The Chartist Twitter

ask nick radge

Yesterday I put out a call on my The Chartist Twitter feed for topics of interest.

There were a broad range of topics suggested, some trading, others not. Some weird. Some wonderful.

This week we will knock out a few short and sweet answers. Next week we will get into a few more of the technical questions.

Q: How did you design/test trading systems prior to technical analysis software (Amibroker etc)?By hand. When I started trading in 1985 I used a 5 & 10 day moving average crossover system plotted at the end of the day on chart paper using some coloured markers. You can read more about that HERE.

Q: Who cut your hair? 🙄🧑🏼🦲I do. Every Saturday using a 0 or 1/16th

Q: I would be interested to see if you are looking at any AI concepts (machine learning, neural networks). Alternatively any other tech to make your trading more automated so you have more time for squatting and fishing.I’m a sceptic when it comes to machine learning and AI in the trading arena, although I’ll freely admit I’m no expert on it and don’t know anybody that is successful with it. I did sit in on a presentation with a trading group that consisted of ex-military intelligence guys that had created a machine learning strategy. I was not impressed and punched holes through much of their logic.

With regard to other technology, refer to THIS article. Also, whilst I don’t use it myself, I know a few people who use Alera ATS and speak highly of it.

Q: What criteria do you use to rank signals when there are more than you can take? Is the ranking system specific or other (eg. Liquidity/volume).Ranking signals can be done in a variety of ways. The best I have found have been using Rate of Change or Volatility. With short term systems, the best lookback is around 3 – 5 days, and longer term trend systems, the best lookback tends to be >200-days.

Q: Do you use any common indicators such as RSI or MACD etc? If not, have you tried them in the past and found them of no value?The only traditional indicator I use are Bollinger Bands and they’re used in one trend system and several short term systems. I have tested RSI and MACD and yes, they can certainly be useful. I tend to shy away from ‘standard’ or well used indicators, such as RSI(2) which has been flogged to death over the years by various people. The Bollinger Bands I use are tricked-up versions so they differ slightly from traditional bands.

Q: Squat or deadlift?I squat 4 times a week. I’ve probably only deadlifted twice in the last year.

Q: They say we are always students of the game, so what are you studying now?Completely agree. My most recent research has been on position sizing and portfolio construction for my day trade strategy. The results appear very promising and have been enacted on over the last 6-months in real time with the expected positive results. I have managed to move the MAR ratio from 2 out to 5.

Q: I would be most interested in the idea generation process. How do you think of new strategies to test?A common question. I’ve discussed that HERE. I’ll write some more on this topic at a later date.

Next week I’ll dig into some questions in a little more depth.

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