Today I’ll be talking about my trading story and it will be full of notions which will be extremely useful to you, a real must to build your personal trading business.
I’m trading today with more than 80 active systems but what path did I go through to be where I am?
My story in undoubtedly a success story even though I consider my greatest achievement to be still in the market, considering I saw so many things, and also, unfortunately, many sad stories of people who got ruined by trading.
Everything started back in 2001 and when I was trading Covered Warrants. It was sort of a videogame, trading inefficiencies, I even wrote a guide on how to trade those instruments: that was my first actual teaching experience in the trading world!
Being an Engineer and knowing Covered Warrants inefficiencies could not last forever, I started looking into trading systems development and my first approach was a great disillusion! In spite of all my efforts applying common rules found on the internet (mixing as many indicators as possible…) I could not find anything that worked!
It was a friend of mine, a great Italian trader, Domenico Foti, who gave me the right tips to develop systems that worked and it was actually easier than I could imagine. Every strategy was composed by block of rules, the market was allow to develop its movement for some hours and then, inside a time window, orders were placed. These were breakout orders to buy or sell at significant levels such as, for example, the high or low of the day so far. Stop Loss or end of the day close were the exit orders. The filtering rules were mostly based on volatility compression or expansion such as limiting the expansion over the last 5 trading days.
I got the confirmation to be on the right way when in 2004 I participated to a seminar by Larry Williams. He was trading in a different way from me but showed the same approach in terms of systems built with blocks of rules.
In 2005 I tried the first challenge: the European championship, and I achieved a 61% return over the 3 months of competition winning with a single system trading EuroFX future. This strategy was built using 4 different blocks of rules and positions were held overnight.
That achievement pushed me further to try the World Contest and that’s what I did in 2008. Facing a more challenging target and aware that a single strategy could not be enough for such a contest, I decided, after trading in a discretionary way for one month, to use 4 different systems, the EuroFX one, an intraday trend following strategy on Dax Future, an intraday trend following system on the Italian FIB index future and a countertrend system on miniSP500 (I chose this market to trade that system being miniSP500 a market with a strong meanreverting behavior).
That was a great year and a great result: 672%, which lead me to the decision to try to win three years in a row as nobody ever did.
The most logical decision was to continue with the mix of strategies that allowed me to win in 2008… So was 2009 also a triumph? Not really…
Just to recap: with greater targets we need also greater diversification, to catch more opportunities and to better balance our trading. A single strategy (even though a great one) is not enough and we need a mix to diversify as much as possible. This is true for a one year long contest but even more if we want to trade for a living!
That was my first step and it was really successful, but then something happened, what?…
See you soon,