Breaking Away from Trading for an Average

Breaking away from trading for an average

It’s time for you to do some re-thinking and remixing with the method I have dubbed “Fast Ed.”

Often the goal of traditional trading and system development is based on what I will call investment grade systems - in other words a system that is regarded as carrying a minimal risk to investors.

For me however, what I am doing and tutoring some subscribers to do is change this goal to making it a rich grade.

In the 1990’s it all came together with TS’s EasyLanguage® and brokers needing products to sell just like their big brothers on Wall Street. Since that point in early 90’s every system developer worth his weight in advertising dollars has barracked for the robust, fewer degrees of freedom and the more generically applied in terms of markets and bar sizes as the standard.

But the Future’s industry was and has always been about getting rich, about making big money in a hurry. So in the late 90’s came all the money and risk management formulas, which is all good stuff and works for reasonable returns compared the buy and hold S&P. And we have all seen these worthwhile systems, methods and portfolio management plans which are very traditional and do make money over the long term for those investment grade capital type accounts. I do that for Contrary Thinker's capital manger subscribers and my own serious money accounts. However, I heard nothing about it making fortunes which is the goal of rich grade systems.

What I am talking about here is making myself rich trading futures, it is my strength, and that is even truer on the short side of the market. For you Casino gamblers, I am the guy that plays “don’t pass” line with a method and walk away 7 out of ten visits a winner. The gamblers at the table, boo hiss me, it’s not about the money, it’s not about the winning at their expense, and it’s about not being a social player, joining in on their runs.

So when I see a system that has a strong bias to act in such a way that can be exploited for richness, this is my drive to get back into the things that got me here to begin with. The last time, in 2008, when I manually traded the bear move, it was too much stress and work.

Further, during my formative years every rich futures trader did it the same way. The trading strategy was the simple part, it was knowing when to trade it was the hard part. In fact, just not when to trade it but bet your competition into the ground with it and scale up you size so that you bets where in the millions.

And when your filter said: PARTY OVER! That was it walk away, take the money diversify and do not trade that same market again with that same system for many months.

Fast-Ed method is all about that and here is what I am working on. It is not so much to prove to myself that the visuals work as a filter, they do and the way I define them as a filter. Rather, it is about being able to show others and let it be automated and mechanical for them.

In other words, they do not have to be a technical market analysis of 30 years’ experience to see the patterns, the strategy will do that for them.

So, the strategy as it stands today (ver2) has consistent long and short trade results going back over 20 years of data. While the profit factor on each side is the same, the net profits are 3 times as large on the short side which is exactly my cup of Joe. Last year, coming out the traditional developer’s closet with it’s new anti-establishment method it traded for a 36k profit. FastEd was turned on June 23, 2014 and turned off in January 2015. Right away I can hear your brains cramping, but that is the idea. I stopped expecting it to work based on observations so I turned it off.

We {Contrary Thinker owners of FastEd and me} are waiting for the stage to be set again, to switch it on and get in there to earn a steak dinner or two.

Here again, thinking outside the box, is the strategy that will be improved to the extent that it will not allow entry orders during months that are preceded by things that foretell of a bad month ahead.

FastEd is at is its best as a bear only agro trader and does not do well in climbing markets so I have developed volatility indicators to help me to trade when the time is right.

So you might think that I should have the code filter out any day when the Contrary Thinker Volt is declining, not to allow trading orders to be generated. That makes sense but not what I want in the code. Rather, I want to trade the entire period OR avoid entire periods using natural calendar demarcations and natural accounting periods.

Essentially, if one of our Contrary Thinker measures of volatility does “such and so “on the last day of the month, FastEd should not look any further and will not trade the following month. If a similar event occurs on the last day of the next month, there is no trading for the following month either.

What I want is for the system to find a condition true or false on the last trading day of the month and allow or prohibit any trade for the new month. This is complicated in that the last day of the month is not always a certain date or day of the week and if the last day of the month is a Monday, I want the logic not to trade also.

From that point it is phenomenological, visually seeing the cues and cutting them in, to see which does the better job. The job is not to end up with some new set of variables to optimize for Contrary Thinker Volt indicators which gives the best back test statistics. Rather we are surgically removing the bad months.