Interview with Rob Hanna - Better System Trader

Rob Hanna has been a full-time market professional since 2001.

He first began publishing his market views and research in 2003. From 2003 to 2007 his column “Rob Hanna’s Putting It All Together” could be found twice a week on TradingMarkets.com. In 2008 Rob began Quantifiable Edges and in 2012 Rob opened his 2^nd website, Overnight Edges. Overnight Edges is now part of the new InvestiQuant site. Both sites use historical analysis to assess current market action and odds. Rob utilizes price action, volume, breadth, sentiment, seasonality, liquidity flows and more to conduct his research.

In 2010, Rob published his book ‘The Quantifiable Edges Guide to Fed Days” receiving high acclaim from many in the industry.

His work has been widely referenced and quoted over the years, and is often linked to in blogs, tweets, Stocktwits messages, magazine articles, books and more. He has also served as a guest speaker at a number of speaking engagements.

In todays chat we discuss how he comes up with so many trading ideas, the type of market behaviours to look out for and his favourite piece of information in a backtest report (clue: it’s not a number). He also discusses how a confluence of ideas can improve trading results, how to look at market behaviour from different angles, some simple market timing techniques, adjusting strategies based on market conditions plus loads of ideas we can test ourselves.

Make little observations about what the market is doing, you’ll come up with lots of ideas- Rob Hanna

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Topics discussed

Where to find trading ideas
The types of market behaviour to look for and what to ignore
The most important piece of information in a backtest – it’s not a number!
How to handle an edge that is performing poorly
How a confluence of ideas can improve trading results
Looking at market behaviour from different angles
Simple market timing techniques
Where to find the biggest edges
Adjusting strategies based on market conditions
How Fed meeting days impact the market and how it can be traded
PLUS loads of ideas to test!

Resources mentioned in this episode

To learn more about Rob and his work, checkout his websites:
You can catch him on Twitter @quantedges, @overnightedges or by email [email protected] or [email protected]
Recommended Books:

NOTE: You can get “The Daily Trading Coach” or “Market Wizards” as a FREE audiobook here

Other resources mentioned in the interview:

Shorting on Extremes
We test the ‘Shorting on Extremes’ study Rob mentions in the chat

Overnight Edges video comparing SPY performance during the day session vs overnight
http://www.youtube.com/watch?v=qevQhWaHAtg

A webinar Rob presented to the MTA
http://media.mta.org/videos/2013/educational-web-series/rob-hanna/rob-hanna.html

Quotes

Too many people just trade what they believe rather than understanding what the edge is.

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I believe the money I make in the markets is really made the days/weeks/months before. It is the preparation for the trades.

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If you are unprepared or you are trying to react to the market as things are happening, it’s very difficult to beat out everyone else on Wall Street

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If you have a plan and you are prepared then you are just so much better off.

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Top tips from this episode

Making little observations about the market can give you ideas to test. You can learn alot from simple ideas.
When looking for ideas, pay attention to extremes in the market action, they’re normally going to have more extreme edges
Looking at the market from different angles, like price action, internals and seasonality, and combining studies into an ‘ensemble system’ you can be better off than just following a singular system
The money that we make in the markets is really made in the research and preparation completed days/weeks/months before we enter the markets, it’s very difficult to beat Wall Street if you’re unprepared.