Hi guys hi from Andrea Unger.
Once again I was asked about my system, my trading system.
Somebody asked me: “Why don’t you sell your system or do you lease your system!”.
This was not a question from somebody who approached trading the day before, but from people who actually have been spending months or years in the trading environment and this is a bit odd because I don’t have a trading system, I don’t have “THE trading system”.
These people assume that I made the profits that you know and achieving all the goals that I achieved, with a system, as if I had one trading system, sort of a secret set of rules, able to figure out what markets were going to do and therefore profiting from that.
This, in my opinion, does not exist.
I have a method, I have a system to develop, I have a method to develop trading systems.
I face the markets trying to understand them and I do this mechanically.
I use some scripts to analyze the markets and then I decide what to do.
When I start developing a new trading system this time 1 on a specific market, the first thing I look at is if this market is supposed to respond better to a trend-following approach or to a counter-trend approach.
How do I do this? Personally, I do this in a very simple way.
I take the market on a daily basis and I simulate a very simple system buying the breakout of previous sessions high or selling the breakout of previous session low, always in the market and I look at the equity line that derives from this approach.
If the equity line goes up like crazy, I obviously assume that that market is responding very well to break out entries in the direction of the trend and I will obviously focus on a trend following development as a starting point.
I might look for some counter-trend entries on that market as well but this will be a second stage development, searching for a new way to diversify on that specific market, but obviously, my first task will be in the direction where I will find less resistance from that market to respond to my impulse.
On the contrary, if that market shows a falling equity line on that simple system I will obviously focus on some counter-trend development to look for a system.
So I analyze a number of markets and on each of them I develop, as a starting point, the first system that I believe is the best way to go for that market.
Putting on together, I have my whole infrastructure with the set of systems that I put in the market.
The mix of these is something that we will obviously analyze in another video because it takes much more than this five minutes to describe how to put them together and we can not even explain it in a short description, but obviously the mix of systems is very important to create a real diversification and not simply another exposure in some direction rather than other, this is clear.
So guys I don’t have a system, I have a method to develop systems.
If somebody approaches you trying to solicit you to invest in some sort of incredible trading system he discovered, claiming maybe he has been working on that system for years, well, don’t trust him!
I mean I hope he has this incredible tool, I hope for his success, but normally this is not true, simply because “THE system” does not exist.
There are trading systems that can adapt to a number of markets, but they will never be showing an outstanding performance day by day as these people normally claim or show on paper.
There could be a system that can produce profits in the long run but not the way we probably hope to see or we believe could be produced by a computer.
So guys “THE trading system” is not out there, I don’t have it.
If I don’t have it does not mean it doesn’t exist, but my experience in this field for years now has never shown any of these miracle trading systems.
So the ultimate approach is the assembling of a number of trading systems in different markets with different approaches, but there is no unique trading system that can make you rich or successful in this business.
This is what I believe and if you have something that can convince me of the contrary, please comment.
I will be more than happy to listen but you have really to convince me because so far nobody was able to do it, once we go and dig into the numbers and fortunately the response is always the same: “THE system does not exist!”
That’s it, ciao from Andrea Unger, see you next time ciao!