How Systematic Trading Helped Me Escape Corporate Stress | Interview with Adrian on the Trading Ascension Podcast

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Recently, I sat down with Jason from the Trading Ascension Podcast to talk about my journey from a high-stress corporate job to a life of freedom, consistency, and financial control through systematic trading.

It’s a story that resonates with many traders—working hard in a demanding career, trying to build wealth on the side, but feeling stuck, inconsistent, or unsure of what’s really working. I shared how I turned things around with objective, rules-based trading systems and how you can do the same.

Key Trading Lessons from the Interview

1. Systematic Trading Is the Key to Consistency
• A systematic approach removes emotions and guesswork by following clear, objective rules.
• For example: “If A, B, and C are true, you buy; if D or E happens, you sell.” The rules are absolute—no subjectivity, no gut decisions.
• This clarity allows you to backtest your rules, so you know they work before you risk your money. It’s the most reliable way to trade with confidence.
2. How It Started: A Stock Market Game Sparked My Fascination
• My first taste of trading came from a stock market board game I played as a kid. It was dynamic, fast-paced, and exciting, and I was hooked.
• Years later, when I entered the workforce, I realized I didn’t want to be trapped in a corporate career forever.
• My dad’s advice? “Learn to invest and make your money work for you.” That led me back to the stock market, but like most beginners, I struggled until I found systematic trading.
3. Why I Quit Corporate Life
• I spent years working 12–14-hour days in corporate finance. The stress was enormous, and my health, family life, and happiness were suffering.
• But something happened: in one particularly brutal year, my trading made more money than my job—and I did it in 20–30 minutes a day.
• That was the tipping point. I realized I didn’t need to sacrifice my life to make money. I quit my job, never looked back, and have been trading full-time ever since.
4. Trading Success Comes Down to Rules, Not Gut Instinct
• Anyone can learn to trade systematically. It’s not about gut feelings or instincts—it’s about logic, rules, and testing.
• If you’re analytical, comfortable with numbers, and driven to succeed, systematic trading is perfect for you.
• But there’s one catch: you need to have a burning desire to succeed. A casual “I should probably learn to trade” mindset isn’t enough.
5. “Money Is Just an Idea”—Your Mindset Matters
• I shared my perspective that money is just an idea. How you think and talk about money influences your decisions and your success as a trader.
• If you let short-term fears or bad habits drive your actions, you’ll stay stuck. A clear, systematic process—combined with the right mindset—can change everything.
6. Systematic Trading Saves Time While Delivering Results
• One of the biggest myths in trading is that success takes hours every day. The truth? If you have a good system, you can manage your trading in 20–30 minutes a day.
• This makes systematic trading perfect for busy professionals looking to build wealth without sacrificing their time or sanity.
7. The Core Formula for Trading Success
• Success comes from mastering these three areas:
• Systemize Your Trading – Eliminate emotional decisions with proven, rule-based systems.
• Protect Your Capital – Manage risk to survive market downturns and keep your confidence intact.
• Diversify Your Systems – Trade multiple strategies across different markets to thrive in all conditions.
8. Trading Systems Must Align With YOU
• Your trading system needs to match your personality, goals, and lifestyle. If it doesn’t, you’ll constantly second-guess yourself, lose confidence, and make costly mistakes.

10 Quotes from the Interview

Final Thoughts

Systematic trading changed my life. It allowed me to walk away from a demanding corporate career, reclaim my time, and achieve consistent profits without stress or uncertainty.

If you’re tired of emotional decisions, inconsistent results, or feeling like trading success is out of reach, know this: there is a proven path, and it starts with systems.

You don’t need to spend hours glued to the screen or live with crippling stress. You just need a system that works and the discipline to follow it.

If this resonates with you, let’s talk more about how you can get started – Apply for The Trader Success System and then we can schedule a call to discuss whether you are a good fit for the program.

Remember—You are only one trading system away!

— Adrian
Founder, Enlightened Stock Trading

Full Transcript of the Trading Interview

Jason: [00:00:00] Are you dreaming of the lifestyle that comes with successful trading? Well, it’s time to make it a reality. Welcome to the Trading Ascension podcast where you can discover methods to improve your trading results by focusing on your trading psychology. I’m Jason E, your guide on this path to trading improvement, self discovery, and self mastery.

[00:00:20] Together, we’ll explore the personal and spiritual growth journey of profitable day trading. Prepare to unlock the secrets of the trader’s mind and align your inner self with your personal success. Listen to this episode if you want to ascend to new levels of trading excellence and personal development.

This is Trading Ascension, [00:00:40] supporting your journey to mastering trading psychology and personal growth for consistent profits. Let’s elevate your trading and your consciousness. Starting.

[00:01:00] Hello, Trading Ascension listeners and today’s episode. We have a special guest to speak with. I’d like to introduce you all to Adrian Reed, the founder of Enlightened Stock Trader. Adrian was born in Sydney, Australia, now resides in a beach town a few hours outside of town. He’s coming to us today with 25 years of experience and a [00:01:20] decade of mentoring traders.

He has been a successful systems trader for over 20 years and now operates a fully automated portfolio of trading systems, which covers multiple strategies, numerous markets, and also multiple timeframes within those markets. Uh, I’m excited to speak with Adrian today, um, as his business, the [00:01:40] Enlightened Trader focuses on educating and supporting traders on their journey to profitable systems tradings.

So to vet my guests and ensure I’m bringing the best value and information to you all, I asked the potential guests. What is the foundation of their business? And it’s a great question because you’d be amazed how many conversations kind of end [00:02:00] with that question. Uh, some of the big YouTubers you all watch, they probably don’t know the answer and they haven’t been able to answer that question.

Uh, but what I discovered when I asked Adrian his question is that, um, and you all learned this as well, is that his teachings and mentorship, they provide, uh, the importance of systematic trading. [00:02:20] Embracing a rule based, data driven approach that helps traders eliminate emotional reactions, stay consistent, and achieve greater confidence and stability in their results.

Now, this is achieved by applying proven, objective rules instead of relying on gut feelings or market noise. The result from this is The [00:02:40] great thing about this is traders can manage risk effectively. They can streamline decision making and often they can do that in 20 to 30 minutes a day. So that sounds amazing.

So the principles are really universal. And I think it’s going to apply to a lot of the listeners out there. It supports traders in all [00:03:00] levels of building and helps them grow their discipline, a resilient mindset so they can sustain success across all market conditions. Now, I know everyone can really get on board with this.

So if you all could, we’re going to give a warm welcome to Adrian. Welcome to the trading and Ascension podcast. Jason, thanks [00:03:20] so much for having me. This is super cool. I’m excited to be here. Awesome. Thank you for being here. Um, so, you know, leading up to you leaving corporate America in 2012, um, I’d like to hit on a two part question and get us started here.

Um, first, can you tell us about the event leading up to that moment? Um, that you discovered [00:03:40] trading. So kind of that origin story. Um, and then also, um, what was in it that caught your eye at the time? Right. What made you pursue that path?

Adrian Reid: Yeah. So when I, I mean, my first discovery of, of stocks and investing and trading was actually way back.

Uh, you know, I was eight years old. I, uh, um, was at our, my parents holiday place [00:04:00] and we discovered this board game called the stock market game. And, uh, uh, my family and I played this game, which we, we hadn’t come across before and you go around the board and the market goes up and down and you buy and sell stocks and you collect dividends and you make billions of dollars.

It was just fantastic. And I just loved the whole dynamic nature of that. So that was my first introduction to [00:04:20] the markets. And I just, you know, from that point, I was just kind of fascinated. Um, obviously I didn’t start right away. I was only eight, but fast forward a few years when I was just starting work.

Um, it didn’t take me long being in the corporate world to realize I didn’t really want to be in the corporate world for the rest of my life. So, uh, I asked my dad, well, you know, how do I retire early? [00:04:40] And of course he laughed at me because, uh, you know, I’m 20 something wanting to retire already. And, uh, he said, well, if you want to, if you want to retire early, then you’re going to have to learn to invest, make your money work for you so that you don’t have to work for your money.

And, uh, so we started talking about different investments. Um, I didn’t really have the capital for property at the time. I was [00:05:00] interested in the stock market already because of this game. So that was the natural sort of, uh, place. To, uh, to go. And so I started looking into investing in stocks, you know, buying good companies, buying companies with products that I knew and liked.

And, you know, of course all of the usual things happened. I lost money. I didn’t really know what I was doing. I took tips [00:05:20] and they lost money. And, uh, look, there’s a fairly long windy path like what most people have. We can get into it more if you like, but eventually I came across, uh, technical trading and then systematic trading.

And as soon as I went systematic, that’s when everything turned around for me.

Jason: Yeah, that makes a lot of sense there. That’s awesome. So I’m glad you mentioned that [00:05:40] word systematic because I want to touch on that because we use that a lot in this community. But just so we’re on the same page, when you say systematic, can you just define that for us?

Sure.

Adrian Reid: Yeah, absolutely. So what I mean when I say systematic is, um, objective rules based trading. So if A and B and C are true, you buy, if D or E [00:06:00] is true, you sell. So these are rules which are, Absolute and objective. If I have the rules and I look at a chart, I can see that’s a buy and that’s a sell. If you have the same rules, you find exactly the same buy and exactly the same sell.

It’s not subject to discretion, subjectivity, interpretation. They’re um, they’re mathematical [00:06:20] calculations so that Um, you know, I’ve got the same rules. You’ve got the same rules. We both get the same trades. And, uh, by doing that, we make our rules testable. Uh, so we can, um, we can build confidence in them.

I’m sure we’re going to get into a lot of detail around the backtesting and so on, but really that’s what it is. It’s about eliminating all subjectivity. absolute rules that tell you [00:06:40] when to buy and tell you when to sell. Everything is defined by the rules instead of, you know, subjective decisions we might make ourselves.

Jason: Awesome. I love that. It sounds like a great way to kind of battle the emotion. So I just wanted to make sure we got that definition out there, but let me just, just circle back to kind of that, that origin story. Um, you, you talk about leaving corporate America. What was [00:07:00] the, the catalyst for you to say Uh, it’s time to go.

Did you set a goal and you reached it, said, okay, I’m, I’m out, or, um, was it more of the, you know, the silent quit, as they call it, where you’re kind of working on the side before you, you know, you leave the job? What, what led you to leaving corporate America? What did that look like?

Adrian Reid: Yeah, good question. I mean, I, I was trading for a long time before I left the corporate [00:07:20] world and my trading was always, for me, wealth building on the side.

And I had the goal to ultimately trade for a living, trade full time and, uh, and I had that goal for a long time. I mean, the fact of the fact of the matter is in order to leave a very well paying job and support yourself in the same lifestyle through trading, you need a fair bit of [00:07:40] capital. So I was in a, you know, capital building phase for, for quite a few years.

But the last, uh, 12 months that I was working in the corporate world, uh, my job was just. Insane. It was so punishing. I worked probably 12 to 14 hours a day, at least six days a week. Uh, huge [00:08:00] stress, um, didn’t sleep well, um, you know, deadlines from the office and from, from clients that, uh, were just unreasonable.

It was a really, really stressful time for me. Um, and that year, um, so this is 2012, I made about 230, 000 in my day job working 12 to [00:08:20] 14 hours a day, six odd days a week. What industry was that? That was in, uh, in finance. So not, not nothing to do with trading. It was an insurance business, insurance and banking.

Um, so I was in, in, uh, in the corporate finance sort of area doing, uh, you know, business planning budgets, forecasts, tenders, these sorts of things. Um, [00:08:40] something I’d probably rather gouge my eyes out. rather than do now. But, you know, we, we do what we do because, you know, we, we felt it was a good decision at the time, but that year I was also trading and I had been trading for a long time up until then.

And that same year in less than 30 minutes a day, I [00:09:00] made more money in my trading. And so I had this well paying job that was Literally killing me with stress, and I had my trading on the side, and my trading made more money. And so I got to the end of the year, and I said, well, my thinking was, well, I don’t need this anymore.

It’s painful, it’s bad for my health, it’s [00:09:20] bad for my family, I’m not seeing my kids, and I’m not seeing my wife, and, uh, it was, it was time to go. So for me, it was a, um, basically the work, the corporate job got to the point where it just wasn’t tolerable anymore. And uh, I was, I was trying to hold off that point [00:09:40] because you know, the longer you stay in the job, the more money you can build in your trading account, the easier it is, right?

And the more wealthy, you know, at the end of the day you become, but for me that, that year was the final straw. So I just gave my, gave my notice and left and didn’t look back.

Jason: Yeah. Yeah. That’s, that’s awesome. Um, it’s, it’s great to hear, you know, [00:10:00] people are still working to hear that kind of that vision from someone who’s kind of made it to the other side.

You know, you had mentioned kind of being stressed out in corporate America. And I, I’ve asked this question before. I’d love to have your take on it. Um, you’ve been, you know, Coaching, mentoring traders for over a decade here. Do you feel like trading is a calling for the people who have that itch and want to [00:10:20] leave corporate America or just make money on the side?

Or do you think anyone can learn? You could take anyone turtle trader style, teach anyone to learn, or do you think there’s a certain calling or, or something that brings individuals to this industry?

Adrian Reid: Look, I, I, it’s a great question. I think most people can learn. [00:10:40] However, some will find it easier than, than others.

So my approach, for example, I’m purely systematic. I focus fairly heavily on the analytics. Um, someone who is very quantitative, like, you know, good with numbers, comfortable with computers, this sort of thing, can learn my approach pretty, pretty easily. Not, well, I’m not going to say [00:11:00] easily. It’s, I don’t want to understate it.

There’s effort involved, but they can certainly learn my approach and they’ll have a good chance of success. Someone who is not really a numbers person, they’re going to have to try a lot harder, you know, to learn my style. But are there other styles that can work? Yeah, I think so. Um, the difference, the key, I think the key differentiator [00:11:20] between people that make it and learn to trade successfully and people that don’t is really the burning desire, the must, the fascination with the markets.

I have a lot of people that come to me saying, Oh, I should, I feel like I should learn to trade stocks. I should start investing, you know, I’m, you [00:11:40] know, it’s, and a should isn’t enough.

Jason: Yeah.

Adrian Reid: I don’t believe because this is a tough game. It is a competition, you know, where we’re in competition with other people and a lot of, most traders don’t make it.

So if you want to make it, you must succeed. You have to have that. I really, I’ve got to do [00:12:00] this. I want to do this. I’m driven to do this. I’m fascinated by this. And I think people like that, regardless of where they come from, they’re the ones that, that will succeed ultimately. Provided they stay in the game long enough.

To learn the lessons, and that’s probably the biggest key.

Jason: Yeah, yeah, that makes a lot of sense. You know, [00:12:20] what helps individuals stay in the game a long time is when they run across individuals like yourself, who are giving them great information and great resources, and I You know, one of the reasons I do this show is to make sure that people with a great message like yours can be heard, you know, to the corners that they haven’t reached yet.

Because I know you got a lot of people out there that love what you do. When I was digging into [00:12:40] the resources and the information that you have, I came across this article. It had this interesting title of money is just an idea. Um, so this is, this is my takeaway. Then I have a question for you. So it seemed like money is a fundamental idea.

It’s shaped by words and beliefs that we hold about it. Um, and so the blog was emphasizing our language [00:13:00] influences our financial mindset and our trading success. So I want everyone who’s listening, go read it on the website. I’ll, I’ll give you more resources there later on where you can find that. But there were a few things that I’d like to discuss from that article.

Um, and, um, I’ll, I’ll kind of just highlight, um, the blog there. And then Adrian, more specifically, you can talk about [00:13:20] these action steps. And it said, basically, that there’s a compound effect of our language. What does that mean exactly when it comes to the, the compound effect of language? Yeah. I mean, money compounds, right.

Adrian Reid: And, Oh, sorry. [00:13:40] Um, so, so everything, everything compounds either in the right direction or the wrong direction. I, um, I was fortunate enough to come across this book. Oh, a long time ago now called the Slight Edge

Jason: and the

Adrian Reid: Slight Edge, uh, Jeff Olson, I think is the author. [00:14:00] Are you familiar with it?

Jason: Yes.

Adrian Reid: Yeah. And, um, that was fascinating to me because it talks about how all of our decisions, uh, compound either in the right direction or the wrong direction, you know, but each individual decision in itself is fairly inconsequential.

You know, we can sit down, uh, [00:14:20] in the middle of the day and think, okay, I’m hungry. Do I have the apple or the muffin? Right? The muffin’s not gonna kill us. And the apple is not gonna make us healthy. at least not in that one moment. But if we make that same decision over and over again, day after day, day after day, day after day, it has a compounding effect, right?

You know, our health can compound by having [00:14:40] the apple instead of the muffin, or our health can compound in the wrong direction by having the muffin. The words we use, the way we talk about money, the way we think about our finances, The way we, um, we, uh, we treat our financials, our world is the same. Now, if we go through our day thinking, [00:15:00] Oh, I’m so broke.

Oh, I’ve got no money. Oh, I never, uh, I never make any money. Oh, all the trading decisions I make are wrong. Oh, I don’t understand this. Oh, you know, money’s so hard. Oh, I’m so broke. Oh, you know, at the end of the day, how do you feel about money?

Jason: Yeah, pretty bad after all of

Adrian Reid: that. Terrible. But if, if [00:15:20] we reframe our language and we start to say things like, I’m growing my wealth.

I’m learning how to take responsibility for my money. I’m making better and better trading decisions. Um, I can learn this. I’m good with money. [00:15:40] I’m becoming better with money. I understand how it works. You know, at the end of the day, at the end of the week, at the end of the year. You can imagine that the compounding effect on our subconscious is pretty astronomical.

Jason: Yeah, that makes sense.

Adrian Reid: And I don’t believe, well, I believe that [00:16:00] most people are unaware of how much they’re impacting themselves and their future potential by the way they talk to themselves today.

Jason: Yeah. Yeah, that makes a lot of sense there. You know, I love that book. I’ve had in my mind just the idea of the sand on one side of the scale [00:16:20] outweighing the elephant just because every day you’re taking that action to get that.

So I love that. So also in that article, there were some practical steps on how to implement this transition. Um, so I, if I could, I’m just going to mention the four steps that I took away. And then if you could just kind of elaborate on the importance of all steps. Um, for anyone who’s taking notes, I’ll give all four [00:16:40] initially.

The number one was define a wealth language. Number two, reframe negative thoughts. Number three, establish a financial affirmation routine. And then number four was use precise language for strategies. So back at the top, when you say defined a wealth language, like that list of positive words or [00:17:00] what does that mean?

Can you help us out with that?

Adrian Reid: Well, I think the first thing. One thing I have found that many new or aspiring traders struggle with is they don’t understand the language of trading. And so, when they come into the world, everything seems [00:17:20] confusing, everything seems overwhelming. and maybe they bring their language from school or their language from, you know, the university studies and they try and apply it or force fit it.

And that doesn’t necessarily work. You’ve got to learn the language of the environment you’re in so you can succeed in that environment. So part of it [00:17:40] is learning the core language of the and finances and trading and understanding what those words mean. So this is, this is one, one aspect of it. So when there’s a word that you don’t understand, you want to go look that up.

You know, you can go actually [00:18:00] investigate, expand your vocabulary in the area that you want to master because the more you expand your vocabulary in the area that you want to master, The easier it is to learn, the faster you learn, the more you grow. Love that. That’s the first aspect. The second aspect of it is the vocabulary or the words you want to use for yourself, with yourself, [00:18:20] in your head, when you’re having internal dialogue, and also when you’re speaking with your family and your people around you.

And things like, phrases like, Oh, I’m so broke. You know, you never want to, you never want to utter phrases like that. Because all you’re doing is [00:18:40] reaffirming that you’re in a poor financial situation. Regardless of how much money you’ve got, you can reframe it and choose precise language that is positive.

that will help propel you forward. And the power of words is, and particularly the words we use to [00:19:00] ourself is immense, you know, so we’ve really got to observe the language we use and define the language we want to use and cut out the language we don’t. Anything negative, anything that doesn’t bring us towards our goals and aspirations, I would encourage listeners [00:19:20] to really, you know, intentionally cut that out.

And focus on the positive, the growth and, um, and the empowering language around money.

Jason: Yeah, that makes a lot of sense. Which kind of leads into the, the next, uh, step there, which is refrain negative thoughts. What are the action steps one takes to, cause you talked about [00:19:40] expanding the industry language and then honing in on what we should be saying.

But those negative thoughts are lingering. What, what do they do in that situation? How do you kind of counteract that when you’re adding the good? but still, you know, addressing the negative that’s been there before.

Adrian Reid: It’s such a, it’s such a good question and there’s a really, um, [00:20:00] the really tricky thing about this is we often don’t realize what we’re saying to ourself.

We don’t realize what we believe because our beliefs are just what we believe, right? We’ve never really, oftentimes we’ve never articulated them. And One of the exercises I get my, uh, encourage my students to do [00:20:20] is to write down their beliefs and Statements about money and the markets and trading and so if you sit down with a notepad and pen and You write down all of the things you believe about the markets Or all the things you believe about money or all the [00:20:40] things you think about money like write down every money thought you have in a day and Then have a look at that, you know, in the physical world, get out of here, out of your mind into the physical world on a piece of paper, write them all down and then have a look at it.

And [00:21:00] most people will be astounded at how much negativity there is. About how much fear, how much scarcity, how much negativity, how much overwhelm, how much, how many disempowering thoughts and statements there are. And if we can just get those out so [00:21:20] we can look at them objectively, we can disarm them. We can rephrase them, reframe them, you know, instead of saying, I’m so broke, we can say, I’m building my wealth, I’m learning about money.

I’m moving towards my goals. You know, we don’t need to make a, a, [00:21:40] a judgmental statement about where we are today. We can change that to a positive statement about where we’re going, or how we’re moving, or how we’re growing. But we can’t do that unless we’ve actually got them out, got the thoughts out of our head down on paper so we can look at them.

Because when they’re in here, we [00:22:00] don’t really notice. Yeah, we just, they just, they just flow over us and impact the way we act and the way we feel But we don’t get a chance to inspect them critically writing them down does that and When I did it the first time I was frankly shocked at what [00:22:20] came out.

Yeah truly.

Jason: Yeah. And I just kept writing

Adrian Reid: and writing. I did pages and pages. And, uh, yeah, it’s, it’s a very different exercise for me to do now.

Jason: Yeah. I love that. It’s a great exercise. Cause you, it’s one of the only ways you can separate yourself, you know, because when they’re in your head, you are those thoughts, but then when they’re down on paper, you can kind of take a step back and say, wait a second, [00:22:40] you know, absolutely

Adrian Reid: right.

And I look, I think, well, I believe that most people don’t separate themselves from their thoughts. Yeah. Thoughts and us. Thoughts, our brain just creates thoughts. It comes up from our unconscious and they just, it just throws it out there and sees what sticks. It doesn’t mean [00:23:00] it’s real, doesn’t mean it’s us.

And as we become aware of our thoughts and write them down, we can look at them and say, that’s not right. I don’t support that one. I don’t want that one in my life. But, you know, as you say, unless we separate ourselves from our thoughts, we can’t achieve that.

Jason: Yeah, you know, a key point you [00:23:20] made there is just looking at it and saying, I don’t want that in my life, even if it doesn’t have negative connotation.

You know, for me personally, I’ve always prided myself and hung my hat on, I’m a hard worker, I work hard, I bust my tail. But then when I got a little bit older, I’m like, hold on, there’s, there’s easier ways to do this. I don’t know if I want to attach myself to just working hard. Um, so [00:23:40] yeah, I love that. So the next goal there was establishing a financial affirmation routine.

So, uh, are you suggesting there are certain times during the day? Are you saying that pray without ceasing or what’s your approach to step three there?

Adrian Reid: Um, no, I, I, I wouldn’t prescribe something, um, [00:24:00] uh, and say, this is the one way to make that work. I just think having a regular process of affirming what you believe and what you’re going to achieve, what you’re achieving.

I think is powerful. And so, uh, the more, and the more often you revisit those affirmations, the better. I mean, daily, [00:24:20] absolutely multiple times a day better. Um, I think it starts with writing down the core, maybe, maybe five to 10, 15 things that you want to, um, kind of affirm in your life and reading them and saying them out loud so you can hear yourself saying them.

Uh, and doing that on a regular basis. You know, one of the [00:24:40] things that works for me really well is doing the affirmations when I’m doing something physical. So for example, if I go for a run, I will do the affirmations in, in time with my footsteps. And you know, for me, that works for me because it kind of helps really [00:25:00] cement it into my mind that I’m doing this because I’m going, I’m going, I’m going, you know, um, but you know, other people will differ.

I just think have an affirmation process, have them intentionally written down. So that you’re doing the same things and reinforcing the same things over and over. You’ve got to be clear, specific and focused.

Jason: And I

Adrian Reid: think that’s

Jason: the key. [00:25:20] Yeah. And that’s the key. And also the next step. So you say number four is use precise language for strategies.

Um, and then I wrote down like clearly defined trading rules, risk management, um, avoid emotional decision making. Can you just elaborate on a little bit more from what you just said on the precision language and the importance of that?

Adrian Reid: Yes. In, in [00:25:40] many, uh, areas of life, but especially the areas of money and trading, vagueness really hurts, you know, really holds people back.

I had a, um, a session with my mentoring students this week. We’re going through a process where everyone is building their own brand new trading strategy. [00:26:00] Uh, together at the same time, we’re going, we’re stepping through my process and, uh, and we’re all going through those steps, you know, in line with each other, in time with each other.

And one of the steps is to clearly articulate the ideal move that we’re trying to catch in the market with this strategy. And [00:26:20] the difference between those who have got a very clear, crisp explanation of what they’re trying to catch, what they’re trying to achieve in the market, versus those who are still, you know, talking in vague general terms is, um, is quite noticeable.

The ones who have a clear, crisp, uh, articulate, [00:26:40] um, explanation of what they’re trying to do can move so much more quickly. Because even if you look at a chart, you can say, yes, that’s the move I want. That’s not the move I want. Here’s the, here’s an indicator. Here’s a rule that would get me into that remove.

Here’s a rule that would get me out of that move. You can make those sorts of decisions and that sort of progress [00:27:00] much more quickly. But if you don’t have it clearly articulated, then it’s really hard to take those steps because you’ve got ambiguity. You’ve got uncertainty and that holds you back. So, again, I believe that writing things down, looking at them, saying, okay, is that clear?

Can I [00:27:20] improve that? How can I simplify? How can I make that statement more elegant? Um, and, uh, just get the language clear. One of the big complaints of technical traders or people who want to learn technical trading is, Oh, I don’t know how to code, right? And [00:27:40] that, that’s very common. Most people don’t. I wasn’t a coder.

Like I, I, that’s not my background. I learned, but the reason I’m good at it. is because first I get really clear on exactly what I’m trying to achieve. Each rule I know in plain English, this is what it’s got to do. [00:28:00] And then I can very easily translate that to the syntax of the system that I’m, I’m using.

But if you have a real vague concept, Oh, you know, sort of when this happens and it kind of blasts out from here and, you know, does this and that, you can’t code that. And so that [00:28:20] vagueness, that lack of specificity holds you back. Really slows people down.

Jason: Yeah. I, you know, I totally agree. One of the biggest enemies to successful trading that we talk about in our community is ambiguity.

Um, so we, we, we’ve identified that as a foe as well, kind of over here. Um, I want to go down that path a little bit further, but you mentioned something I want to just [00:28:40] go back on, uh, related to the drill that you were doing with your, with your traders. Um, you have a new trade. I’ll give you a scenario here.

They come in. Um, would you suggest that this new trader, Um, they create a strategy, kind of build it from scratch that you were talking about, or they borrow something that’s tested and kind of hone it to work for them. Do you have a an opinion on the direction for a new trader [00:29:00] to go?

Adrian Reid: I absolutely do.

When I first started teaching, my belief was that everyone should have a should, should build a trading strategy that matches their personality, their objectives, their lifestyle, and. I would force the new traders to create their own strategy [00:29:20] to meet all of those things. What I soon realized was that that’s actually a really hard skill, developing a strategy that works.

is an advanced skill. It’s not a beginner skill. So over time I quickly migrated to teaching strategies [00:29:40] that work and having people select from those strategies so that in the beginning they could see, Oh, this is the model. This is a model of a good trend trading strategy. This is the model of a good mean reversion strategy.

This is the model of a good rotational momentum strategy and so on. And so we have, Um, strategies that work that [00:30:00] people can learn, they can test them, they can build confidence in them and they can apply them. Then as they progress to maybe an intermediate level, they can start adjusting and adapting those strategies.

And then as they progress to the mastery level, they can start creating new strategies. So my process now is far, [00:30:20] far easier, far quicker to get people into the market and confident and successful because I provide, in my program I provide more than 20 different strategies, all fully coded, all ready to go so people can learn them very quickly.

But then I teach them to test and build confidence in those strategies, adjust those strategies, and then later on make their own [00:30:40] strategies.

Jason: Yeah. I lo I love that. And I wanna step back ’cause you had mentioned a few things that help match a strategy with the person. I think you said lifestyle. What, what are, what are some of those other things?

If you could just go back a few sentences on what, uh, what really should resonate with a person and their strategy to make sure it’s for them. So I talk about

Adrian Reid: three things, [00:31:00] personality, objectives, lifestyle. Okay. Personality. Uh, is important. Let’s say I’m a, you know, a very considered person. I make decisions slowly.

I don’t, I don’t like a lot of activity. I don’t like to make decisions quickly. If you give me a day trading strategy that requires me to make 30 [00:31:20] trades a day and quick spur of the moment decisions like this, Um, it’s going to cause stress and frustration and I’m going to make mistakes and I’m going to lose money.

But if I’m a, you know, a person who does like a lot of activity, who makes decisions quickly, and you give me a strategy where I have to buy and hold that stock on [00:31:40] average for 6 or 9 months, I’m going to get bored and I’m going to lose interest and therefore I’m going to make mistakes and lose money. So personality is important.

Uh, if you’re trading manually, if you’re automated, it’s a little bit different. It doesn’t matter nearly as much, but when you’re, you’re placing your trades manually and you’re having to go through the process yourself, [00:32:00] you’ve got to make sure it’s something that you can connect with and actually follow through on consistently with discipline.

because discipline is really important for, um, successful trading. If we lose discipline, we make mistakes, mistakes cost us money, make too many mistakes, you end up losing money, even if you’ve got a great strategy.

Jason: Yeah, I love that. Yeah. [00:32:20] I like the breakdown of that, um, with the exact, you know, things to look for, for a match.

I’ve never heard it put that way. Um, you know, we, we mentioned ambiguity. Um, one thing I think is cool is that we, we have a similar perspective on the problems in the industry and the enlightened, you know, stock trader, they solve inconsistency, stress, uncertainty [00:32:40] faced by traders who rely on emotion alone.

Um, and I know that many traders are feeling overwhelmed by market noise. Um, you as well have talked about, you know, they lack confidence in their methods, um, and they struggle to achieve steady results. Um, One thing, you know, I just put this in here and I want to read this to everyone, but you said that your mission is to empower [00:33:00] traders to overcome these challenges by teaching them systematic trading techniques that remove emotional decision making, deliver consistent data driven results, and align with their personal goals and lifestyle.

Now this approach enables them to trade confidently, protect their capital, and build sustainable wealth without the constant worry of losing it [00:33:20] all. Um, so that’s huge, you know. Being on a, on a channel here and engaging with people where we’re talking a lot about trading psychology. I’m sure that sounds like, you know, um, the best thing ever, right?

The, the ice cream and cake. Um, where does the path begin to accomplish that? What are some of the first things a struggling trader needs to do, um, or that you do with them after they reach [00:33:40] out to you to, to get those promised results?

Adrian Reid: The, the first thing is to realize that everything that came before trading for us as humans is probably not going to be helpful for trading.

You know, most of us went to school, many [00:34:00] went to university, studied something else, or at least got a job and had to do certain things in the job. And in those environments where in general we’re trained to be right, you know, we need to get the right answer. We need to. Get it right. We need to avoid mistakes.

We need to not make mistakes because that’s embarrassing. Teacher calls us out. We [00:34:20] need to get good marks, high success rate, because if we do, then we, you know, get the applause at assembly. Uh, and if we don’t, then we never get that recognition. When we go to work, uh, if we do something wrong, you know, we can get scolded by the boss or, you know, lose the job.

All of those things are teaching us that we’ve got to be [00:34:40] right. And in trading, you’ve got to be wrong. And this is, this is really tough because all of a sudden we’re in an environment where we’re going to make a lot of losing trades. because there is no trading strategy that is right 100 percent of the [00:35:00] time.

You might find some that are marketed on the internet, but they’re scams. So we need to learn to be wrong gracefully. We need to learn to take the loss when the loss is signaled. We’re so, you know, most new traders [00:35:20] are driven to hold on to get back to break even if a trade is going against us. because they don’t want to be wrong.

I’ll just wait till it gets back up to break even, then I’ll get out so I don’t have to take a loss. So we have to let go of the need to be right and embrace the uncertainty in the [00:35:40] markets. The best way to do that is to have absolute rules that tell us when to buy and when to sell because the biggest killer is uncertainty and ambiguity.

Should I get out of this trade? It’s gone against me. Should I hold on to it a bit longer? Should I wait till it gets back to break even? That [00:36:00] sort of uncertainty makes successful trading impossible. However, if you have a rule that tells you exactly when to get out, let’s say, take a simple example. Let’s say you buy a stock and your system says, sell if the stock price drops 20 percent below the entry price.[00:36:20]

Okay. When the stock price gets to 19. 95 percent below your entry price, should I sell? No, because it didn’t hit 20%.

Jason: It’s an

Adrian Reid: absolute rule. There’s no need for subjective judgment here [00:36:40] because the rule says 20. So if it goes to 20, then you get out. If it’s at 23 and you’re still not out. Guess what? You’ve made a mistake or the market gaps through your stop and you should get out immediately.

Right? So having objective rules helps [00:37:00] remove the ambiguity and that works on the entry and the exit. So going systematic, which means having a complete set of objective rules that tell you everything you need to do in the market, goes a huge way towards removing the ambiguity from the market. Yeah. [00:37:20] Like I said, like I said, in my first point, you’re going to be wrong.

You’re going to have losing trades, but that’s just part of the game. We have to be willing to take those losses. I have systems that are wrong 70 percent of the time, but when they’re right, they make big profits. And when they’re wrong, they make, they make small losses. So the math works out very favorably, but you’ve got to be [00:37:40] wrong.

You’ve got to be willing to be wrong and take those losses when there’s small losses so that you can succeed ultimately long term.

Jason: Yeah. So even in systematic trading, there’s that, the operator, right. And that, that small percentage of the human error, um, you, you have a trader and let’s say it gets to that 19.

9 and they’re like, all right, I’m going to cut it here. [00:38:00] I’m going to, you know, save the few dollars that before it actually hits the target, then it gaps, you know, back the other direction. And it’s a winning and we all know that story, but how do you, coach traders who even on that small bit of, um, uh, input that they have into a system that they are making emotional decisions [00:38:20] and often the wrong decisions.

Adrian Reid: The, um, the technique I use, I call backtesting your emotions. And, um, so what, what I want my traders to do is to observe that they have an impulse to do something. you know, Oh, the [00:38:40] stock’s fallen. It’s approaching my stop. Uh, I, I should get out before it hits the stop or I entered today and it’s already down right above my stop loss.

Maybe I should cut it because it’s clearly a losing trade. Uh, or on the, on the flip side, I’ve got a [00:39:00] signal to buy a stock. And, Oh, I don’t like the look of that stock. It’s really volatile. It’s gappy. You know, that feels risky. I think I’m going to skip that trade. You know, these are all emotional reactions to something the market or our system is telling us.

My approach is to rather than act on those [00:39:20] emotions, which is almost always destructive. It’s destructive because you’re either going to lose money or you’re going to win doing the wrong thing. And that’s going to reinforce a bad lesson. So it’s almost always destructive. So the first step of backtesting your emotions is first to be aware enough, thus the Enlightened Stock Trading name, be aware [00:39:40] enough to, um, notice that you’re having an emotional reaction to something in the market or in your system.

Then you want to have that trigger curiosity. So that you can dig in and say, okay, what was that? What exactly is the scenario, the situation that’s causing me to have that reaction? [00:40:00] Let’s say it’s the, in the stop loss example, I bought this stock and on day one, it’s already down near my stop loss. I feel like I should exit.

It’s clearly a loser. I just want to say it’s going to keep going. I’ve got to get out. I’ve got to get out. So the reaction or the, the, the, the stimulus is the first [00:40:20] day of trade, the stock was down a certain percentage. I felt like that’s a losing trade. I should exit. right? So then what you can do is convert that observation to a rule and you can say, all right, let’s imagine this was, uh, true for a second.

If the stock was [00:40:40] down that much on day one, I should get out. Let’s convert it to a rule and add that to our system. Add that to our complete strategy. Then we can backtest that rule. We can compare how well the system performs with and without that rule. and see objectively over many years of history, [00:41:00] over many hundreds or thousands of trades, if I’d have followed that rule every time, would I have been better off or worse off?

So rather than having an emotional reaction and acting on it in the market out of some misguided sense of self preservation that was, you know, coming out of our animal instincts from, you know, [00:41:20] evolutionary times, you know, fear and greed and, and fight or flight and all those things. We observe that’s happening, convert it to a rule that we can test so we can look at it objectively.

And one of two things happened, and this is the coolest bit. When you [00:41:40] test these emotional reactions like this, either you observe objectively, Oh, that’s a bad idea. It loses money. And that disarms it and allows you to let go of that emotional reaction and just keep following the rules. So you build more confidence in the rules.

Or, [00:42:00] the emotional reaction you had actually added value. Thank you. which is rare, but it does happen. And if it actually added value and it’s a valuable rule, you can add it to your strategy and that can improve the profitability of your strategy, making you a more successful trader. [00:42:20] So when you take the emotions and you run them through this testing process, you either build more confidence in your existing strategy or you make your strategy better.

There’s no downside. And so this is the most powerful technique. that, that, uh, systematic

Jason: traders can use to become better. [00:42:40] That’s amazing. And so, you know, when I think about thoughts and I oftentimes, you know, see a thought, become aware of it, I chase it to a rabbit hole. And then next thing you know, I’m distracted.

What is your approach to, Getting the data down to where you can reflect on it. You can change the rules. You can backtest it. Um, [00:43:00] just in general with collecting trading data, but also, you know, journaling, what’s your approach to, uh, traders getting data? Should they be doing it after every trade? Should they be reviewing once a week?

Do you have any general guidelines on kind of tracking data and applying the, the system of, uh, backtesting these emotions?

Adrian Reid: Look, I would say in general, all [00:43:20] traders need to journal more than they do. You know, I haven’t, I haven’t met very many traders who journal enough. You know, some are, I’ve met a few who, who, who do do it well, but the more we write down how we’re thinking, how we’re feeling, what we’re reacting to in our journal, the more [00:43:40] data we’re going to have to evaluate our performance and, you know, fodder for testing like we just described.

So I keep, um, my training journal is digital. So I use, um, you know, a program like IE, Microsoft OneNote. I use Evernote or something like that. So I’ve got it on my phone. I’ve got it on my laptop. I’ve got it on my desktop. Basically [00:44:00] anywhere I am, if I have a thought, I can kind of journal about it. And to be honest, a lot of my journaling happens when I’m not in front of the computer for me, because I have these ideas or fears or inspiration and I need to get them down wherever I am.

And so I take them in the moment and I, I take the moment and I [00:44:20] document them. As far as trading, uh, sorry, journaling about individual trades, that should also happen in the moment as much as possible. So for example, if I get a signal that I’m going to buy a stock and I look at the chart and I, you know, have a sense of discomfort about that chart, in the [00:44:40] moment, I will do that.

I will take that time and journal because I want to disarm that discomfort before I put the trade on. And that’s valuable because then I go in, uh, calm, level, confident. Whereas if I didn’t take the time to [00:45:00] understand the feeling that I was having, the emotional reaction I was having, and then maybe test that idea as we discussed earlier, then when I go into the trade, I’m already, you know, nervous about it.

I’m already jumpy. I’m already kind of emotionally uneven and that leads to mistakes.

Jason: Yeah. [00:45:20]

Adrian Reid: So, uh, in the moment is definitely better. Uh, if you could, if you can bring yourself to have a. regular review routine. Like, you know, at the end of the week, you kind of look back over all of your journaling notes and see if there’s any common themes.

That’s also very powerful. Um, you know, that’s, it’s, [00:45:40] it’s a, it’s very much a habit driven, routine driven activity, uh, which I know in, you know, in a, in a busy life, many people struggle with, but I just think the more often you can do it. And the more often you read over your notes and observe how you’ve been reacting and how you’re feeling now.

The better a trader you’re going to become.

Jason: Awesome. [00:46:00] I love that. You know, when you talk about the tracking and, and doing these things, it just makes me think of it’s moving us in a direction. So my next question is kind of about goal setting. Uh, I’ve talked to traders and some say, you know, I never have a number goal.

I go off of a, you know, a feeling which of course, systematically, you don’t want to do that. [00:46:20] Um, what are your, Guidelines for setting goals for a trader, um, not only improvement goals, but maybe monetary or not monetary, just in the, in the realm of goals. What can you tell us about your approach there from your experience?

I,

Adrian Reid: it’s a really good question because it’s challenging. It’s very easy to say, Oh, I want to make X [00:46:40] dollars this year. or in five years time, I want to be making Y dollars a year from my trading. The challenge with that is it depends so much on what the market does. You know, we can have, I have good years and I have less good years.

I’ve had years where I’m up 150%. I’ve had years where I’m down [00:47:00] and If I set a trading goal, it’s purely around money. I may do everything right, follow all of my rules, all of my systems, not make any mistakes. And I still may miss the goal because the market just did what the market does. So I [00:47:20] think while having a monetary goal is valuable as a shining light, I want, you know, I’m aiming to make this sort of return.

Other goals are more important. Process goals, I think, are very powerful in trading and probably more useful. I’m going to follow my [00:47:40] rules every day without mistakes, no exceptions. You know, that is a goal, you can win at that goal every day, regardless of what the market does. Because, and that’s important, because we need to feel like we’re winning.

And [00:48:00] if we have a losing day where we lose money, but we follow our rules. with discipline and we don’t make mistakes, that’s when we really should recognize ourself and reward ourself kind of psychologically for doing a good job as a trader. So I think that process goal of [00:48:20] following my rules, managing my risk according to my risk management rules, managing my capital allocation according to my Capital Allocation Rule, managing my budget outside of trading so that I’ve got money to save, to add to my account, to build it, so I can grow my wealth faster.

Those are all things that are directly in our control. [00:48:40] And they’re really good to have goals around. The money that the market will give us if we follow our rules exactly is more variable. So I’m not in favor of having that as the only goal. I think if we [00:49:00] become a better trader, the money will follow because becoming a better trader involves the discipline, the consistency, the building of good strategies, the improving of our strategies, the adding of money to our account, the management of our budget, that all of these things that are important for us to allow us to build our [00:49:20] wealth.

So yeah, I think a cross section of goals is important and it’s important that we write. Set goals that we can win because otherwise trading becomes very difficult because there’s a lot of negative feedback You know, losing trades down days, for example, I mean, we get a lot of negative feedback [00:49:40] from the markets and we need to be able to say to ourselves and feel like, Oh, I’m doing a good job.

I, I did this today. I did this. Right.

Jason: Yeah. You know that? Yeah, it does. It’s powerful because in that example you gave, like someone who has a losing day, but they stop at a certain point, they can, they followed the rules. They can still feel like a winner, still build [00:50:00] confidence even in the losing of that trade.

Yeah. Oh, 100%. Yeah, absolutely. Yeah. So, in systematic trading on a day to day basis, um, what are the, the, I guess the micro goals for daily, um, maybe P& L? Like, I reach this amount, I stop, or I feel this way, I stop. I reach this lower, you know, negative P& L, I stop. How do [00:50:20] you, how do you guide traders on day to day, like, when to get in and get out of the market?

Because you did mention the 20 to 30 minutes that you, you know, suggest people are in.

Adrian Reid: Yeah, so my, my approach is maybe a little different than, than what many are thinking because I, I’m not a, I don’t classify myself as a day trader because I’m not actively in and out, in and out during the day. [00:50:40] I’m an end of day trader, so I use daily bars and weekly bars even.

Um, and, uh, I’m, I’m applying systems using that, that timeframe. I have some intraday strategies, but they don’t require me to be in and out actively within the one day. I set the [00:51:00] signal. I set the orders up at the start of the day before the market opens, and I’ll just let them run and play out during the day.

So, so my approach, I don’t have a daily P and L. uh, target. I don’t have a daily loss limit, but what I’ll do is I have a broad, a whole range, a whole portfolio of strategies. You [00:51:20] know, some of them are long term trend following, some of the short term mean reversion, some of them are rotational momentum, some of them are long side, some of them are short side.

And I set up my portfolio so I allocate a certain amount of to each of those strategies. And I do that so that [00:51:40] I have the best probability of achieving my financial goals long term by following that mix of strategies. And so, In that way, I’ve done all of the risk management and all of the, um, you know, capital allocations to protect myself up front before I even step into the [00:52:00] market.

So I know because I’ve backtested my strategies over 20 or 30 years. I know how volatile they can get. I know how good or bad a day I could have on each strategy and because of the analysis I’ve done to figure out the weighting of each strategy, I know what the [00:52:20] potential impacts on the portfolio of good days and bad days could be.

And I’ve designed the whole weighting and allocation so I’m comfortable with that. The idea being, I can

Jason: keep trading no matter what. Gotcha. Yeah, that’s amazing. Um, so I, I want to, for everyone who’s listening, [00:52:40] this has been some phenomenal information. So I want to tell you guys where you can find some of this information.

Um, it’s the Enlightened Stock Trader. Now, you can go to the website EnlightenedStockTrading. com, um, there’s a YouTube channel as well under the same name. Uh, Twitter, I guess it’s X now, um, you [00:53:00] can find it there, Facebook as well, Instagram, you can find the Enlightened Stock Trader there as well, um, also LinkedIn, if there’s anyone on LinkedIn, I suggest you connect with me, you can also find the Enlightened Stock Trader there on LinkedIn.

Um, you know, since we’ve made it this far in this extremely special episode, I want to tell you guys about some [00:53:20] free resources that you can get. Um, thank you all for tuning in. So when you go to the enlightenedstocktrading. com, um, there’s a, there’s a link for it, but I’m going to walk you guys through it.

I just did this myself. When you go to the website in the top right corner, This is going to be cool. You’ll love this. You’re going to see free resources. Um, now from there, [00:53:40] um, Adrian offers calls, but I want to mention this. There’s an acceleration bundle, um, and immediately they’re on that page. You’re going to find a few things, all resources.

And, um, there’s a ton of them. I just want to mention a few because I think these were some of the amazing ones. There’s two powerful [00:54:00] trading eBooks that you can get there. Uh, the nine secrets to becoming a profitable global stock trader, how to build unshakable confidence in your stock trading system. I know that resonates with the audience here.

Uh, four, Um, there’s a trading cheat sheet to improve your results fast, uh, keyword fast on that, right? [00:54:20] Uh, daily trading process sheet. Um, I’m a, I’m a fan of sheets, the daily trading, uh, cheat sheet as well. Um, a few other things I want to mention, the trading confidence cheat sheet, right? Who wouldn’t want to grow their confidence as a trader?

Um, and also there are some courses there to deepen your understanding, uh, such as the [00:54:40] Millionaire Code. Um, there’s a trader quiz. Um, I haven’t taken the quiz, but I definitely will after this show. And a other bunch of resources that I didn’t even mention that I think you all gonna love, uh, by going to that website.

Um, anything that I missed, any other promotions you have going on as far as, uh, where these resources. [00:55:00]

Adrian Reid: Yeah, thank you. The best. Uh, and thank you for all of that. That’s, I mean, the, the, I try and put these resources together to help more people succeed, survive and thrive in the markets. And I think that’s really important because too many people are losing money trying to make money.

trying to build their wealth. And you know, we should be doing the opposite. So hopefully these things help. [00:55:20] But if people go to, as you said, enlightenedstocktrading. com forward slash free, um, you can get that, uh, trader acceleration bundle in there. There’s also a complete strategy, a complete system. Uh, so you can have a look at, you know, what does a trading system actually look like if you’ve never done this before?

Um, this is a, a mean reversion [00:55:40] trading system that works for several different markets. Um, I apply it on the Canadian market, interestingly. Um, the key, the, the most important thing there is to see that it’s not super complicated. You know, there’s not hundreds of rules and dozens and dozens of different, uh, inputs and everything.

It’s, it’s simple, clean, [00:56:00] elegant, easy to follow. Now I don’t want people to blindly just apply that system, you know, learn to test it and see for yourself that it works and so on. But, uh, I think it’s really valuable to see what an example, you know, what an example of a trading system looks like.

Jason: Yeah, I think that’s great.

That’s awesome. Thank you for that. Everyone, please go check out those resources. [00:56:20] You will not be disappointed and hopefully it will enhance your journey. Um, so I have three more questions for you. Um, first off, um, we talked a lot about backtesting emotions, anything we missed there or anything that, that would be helpful for, for the listeners, as far as, uh, just that system and your approach.

Adrian Reid: Look, I, I think probably the one thing that we, we [00:56:40] didn’t get into, which we should is what even is backtesting? Yeah, because if someone is a discretionary trader, they might be thinking, Oh, you know, like chart replay, you kind of see how the, um, the indicators play out. And yes, I would have bought there.

And yes, I would have sold there. Um, and you know, someone else might’ve, uh, you know, not even have a, [00:57:00] Comprehension of what backtesting might mean. So I want to define it in my terms, how I think about it, so that people can, um, can, can learn about that. Cause I, I think it’s one of the most powerful tools in our trading tool belt, right?

That’d be great. Yeah. So, so backtesting for me means you, you take your, your [00:57:20] rules, your system rules, which tell you everything that you need to do in the market, when to buy, how much to buy, when to get out if you’re wrong and when to get out if you’re right, the, the trading system rule should be complete.

So we don’t need judgment. to follow them. We don’t need 20 years of experience to follow them. We know by looking at the chart, [00:57:40] that’s a buy, that’s a sell. There’s no debate. Okay. So that’s the starting point. You need a complete system. Then what you want to do is put that system, uh, put that, those trading rules into, uh, some backtesting software.

I use Amibroker. You could also use Realtest. Some people use Ninja Trader. Some people use [00:58:00] TradeStation, which tool is best depends a lot on what style of trading you’re doing. Um, but you put the rules into the trading software and the software will apply those rules to all of the historical data. So I have data going way back.

Actually, I’ve got, uh, for the U S stock market, I have data from 1950 to today, [00:58:20] including all of the delisted stocks, everything that happened. So I can test strategies over a long time or I can test them over the more recent history for more current market action and behavior. But the, the, the software, goes through that, that historical data and finds all of the buys and all of the sells based on [00:58:40] your rules, and then assembles a portfolio and shows you how that portfolio would have performed based on the rules that you’ve specified.

So you can press backtest and, and once you’ve set that up, get a complete report of how that strategy performed. win rate, loss, you know, [00:59:00] percentage of wins, percentage of losers, how big the wins are, how big the losses are, compound annual growth rate, draw down, all the stats. And the great thing about that then is you can vary the rules.

You can optimize the rules, you can add filters, you can simplify them, and you can see the impact of all of those decisions. This is really, [00:59:20] really powerful because one of the things that, um, that I learned early on is that financial data is very noisy. You know, there’s trends in this, there’s real moves you can catch, but there’s also a lot of noise, right?

So we, we need a lot of data to prove that our [00:59:40] rules work. You know, some people will say, Oh, look, just find 30 to 50, uh, signals and see if what the profitability of those signals were average the average them out. And if they were profitable on average, then that strategy is [01:00:00] okay. but I want to tell you that’s nowhere near sufficient to decide whether your strategy is okay.

Because if you got all 50 of those signals that you found manually from a bull market, then they’re probably going to be pretty profitable.

Jason: Right.

Adrian Reid: But you have no idea how [01:00:20] that strategy will perform in a really volatile market or in a strong bear market. However, if we take our rules, put them into the backtesting software, apply them over decades of market history, thousands of stocks, thousands of trades, we get a much richer data set telling us how that strategy performed.

And [01:00:40] that way, we know with confidence, Oh, In a bear market, this is how much the strategy will do. We’re likely to have that much drawdown or we’re likely to have losses that are this big. We get information about how it performed in different market conditions. So that way, when we’re trading in real time, [01:01:00] if that happens in the future, we don’t get shocked by it.

You know, there’s nothing worse than thinking you’ve got a great strategy because you only tested it in a bull market and you go in with high leverage aggressive position sizing and then three months later you’ve gone out the back door and lost everything because it was a bear market and your system exploded.

Yeah. Right. You can avoid that by backtesting [01:01:20] properly. So I think that’s probably the big thing that, you know, I really

Jason: want people to do is learn to backtest properly. That’s awesome. I’m glad you added that on. And so thinking of that, that backtesting, I’m going to add just, just one more to our final two.

Um, you know, it’s, it makes me think about the learning curve, right? You have to have different markets to, to understand, [01:01:40] um, there’s two extremes. There’s the trader who says, Hey Adrian, I’ve been trading for five days. This is not working for me. Then there’s the other person that say, Hey, I’ve been doing this for 10 years.

It’s not working for me. What’s the, uh, what’s the learning curve? When should someone be concerned that they’re doing the wrong things or when should someone be patient that it’s just going to take more time?[01:02:00]

Adrian Reid: Yeah, it’s a good, it’s a good question. Um, when you’re, when you’re learning on your own without direction, it takes a long time. And the reason it takes a long time is because there’s a lot of different styles, a lot of different voices, a lot of different [01:02:20] information. and frequently it conflicts. So learning can be very slow if you’re trying to muddle through and figure it out on your own.

Um, I, I chose systematic trading as my path. It resonated with me and um, I’ve been very successful with it. And for people that want to trade systematically, So, [01:02:40] if you focus purely on that and avoid all the noise, and you have a proven path to follow, it can be quite quick. So, for example, I’ll take a student in to my mentoring program, and in six months, we have them up and running, fully automated with a portfolio of three or more systems that they are [01:03:00] fully confident in.

They’re trading actively, and they’re confident in it, and that can happen in the space of a couple of months. However, you’ve got to identify the path, remove the noise, and do deep learning on that path. When I learned, I started going, Ooh, [01:03:20] stocks and trading. What’s all the things I can learn? Right? And I learned about fundamental analysis and technical analysis and chart reading and support and resistance and price action and, um, options and futures and stocks and forex and like, well, I was like a kid in a candy store.

Jason: Yeah, I get that.

Adrian Reid: But, [01:03:40] but how deep was my learning in any of those things? It was, it was shallow. but when I chose my path and doubled down on that, then things really sped up. And I think this is important. You know, we don’t, you don’t want to try and learn everything [01:04:00] about the markets, at least not early on it.

You’ve got your lifetime to do that. Right. But choosing a, like, let’s say you resonated with systematic trading based on, you know, what we’re saying here today, you know, choose that, go deep and get successful at that. And if someone comes and talks to you about. You know, this stock that’s gonna go to the moon and how [01:04:20] they’ve bought options on it and they’re gonna be rich next week, what do you do?

Nothing. Because that’s not your path. Right? Right.

Jason: Gotta stay on your, your path, . You’ve

Adrian Reid: gotta stay on your, you’ve gotta stay in your lane.

Jason: Yeah.

Adrian Reid: Yeah.

Jason: Because if you

Adrian Reid: start veering all over the road, what’s gonna happen? , you know, you end up hitting something.

Jason: Yeah. [01:04:40] Right. Yeah, that sounds amazing. And that means taking

Adrian Reid: losses.

Jason: Yeah, I love that, that timeframe and kind of the deep dive that you mentioned, which is going to be the, the, the, the factor that determines how long someone is there. Um, I want everyone listening to go check out this website, but I also want to, I want us to keep it real. So I want to, uh, you Adrian, if you could, what is [01:05:00] one quality of a person that maybe, needs to change before they trade or that you’ve seen in your decades of coaching to where maybe they shouldn’t even take that venture of trading on.

Yeah, that’s a good one.

Adrian Reid: There’s probably a few. Um, okay. What’s, what’s [01:05:20] a good one. Um, many people really cling to the need to be right. You know, a lot of, uh, if, if you’re, if you’re ego driven, The trouble is you typically don’t realise you’re ego driven. You know, it’s like, but the [01:05:40] symptoms are. you kind of get into arguments because you want to be right.

And you know, you think everyone else is wrong and your way is the right way and people should do it your way. And you know, those sorts of things. It is in the outside world. Um, if you’re like that and you come to trading, the market is going to teach you some lessons and they’re going to be hard [01:06:00] and the market will keep teaching you those lessons until you get it.

So I would say, um, it’s far better to be humble. and to be, uh, to accept being wrong quickly, because if you cling to being right and you’re actually wrong, what happens? The trade keeps going against you and you [01:06:20] make bigger and bigger losses. And eventually you end up going out the back door. So, um, accept that we’re going to be wrong and be humble and realize we don’t know everything.

The other, the other one, which is so common is people are in a [01:06:40] hurry to get rich quick. And, Oh, this is the one I’m going to go big on this. Well, this is the right strategy. I’m going in with leverage or I’m taking money out of my home mortgage and I’m going to put it into the markets and do this. Yeah, exactly.

Right. That’s my response every time. [01:07:00] But whenever you try and make money fast, there’s a painful lesson coming. Maybe not immediately, but it’s coming. and we need to accept that if, even if we have a good strategy, the market will give us what the market gives us and we can’t force it. [01:07:20] If we go in aggressively because we think we’re right and we think that we can’t lose, or we think we’re not going to lose, that aggressiveness will wipe you out.

And for anyone to be able to be successful longterm in the markets, you need to stay [01:07:40] in the markets. If you wipe yourself out. You can’t, you, you blow up your account. You’re not in the game anymore. You can’t win the game. You know, I can’t remember who it was says, but you know, it was a great trading quote.

There were old traders and there are bold traders, but there are no old bold traders.

Jason: I love that. [01:08:00]

Adrian Reid: And this is, this is absolutely true. I mean, I, I have literally talked to, you know, thousands of, of people who want to make money in the markets who have tried and everything. And. the bold ones, the ones who are aggressive, the ones who are gung ho, who go in big, who wanna, um, you know, make money fast, you know, [01:08:20] inevitably they don’t last long.

They either get humble or they get out. Yeah. Because it’s too painful. The market doesn’t care about your bold ambitions. The market will do what the market does. And, you know, if you’re aggressive, you won’t survive. You’ve got to have conservative position sizing, low leverage, and a good strategy that you [01:08:40] follow consistently.

And if you do that, you might just stay in the game long enough to figure it out.

Jason: That’s a, that’s a great, great, uh, answer to that question. I wanted to do that as kind of a caveat, you know, I don’t want us, anyone accusing us of selling the dream cause everything is sounding so amazing, but to end the show, I would like to sell the dream a little bit.

Um, You know, [01:09:00] we’re, we’re looking at the results of a Adrian Reed Enlightened Stock Trader dominated world. What can someone expect? And again, we’re, it’s, it’s airy fairy, right? We’re painting a dream. Someone joins into your, they learn how to trade. They become a great trader by persevering, um, and following some of the, the tips that you’ve [01:09:20] given them.

What? potentially could their lifestyle look like? Maybe some of the things that you’ve benefited from as being in this industry so long. Can you just paint that vision as we close out today’s episode?

Adrian Reid: Yeah, absolutely. But the first thing, the way, the way I trade, I have a diversified portfolio of strategies that make [01:09:40] money in a variety of different market conditions in a variety of markets.

So when I go to sleep at night, I don’t need to worry about what the US market is going to do overnight. I don’t need to worry about what Bitcoin’s doing. I don’t need to worry about, um, you know, what interest rates are doing. I don’t need to worry about any of those things. [01:10:00] Because I have strategies that make money from a variety of different conditions.

and okay, I’m not going to make money every day or every week or even every month, but the portfolio is set up. So I don’t need to stress about what’s happening in the world. If we have a bull market, I’ll make money. If we have a bear market, I’ll [01:10:20] make money. And right now my trading is fully automated, which means I’ve put the work in upfront to create this portfolio and I’ve automated it.

So the computer runs the trades each day and I’m monitor the trades. So that means it takes a few minutes a day to monitor them and check [01:10:40] everything is going right. And then every now and then, let’s say weekly or monthly, I check in and do a deep dive on my strategies, make sure everything is as it should be.

But I can go to the beach this morning and my computer will place my trades for me. And I can go overseas next week, which I am, and not take a laptop with me because [01:11:00] my Trading is happening in a cloud based computer and it’s just going on and I can check in on my trading on my phone and see how my cloud computer is, uh, is, is working and placing the trades and all of that.

I don’t need to stress about what’s happening in the markets and I think that’s the magic, you know, I know that I’ll [01:11:20] be in this game for decades. longer. Uh, I’ll keep doing this until the day I die. Not because it’s about making money because it’s a bloody good challenge and I really enjoy it. And I like figuring out finding new strategies and I like monitoring existing strategies and I really enjoy observing and saying, Hey, something shifted in the market and this [01:11:40] strategy that was working now, it’s not working.

I’m going to turn that off and I’m going to deploy this one instead. It’s a puzzle.

Jason: Yeah.

Adrian Reid: And if you’re fascinated by that puzzle, And you enjoy the investigation and the thinking. Um, it’s a, it’s a magic way to, to, to build wealth and to, to earn a living. [01:12:00] And it’s really not stressful for me because I’ve done all of the testing.

I’ve dealt with the emotions as we talked about today and others can achieve that as well. I mean, I’ve got students who are at that point, they’re, you know, massively diversified, they’re automated. Um, they’ve got systems that, uh, are running that they have confidence [01:12:20] in. They can make money in up markets and down markets.

And they do it in a couple of minutes a day by monitoring what’s, what’s happening.

Jason: Amazing. And so if that path sounds like the path for you, EnlightenedStockTrading. com. Free resources, please go there. You’ll find links in the show description. You’ll also find a [01:12:40] recap of this show at tradingascension.

com in the blog, where you can see some of the highlights of the amazing information that we received today. Thank you all for listening. And Adrian, thank you for joining me on the Trading in Ascension podcast.

Adrian Reid: Thank you so much. That was a blast. I had a really great time and really honor you for what you’re doing in the trading community.

A [01:13:00] fantastic job and great show. And I really hope that listeners get a lot out of this.

Jason: Thank you for joining me on this episode of the Trading Ascension podcast. I hope you found valuable insights to help you on your day trading journey. If you enjoyed today’s episode, please subscribe to the [01:13:20] podcast and leave a review. Your support by subscribing and leaving reviews helps me reach more traders like you and continue to provide this valuable content.

Don’t forget to head over to the tradingascension. com website for free resources, more tips and exclusive content. If you can’t wait to the next show, check out some of the [01:13:40] previous episodes. They’re great, but do join me on the next episode. And until then keep ascending, stay mindful and remember your journey to mastering trading psychology for consistent profits starts with your willingness to embrace personal [01:14:00] growth.