Welcome to The Enlightened Trader Newsletter… Do you ever wonder if there is something better out there in the markets that you are missing?
I was thinking exactly this a couple of weeks ago when I was looking at my current mix of systems and was wondering, ‘what opportunities am I missing that I just haven’t looked at yet?’
This was when it hit me that in Interactive Brokers there is a huge variety of stock markets available for trading, and I am *ONLY* trading ASX, US, TSX and Hong Kong… what about all the others?
Surely there are some great opportunities in the other markets too, right? Maybe even better than what I am already trading!
The trouble is deciding which systems to test in which markets – I have quite a few existing systems and any one of them could be applied to any of those other markets. Now, of course I could grind through the work and apply every system to every market, but I really wanted something more efficient than that.
After pondering this for a while, I realized that there are probably some markets that are great for trend trading, some that are great for rotational trading and some that are great for mean reversion… all I need to do is classify them… then once I know which are the best for say trend trading, I can take all my best trend trading systems and adapt them to just those markets knowing that I am hunting for profits with the right Market / Strategy combination.
So I came up with a plan… which I am part way through executing… and I am really excited about!
Here is my plan:
- Design an ultra-simple trend following system that should be profitable on any market which exhibits good trending behavior on individual stocks.
- Apply this system to every market that I could possibly trade, one at a time, adjusting only the liquidity filter so that the liquidity requirement in each market is equivalent.
- Compare the performance of the system on each market using key performance metrics, equity curve shape and drawdown profile to rank markets in terms of the profitability of trend trading strategies.
- Take the highest profitability markets and adapt / refine my best trend trading systems on these markets.
- Implement new systems and improve my results!
- Repeat steps 1-5 for Mean Reversion trading systems and Rotational trading systems.
Right now, I am somewhere in steps 2/3… I have designed my trading system, applied it to 10 different markets, and produced an article on the EST website sharing the results. I am willing to bet the best market for trend trading historically is not what you expected!
Here is a little teaser from my testing so far:
The worse market for trend trading is probably not one that you are currently trading, so that is good news… the bad news is that the second worst market could well be one you are trading! But the best news is that there are a heap of opportunities that I am in the process of exploring now, and this will explode the number of markets that my Trader Success System students have awesome systems for… and the great thing about that is the more diversification you have, the smoother your account growth will be and the more opportunities you will have!
Have a read of the article here, then if you find it interesting, please share it on social media (maybe in one of those big stock trading groups on Facebook 😉😁), so many more traders can benefit from seeing my work.
If you want to get access to a ready-made portfolio of trading systems for a variety of different strategies / markets / timeframes… and if you want to learn how to test them for yourself and implement them into a portfolio so that you can be a diversified global stock trader (in just 20-30 minutes a day), then fill in an application to join The Trader Success System today, and I will be in touch to let you know if you are a good fit for the program.
Trading Tip of the Week
Too many traders (myself included) get focused on the market(s) that we trade and forget to look further afield for even better opportunities. One of the great things about systematic trading is you don’t have to be a specialist in one market; you can diversify broadly and easily. So my trading tip this week is to really reflect on the markets you are trading now… then ask yourself these questions:
- Do you trade these markets for any strategic reasons?
- Are they the best performing markets for your trading strategies / systems?
- Are you just trading these markets because that is what you have always traded?
- Is it possible that you might be leaving some money on the table by not trading other markets?
This thinking has opened my eyes to a whole world of new possibilities – if that sounds like something you are interested in, apply to join me in The Trader Success System, and I’ll take you on the journey with me!
Student of the Week
This week I want to highlight one of my Trader Success System students for his outstanding work on improving my short side system for Hong Kong stocks. Nicolaus has been working to improve this system and has found a certain type of price action that leads to lower probability trades.
Using the Expert’s Guide to Backtesting process which he learned in The Trader Success System, Nicolaus has developed a simple and robust filter to remove these risky trades from the system. The result is stronger returns and reduced drawdown in backtesting.
Great work Nicolaus – I am looking forward to implementing these changes into my own version of the system!!!
News from EST
Refresh is the name of the game at EST right now… we have just rolled over all of our Crypto Success System students into our brand new learning portal and given them access to:
- 3 new crypto trading systems (bringing the total to 9)
- A dedicated forum for Q&A and support (see ya Facebook, I won’t be missing you)
- A bonus course on how to do everything you need in Amibroker
- AND BEST OF ALL, a refreshed version of all of our existing systems with reduced risk and more stable performance
If you have been sitting on the sidelines of the Crypto market wanting to get in but not knowing how to trade it, where to get the data or what systems to use, The Crypto Success System is exactly what you need – Click here to join The Crypto Success System now!
EST Trading Psychology
Stephanie, our very own Certified High Performance Coach, who specializes in high-performance trading psychology, has been busy preparing to release “The TraderMind High-Performance Coaching Program” (our 12-session Trader Psychology program) and TraderMind Mastery Sessions (one-on-one psychology coaching sessions).
These will be launched and available on our website very shortly, so watch this space. If you really want help NOW with any of your trading psychology challenges, message me the word PSYCHOLOGY, and I’ll get you the details of how TraderMind Mastery Sessions work, and we can get you scheduled.
Finally, we are doing a lot of work tidying up the website and all of our collateral, so you may see a few changes here and there… nothing like a fresh coat of paint and a general tidy up!
On the Home Front
I just booked flights for my son Quin and myself to go to Africa in July to Climb Mt Kilimanjaro – can’t wait for that. There’s nothing like standing at the continent’s highest peak to put everything into perspective!
I realized recently that my head has been a bit noisier than I would like… need some more Zen in my life, so I have planted a new garden and am enjoying trying to make green thumbs out of these black thumbs that I have had my whole life. The veges are growing, so I think I am on the right track.
I hope you are well and you are staying safe in the markets. Feel free to let me know if I can help you with your trading in any way.
Trade safe, and remember you’re only one system away!
Founder – Enlightened Stock Trading