On the show this week we have father and son trading team Jake and Elliott Bernstein from 2chimps.net.
Jake, who was also a guest on Episode 1 of the podcast, is an internationally recognized futures analyst, trader and author who has pioneered numerous technical, cyclical and seasonal methodologies.
He’s written more than 41 books, along with numerous research studies and newsletters on futures trading, stock trading, trader psychology & economic forecasting.
He has appeared frequently on radio and television throughout the United States and Canada, including Wall Street Week and CNBC. He also lectures extensively in the United States, Canada, Europe and Asia.
Elliott has over 15 years of market experience, with a strong focus on emerging sectors, China and APAC region equities, and technical trading methods. With two books and dozens of articles on related topics, he specializes in clear and easy-to-read analyses of timely market questions.
Elliott has travelled and lived abroad extensively, and with nearly a decade spent between Beijing and Shanghai, he is fluent in Mandarin Chinese.
In this weeks episode we discuss rotational optimisation, timing triggers, the incorrect use of indicators, the 3 components you must have in a trading strategy and the Chinese markets.
- How Jake introduced his son Elliott to trading
- How the way an airplane takes off led Jake to a momentum trading strategy
- Tips to avoid over-optimising a strategy
- The principles Jake used to developed strategies that still work 10 years later
- Using the rotational optimisation method to reduce the chance of curve-fitting
- Optimising stops and targets
- Why you need to take into account trading ranges when placing stops
- The 3 components you need in a strategy
- How Timing triggers can be used in trading
- Current market volatility and how it may resolve
- The impacts of not understanding your tools
- Trading the Chinese stockmarket
- Key forces driving Chinese stockmarket behaviour
- Strategy styles that suit the Chinese markets
- Current areas of research that show value
- The most valuable indicators in trading
- Jake and Elliott can be contacted through their website 2chimps.net or follow @twochimps on Twitter
- Recommended book:
Top tips from this episode
Here are some of my favourite tips from Jake and Elliott this episode:
- Rotational optimisation – This is the process Jake and Elliott use to ensure they’re not curve fitting to data. They will start with the greatest inputs, what will trigger a long/short, then more to profit target and then to stop. They will rotate between the variables they’re optimising rather than trying to optimise them all at once. As Jake said ‘what most people want to do is optimise all variables at the same time and go through maybe 2 or 3 million tests, they will always find something that works if they do that but it will not work going forward’
- Indicators – It was interesting to hear Jake and Elliott explain how a lot of traders don’t understand the indicators they’re using and so they’re being misused or misunderstood. I like the way Elliott put it when talking about indicators, he said “a lot of the time, at their base, they have something, they’re onto something, it just haven’t been refined to the point where it’s something useful or has good predictive value”
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10 August 2015