works well on related markets. For example if a system works on Australian stocks, it should also work well on Canadian stocks because the markets move in a similar fashion… however the Hong Kong market moves quite differently so my Hong Kong systems are different than my Australian systems. This is just like in commodities – I don’t think it is reasonable for a Lean Hogs system to work as well on Gold or Soybeans… Hopefully it does not loose too much money but when you move a system to a different market it often requires some adaptation.

      Some strategies may translate well to other markets but I don’t think this is always the case and I do not believe it is required.

      Hope that helps

      Adrian

      Reply
  19. Avatar

    Hi Adrian, I came across you on a podcast. Given the systemic nature of your trading, I just wanted to know whether your strategies would work on other markets i.e FX, stock indexs, commodities etc. The impression I get is that broadly speaking trading of this nature should work across the board but as you just focus on stocks I wondered whether there was a reason for that. thanks in advance.

    Reply
    • Adrian Reid

      Hi Justin,

      Thank you for your great question. Systematic trading certainly works across all markets, however the individual strategy may not translate to other markets for a variety of reasons. It is not essential that a stock trading strategy work well on Forex for example in order for it to be considered a good strategy because the markets are quite different and do tend to move differently. What I would say though is if you have a good stock trading strategy it could be adapted to work on other markets in many cases… but this does take some effort and may not always be successful. I focus on stocks on my channel and in my courses because that is my area of greatest experience. Though I am supportive of diversifying across multiple asset classes and that is something that I do in my own trading.
      I hope that helps, let me know if you have any additional questions.

      Adrian

      Reply
  20. Avatar

    Hello Adrian,

    I currently use a system in Amibroker that uses EOD data but I would like to back test some day trading ideas on a 10 min chart, doesn’t need to be real time.

    Does your Amibroker class cover where to get intraday data and how to set up the database?

    Reply
    • Adrian Reid

      Hi Travis,
      I don’t have a lesson on intraday database setup exactly, but I do have a variety of intraday databases in my Amibroker so I am sure I can help you get the issue resolved once you select a data vendor. All I would say about the data vendor is you want a good quality one and not try to skimp on free data – too much can go wrong. I don’t have a recommendation for intraday stock data as I don’t use it, but for Crypto we have hourly data that comes direct from the exchanges. Maybe email me and we can discuss further.
      Adrian

      Reply
  21. Avatar

    Hello Adrian,
    Yesterday I spoke with some of my friends who work in the financial industry as quantitative analysts and they told me that it is almost impossible to develop robust and reliable strategies and be a successful retail trader. I’m really passionate about trading and all the complexities that come with it, but I have serious doubts if I can do it alone. I would like to know what you think about it

    Reply
    • Adrian Reid

      Hi Israel,
      I would translate what your friends said to mean “It is hard and most people fail”… this is true, most traders who try to develop their own strategies from scratch end up with garbage that doesn’t work in real time trading because they don’t know what they are doing. Just like if I tried to perform brain surgery the chances are the patient would not do so well 😉 However if I went to medical school, trained as a doctor and then specialised in brain surgery and trained at that then I would know how to do it.

      The trap is that people think trading is easy because it is easy to open an account and start trading. However the truth is the barriers to entry are low, but the barriers to success are high. This can be overcome with the right training and guidance – traders on their own will fail more often than not, but I have trained many traders and seen them succeed, and I have done it myself, so I know it can be done.

      The Trader Success System is a step by step mentoring program that takes you from Launch all the way to Mastery and provides you with proven systems to work with… it takes work, but it is a proven path to mastery of systematic trading.

      I would also suggest that most retail traders try to trade too short term – intraday trading is HARD and the competition is HUGE. I don’t play that game… go a little longer term in your systems and it gets much easier to win.

      Adrian

      Reply
  22. Avatar

    Hey Adrian,
    Long time no see.
    I am attending the free webinar accelerator and trying to do the task for day 1.
    But i am confused with the calculator and how to use it, like, how do I know my winners?
    Thank you,

    Reply
    • Adrian Reid

      Hi Juan,
      Great to see you on the session today! The values you need to input into the expectancy calculator are in the members area under day 1 Resources. I will message you the details to login privately.
      Adrian

      Reply
  23. Avatar

    Hey there! I listened to you on better systems trader and I have a questions about backtesting and spread when your looking at different pairs. Since you can’t download tick data from the usual vendors how do you incorporate spread into your backtests for the liquid pairs you trade?

    Thank you

    Reply
    • Adrian Reid

      Hi Rhyannon,
      As you have observed this is difficult to do exactly, but my usual approach for spread and commissions is to look at the markets we are trading and understand the typical cost of trading those markets (spread plus commission). Then I build that into the backtest so the statistics include allowance for the slippage / commission that we are likely to incur in reality. Then I adjust this over time as I have empirical observations from my own account if necessary.
      Adrian

      Reply
  24. Avatar

    Is Natalie Gonzalez (@nataliegonzal91 on Twitter) a representative of your company?
    This person is on Twitter and I’m wondering if she is working for you or a scammer?

    Reply
    • Adrian Reid

      Hi James,
      That person has nothing to do with me or Enlightened Stock Trading – she is a scammer. Please report and block the profile and I will do the same.

      Thank you for bringing this to my attention.

      If you would like to have a chat about your trading you can reach out to me via email and I’ll help you out.

      Adrian

      Reply
  25. Avatar

    Hello there

    im new to trading and learning different position sizing methods, and i cant seem to rap my head around the calculation of the volatility based position method, it seems that it calculates more shares then you can actually buy based on the equity provided in the calculation

    ex)
    SOUN = $4.4
    equity = 900
    risk = 2%
    atr(20) = 0.44

    equity * risk = 18 / 0.44 = 40.9 is this correct, am i doing something for caluclating the amount of shares to buy, thanks

    Reply
    • Adrian Reid

      Hi Bob,
      Your calculation is correct – if you were doing volatility based position sizing and you wanted to equate 1xATR to 2% of your equity then in this case you will end up with a very big position size relative to your equity. The issue here is your position size assumption (1 ATR equals 2% of equity) is really aggressive.
      I would much rather see something like 1 ATR equals 0.5% or 0.25% of equity to diversify properly and manage your risk.
      Adrian

      Reply

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