021 – Trading 100+ Strategies – Tim Rea

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Tim Rea is a proprietary trader, trading his own money with well over 100 automated systems across 25 different Futures contracts.

In 2008 he won first place in the World Cup Championship of CME E-mini Futures Trading® (third quarter)*.

In 2010 he placed 3rd in the World Cup Trading Championship of Futures & Forex Trading® and came back to win the futures/forex competition in 2011.

In the past he used to operate Auto Trading Systems as well as Transworld Capital Management, which was a CFTC registered CTA and NFA member in the USA however he no longer offers public managed accounts, choosing to focus on trading his own money instead.

Tim trades fairly short term with most trades being completed within a 1-3 day timeframe and is fairly active doing several thousand transactions a month in total across multiple clearing firms.

In this weeks episode we discuss various aspects of trading multiple strategies, including monitoring performance, money management, correlation, technology and trading in markets not in your timezone. We also discuss the impacts of the MFGlobal and PFG collapses and how Tim overcame the heavy losses to continue trading.

Topics discussed

  • Becoming a systems vendor, CTA and broker and why he then left it all behind to just trade his own money
  • How shorter term trading can increase confidence in a system
  • How many strategies he’s currently trading (hint: its more than 100!)
  • Keeping track of the performance of multiple strategies
  • Why you shouldn’t just stop trading a system when the drawdown is larger than it has been historically
  • Why you should try to understand the underlying reasons for strategy drawdown
  • Considerations when adding more strategies to a portfolio
  • Managing correlations and position sizing with multiple strategies
  • The benefits of trading a portfolio vs trading an individual method
  • How to manage trading markets not in your timezone
  • The impact of the PFG collapse and how Tim overcame the heavy losses
  • Lessons learnt from dealing with MFGlobal and PFG collapses
  • How to manage your trading account to minimise risk of loss in another collapse
  • The benefits of trading Forex
  • How Tim won the trading championship trading just the EURUSD
  • The importance of vision in your trading business

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Recommended book(s)

Quotes

Top tips from this episode

Here are 2 of my favourite takeaways from my chat with Tim:

  • Diversification – we often hear about the importance of diversification but Tim really takes it to extremes. He trades more than 100 strategies over 25 futures contracts and the benefits of that is he can trade more aggressively with a portfolio of strategies than if he had an individual strategy. He also mentioned that diversification doesn’t have to be across instruments or markets, he won the world cup trading championships trading just the EURUSD pair in Forex by diversifying strategies and timeframes.
  • Protecting trading accounts – Tim’s experiences with the MF Global and PFG collapses is a great reminder of the risk of our trading accounts sitting with brokers or other institutions. There have been a number of collapses around the world in recent years, both big and small companies and even though client funds should be segregated how do we know they really are? Tims suggestions were to spread your trading capital amongst brokers and to only keep enough money in your account to operate.

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