This is a spin-off of the Sydney Trading Tribe. In the tribe we work on the psychological issues around trading. This meetup is intended to supplement that, with work on the content of people's trading systems. The main focus is on systematic trading systems, but as long as you have a defined process for trading, you may benefit from our meetings. Review and discuss members trading strategies as follows: We will discuss some aspects of systems per the checklist below, or as changed by consensus (please let me know anything I have missed). Our intention is that this will be a rigorous discussion of trading systems.
Any system needs the following elements:
• The markets you trade, the time frames, and the basic trading methodology. Trading strategy elements (hat tip Van Tharp): all specified very clearly. - One or more market filters - Set up conditions - An entry signal - A worst-case stop loss - Re-entry when it is appropriate - Profit-taking exits - Trade size determination, and - You need multiple systems for different market conditions.
• The beliefs that the system reflects
• The edge that the system provides and how you know it exists.
• When you trade including when you will stop trading or have a break from trading
• How the system aligns with your personality, strengths and weaknesses
• What you know about the system's performance including volatility, draw-downs, profitability profile of trades, likely losing runs, how you know you did not over-fit your optimization.
• The data sources you use and how you validate them and correct them.
Processes for modifying the system:
• Processes around trading
• Reviews of trading performance - adherence/violations of system, slippage and costs.
• Record keeping.
• Recording and dealing with feelings about trades and their impact on your actions.
• How the system aligns with your goals and resources including time and energy.
• Management of taxation, legal, public relations and regulatory issues.
• Investor management if managing other people's money. Includes expectation management, criteria for investor selection, rules about withdrawals.