Enlightened Stock Trading

In my article “Backtesting Your Emotions To Build Confidence In Your System“ we have talked about backtesting to build confidence in your trading system. What happens as soon as most traders learn about automated backtesting is they jump to Optimization. Optimization is the act of varying the parameters of your trading system to improve profitability. You can ask questions like “what is the best moving average for my exit?” Or “how many bars should I use for my entry breakout?” With automated backtesting software like Amibroker it is extremely easy to answer questions like this… if you approach it the right way. If you don’t then optimization could prove to be a disaster. Read all about it here: https://lnkd.in/gZs3WkPp #enlightenedstocktrading #learnstocktrading #stockmarket

Every great trader knows: optimization is key to maximizing your results! In this video, I break down why refining your trading system is crucial and how it can skyrocket your success. Don’t leave your profits to chance—fine-tune your strategy today! Remember, you're only one system away from transforming your trading journey. 💡 #SystematicTrading #TradingSuccess #TradingTips #OptimizeYourStrategy #EnlightenedStockTrading #TradingSystems

"The Trader Success System has changed the way I trade forever. I've gone from uncertainty and frustration to clear, confident trading decisions every day. It’s not just theory—it's a complete, practical approach that works." - Wayne M. Ready to trade with confidence like Wayne? Visit my website to learn more: https://lnkd.in/g7hTXZv5 #TradingSuccess #SystematicTrading #StockMarketSuccess #ConfidentTrader #TraderJourney

𝐖𝐡𝐚𝐭 𝐀𝐫𝐞 𝐓𝐡𝐞 𝐑𝐞𝐚𝐬𝐨𝐧𝐬 𝐈 𝐒𝐡𝐨𝐮𝐥𝐝 𝐎𝐩𝐭𝐢𝐦𝐢𝐳𝐞 𝐌𝐲 𝐒𝐲𝐬𝐭𝐞𝐦𝐬 𝐁𝐞𝐟𝐨𝐫𝐞 𝐈 𝐓𝐫𝐚𝐝𝐞 𝐓𝐡𝐞𝐦? The purpose is to make sure that the system is yours, that you understand the rules, and you know why the parameter values are chosen where they are. You’ve satisfied yourself that that’s okay. You like the performance, all of these things. It’s sort of the handoff from me to you and taking ownership and responsibility is, “Yes, this is my system.” Your system now, and you like those parameter values. The purpose is not necessarily to try and make the system a whole lot better. You may be able to, but it’s mostly about building confidence. Then the question of compounding backtests for optimisation versus unconstrained capital backtest for optimisation. What I do is I optimise the whole system on compounding, so one parameter at a time, and if I’m pretty comfortable and confident in that, as in there are lots of trades, I don’t feel like there’s much risk of curve fitting, that’s all I’ll do. Then, I’ll do an unconstrained capital backtest to check its stability over time. Just one backtest, not an optimisation, because of what we want to see. For example, when we do the unconstrained capital optimisation, we want to see that the equity curve is nice and straight, and it’s not doing something different, where it’s decaying. We’re looking for this sort of behaviour on the unconstrained capital backtest. Sometimes you need to optimise on the unconstrained, but generally, not. So I’m going to suggest that you go through it as I’ve said, optimise on the compounding backtest, do the one backtest on the unconstrained, check its stability, and share the results in one of these sessions. If we need to do anything different, we can discuss it at the time. #enlightenedstocktrading #learnstocktrading #stockmarket

Quite a technical book that went a long way towards shaping my approach to trading system development and optimization. If you want to learn more about backtesting, optimization and quantitative trading strategies, this is the book you need. Get a copy of the book here: https://amzn.to/3GkKyaV #enlightenedstocktrading #learnstocktrading #stockmarket

I am hearing from more and more traders who are disillusioned, frustrated, or on the verge of giving up recently. This is not surprising because, to be honest, the stock markets have been pretty tough recently. This all comes from our conditioning in other areas of life that tell us if we put in the work, we *should* get paid. We are following the rules to our trading system; we *should* be making money. When the market does not deliver to these expectations, we get frustrated and disillusioned and start wondering if we are doing the right things. The trouble is trading your own capital is not a job, and it is not like anything else we do in life. The markets constantly test us, attempt to shake us out and change over time - testing our resolve and confidence. THIS IS WHY TRADING IS HARD, AND SO FEW ULTIMATELY MAKE IT! Most traders evaluate their performance by looking at their account balance - "I made money today so I am a good trader" or, "I lost money today so I am a bad trader". This is a destructive way to evaluate your trading because the markets will wear you down and spit you out if all you do is think about the money. The kicker is, that you may have to wait longer than you would like for your account to reflect the fact that you are trading well... That is the market testing you! If you don't currently have a portfolio of diversified positive expectancy systems traded with defined capital allocations and tight risk control, which are automated to remove as much emotion as possible, then maybe it is time you bit the bullet and joined The Trader Success System so you can finally get your trading on the path to success. To wrap up this week's trading tip, I want to leave you with this one thought: Good times create weak traders... hard times create strong traders If you can just stay in the game, learn the lessons, and keep your account (and your dreams) alive, then your future self will be a dramatically stronger trader as a result of the difficult times. Hang in there - It is worth it!

I am hearing from more and more traders who are disillusioned, frustrated, or on the verge of giving up recently. This is not surprising because, to be honest, the stock markets have been pretty challenging recently. I am hearing more and more traders say things like, "I need to see a new equity high", "It would be nice to make some money for a change", or "I am just not sure trading is worth the effort with the markets the way they are". These are all signs that many are being worn down by the indecisive and now adverse market action. This all comes from our conditioning in other areas of life that tell us if we put in the work, we *should* get paid. We are following the rules of our trading system; we *should* be making money. When the market does not meet these expectations, we get frustrated and disillusioned and wonder if we are doing the right things. The trouble is trading your capital is not a job, and it is not like anything else we do in life. The markets constantly test us, attempt to shake us out and change over time - testing our resolve and confidence. THIS IS WHY TRADING IS HARD, AND SO FEW ULTIMATELY MAKE IT! The challenge for traders is the reward for our efforts does not come immediately as a result of our actions. This is because the markets will do what they will do. Our trading systems will respond to those conditions but will not make money in every market condition. Sometimes, they experience drawdown, volatility, and whipsaws, which is normal. Still, it is frustrating as hell if you fight it or resist the reality that your daily trading efforts are not immediately and directly connected to your trading activity! So, how do you get past this? After more than 20 years in the markets (and having been through several challenging times in my own trading), I find that the best way to deal with this is twofold: 𝗚𝗲𝘁 𝗖𝘂𝗿𝗶𝗼𝘂𝘀 𝗔𝗯𝗼𝘂𝘁 𝗪𝗵𝗮𝘁 𝗶𝘀 𝗛𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴: One of the most potent psychological traits traders can have is curiosity. When something happens like a tough market, I suggest you use it as a trigger to get more curious, do more research, look at more charts, backtest more ideas, and investigate what is happening. I have had some of my best trading ideas when the markets have been tough, and this year is no exception! Dig in and learn research, read, speak with other traders and find working things. Find the gaps in your portfolio of systems and close them. Curiosity is powerful - turn your frustration to curiosity and watch how your mindset, anxiety and level of patience improve. To wrap up this week's trading tip, I want to leave you with this one thought: Good times create weak traders... hard times create strong traders. If you can just stay in the game, learn the lessons, and keep your account (and your dreams) alive, then your future self will be a dramatically stronger trader due to the difficult times. Hang in there - It is worth it!

Performing trading system development the right way is critical to the profitability of your trading system. The correct process will yield a more robust and profitable system far more quickly and effectively than the alternative. The process for developing a robust trading system is the same regardless of whether you are going to use it for stock trading, futures trading or forex trading. Many new traders focus on the stock market first, but the process can be applied to futures and forex as well. To learn more, read all about it here: https://lnkd.in/gjK6CYFV #enlightenedstocktrading #learnstocktrading #stockmarket

Want to create your own profitable trading system but don’t know where to start? Check out this video where I share the exact steps to generate trading system ideas that are aligned with your goals and risk profile. Stop guessing and start trading systematically with confidence! It's all about removing the emotion and letting a proven process guide you. Watch now and take the first step toward transforming your trading approach. #SystemTrading #StockMarket #TradingSystems #CryptoTrading #WealthBuilding #EnlightenedStockTrading #TradeSmart

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