best advice among many you gave us, "patient is a virtue", life is a marathon!, for those who have buried a youngster can better understand this crucial concept missed by many nowadays, thank your brother!
Awesome video! Very useful information for us beginners out here. I had been kind of thinking about a lot of these things but didn’t know how to quantify the amount I would need to start trading my strategies.
I’m not a beginner trader but totally new to Algo Trading and I have found your stuff the most helpful out there. Really good stuff to share. One question I have about position sizing in regards to 3.5 times initial margin. Let’s say you are fully diversified with say 25-40 strategies in play. Does the 3.5 rule still apply or can you trade more strategies knowing that your equity curve has less risk for total drawdown?
By the way I can’t wait to take your course. I previously have taken the core strategy and professional futures courses at Online Trading Academy. Now that I’ve traded live for 3 years with no success I’ve found that I am like you and don’t wish to trade discretionally anymore. I want my strategies to do the work for me and I just want to maintain them.
@@jondburke - One benefit of diversification is that you can trade more strategies without increasing capital at the same rate. But it is something that depends on the strategies, their correlation, etc.
@@jondburke - Great! Algo trading is a different world than discretionary, for sure. Still hard and sometimes frustrating, though. By the way, I'm assuming you heard about OTA's troubles with the FTC...
Thanks for the video and for your books in general. They are all very high quality, unlike most of the drivel out there. I have a qn regarding point 3 - trade at least 6 strategies. This would imply that you need the capital at any given time, to enter 6 positions in parallel, correct? You need to take every signal that your strategy gives you and in the worst case, all 6 strategies could signal you to enter at about the same time. Am I right? This also relates to something you have said in one of your books, about how you trade close to 80 strategies or so to diversify. Does this meaa that your account size at any given point in time, has to have enough money in to to enter 80 positions simultaneously? And this is assuming a conservative estimate of 1 futures contract per position. Isn't that a HUGE amount of capital? :)
Hi Karthik - Thanks for the kind words, and thanks for the question. The short answer to your question is "not necessarily." You could trade 6 strategies, and depending on the strats themselves, they might never all be in the market at the same time. Or they could be. The point is if you build your own strategies, you can decide how to do this. Then to take it further, if you had 80 strategies, chances are you will have multiple strategies for the same market. There will be times where they conflict (one strat is long, the other short), so you may not need huge capital. Or maybe some of your strategies are rarely in the market. Then, you can trade more strategies with a given amount of capital. This is a complex topic, for sure. It is easy to get into trouble if you don't have some guidance. Hope this helps!
@@AlgoTradingWithKevinDavey Thank you for the prompt response Kevin. Yes, the case of strats cancelling each other out makes sense when you have a large number of strats on one instrument.
About the rule of 6 month before live i understand it well for the psycho part as it help you to step back because you spend time creating it, but about statistical approach I got the feeling the number of trades is important as it lead to a certain convergence of the equity curve (smooth variance) ? Maybe i am wrong ?
Thanks. Nothing i did not know but you remind me of diversity wich i have been thinking of for 5 years but end up in what i do best. Trading Dax futures. My 2020 goal will be trade with diversity! Brgds Curre
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best advice among many you gave us, "patient is a virtue", life is a marathon!, for those who have buried a youngster can better understand this crucial concept missed by many nowadays, thank your brother!
I appreciate your comment!! Life definitely a marathon. Having run 5 of them, I can safely attest to that!
Great guide. Really helped me. Thanks!
Glad it helped!
Awesome video! Very useful information for us beginners out here. I had been kind of thinking about a lot of these things but didn’t know how to quantify the amount I would need to start trading my strategies.
Thanks, I am glad you found this info useful!
I’m not a beginner trader but totally new to Algo Trading and I have found your stuff the most helpful out there. Really good stuff to share. One question I have about position sizing in regards to 3.5 times initial margin. Let’s say you are fully diversified with say 25-40 strategies in play. Does the 3.5 rule still apply or can you trade more strategies knowing that your equity curve has less risk for total drawdown?
By the way I can’t wait to take your course. I previously have taken the core strategy and professional futures courses at Online Trading Academy. Now that I’ve traded live for 3 years with no success I’ve found that I am like you and don’t wish to trade discretionally anymore. I want my strategies to do the work for me and I just want to maintain them.
@@jondburke - One benefit of diversification is that you can trade more strategies without increasing capital at the same rate. But it is something that depends on the strategies, their correlation, etc.
@@jondburke - Great! Algo trading is a different world than discretionary, for sure. Still hard and sometimes frustrating, though. By the way, I'm assuming you heard about OTA's troubles with the FTC...
Thanks for the video and for your books in general. They are all very high quality, unlike most of the drivel out there. I have a qn regarding point 3 - trade at least 6 strategies. This would imply that you need the capital at any given time, to enter 6 positions in parallel, correct? You need to take every signal that your strategy gives you and in the worst case, all 6 strategies could signal you to enter at about the same time. Am I right?
This also relates to something you have said in one of your books, about how you trade close to 80 strategies or so to diversify. Does this meaa that your account size at any given point in time, has to have enough money in to to enter 80 positions simultaneously? And this is assuming a conservative estimate of 1 futures contract per position. Isn't that a HUGE amount of capital? :)
Hi Karthik - Thanks for the kind words, and thanks for the question. The short answer to your question is "not necessarily." You could trade 6 strategies, and depending on the strats themselves, they might never all be in the market at the same time. Or they could be. The point is if you build your own strategies, you can decide how to do this. Then to take it further, if you had 80 strategies, chances are you will have multiple strategies for the same market. There will be times where they conflict (one strat is long, the other short), so you may not need huge capital. Or maybe some of your strategies are rarely in the market. Then, you can trade more strategies with a given amount of capital. This is a complex topic, for sure. It is easy to get into trouble if you don't have some guidance. Hope this helps!
@@AlgoTradingWithKevinDavey Thank you for the prompt response Kevin. Yes, the case of strats cancelling each other out makes sense when you have a large number of strats on one instrument.
About the rule of 6 month before live i understand it well for the psycho part as it help you to step back because you spend time creating it, but about statistical approach I got the feeling the number of trades is important as it lead to a certain convergence of the equity curve (smooth variance) ? Maybe i am wrong ?
Thanks for the comment. I have found time is more important than the number of trades, but obviously the more trades the better!
@@AlgoTradingWithKevinDavey many tks I appreciate you take time to answer.
Thanks. Nothing i did not know but you remind me of diversity wich i have been thinking of for 5 years but end up in what i do best. Trading Dax futures. My 2020 goal will be trade with diversity! Brgds Curre
Thanks for the comment, good luck in 2020!
And for me don't micro manage your strategy : help step back and focus.
Yes, you are right!