004 – Trading System Design – Nick Radge

Ni

Nick Radge is a professional trader, analyst, educator and author.

He’s been trading since 1985, was a floor trader at the Sydney Futures Exchange and worked for international banks in London, Singapore & Sydney.

He is an expert in trading system design and technical analysis.

In our chat we discuss system design, the best type of systems to trade, how observations can lead to better strategies, the best way to handle a bear market, measuring system performance, survivorship bias and the difference between successful traders and everyone else.

Topics discussed

  • The trading style most people should try first
  • Systematic ways to determine a trend
  • Why simple systems are the best
  • Why broker consensus is a poor indicator
  • The best type of stocks for trend following strategies
  • What you need to know about a system to be able to handle the drawdown
  • How observations can lead to better strategies
  • Why buy and hold offers average returns and the best approach to handling a bear market
  • How trading can take less than 5 minutes per day
  • Measuring the performance of a system
  • The difference between very successful traders and everyone else
  • The types of survivorship bias that could be ruining your backtest results
  • The warning signs of over-optimisation
  • Coping with drawdown and personal doubts
  • 2 basic strategies you can start testing today!

Resources mentioned in this episode

  • To learn more about Nick and his work, checkout his website at www.thechartist.com.au
  • You can catch him on Twitter @thechartist or email [email protected]
  • He offers a free weekly newsletter packed with great information and trading ideas, get it here
  • Recommended books:
  • TRADING STRATEGY: Interested in knowing how Nicks Bollinger Band strategy performs? We test it out, check the results here
  • NOTE: Nick is presenting at the ATAA conference in May, along with a number of other fantastic speakers. More details can be found here.

Back to basics trading webinar:
https://vimeo.com/19621172

What makes a successful trader:
https://youtu.be/ew1L6SLpHgM

Quotes




Top 5 tips from the chat today

  1. The key to being comfortable with a strategy is first and foremost you need to understand why your strategy makes money and in what conditions it will get into strife
  2. The difference between very successful traders and everyone else is the ability to apply the strategy over the longer term
  3. Next 1000 trades. One trade is not going to make or break you, there is another trade around the corner. Everyone can do it, you’ve just got to apply yourself over the longer term
  4. People want the strategy that is going to work well in all markets all of the time. It doesn’t exist
  5. The way Nick copes with drawdown or self doubt is to look at the experiences and data provided by those managers who have been in the game for 20,30,40 years, understanding their journey can give you the confidence that what you’re doing will be ok too just by looking at the big picture.

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