How Algo Trading Became My Focus, Passion & Income – Part II
My last post I talked about how “The Market You Trade Is Not Random“ which is what originally got me interested in trading. Let me continue with this series of how algo trading turned into my dream job and income stream.
In part one of “How Algo Trading became My Focus, Passion and Income” you saw how my 15+ years of trading evolved from trading only, to teaching and coaching others, and then writing financial newsletters to provide thousands of followers with video analysis, trading tips, and the occasional trade idea.
During that time it became clear that teaching and providing the masses with trading strategies that would provide a consistent stream of income year after year was much harder than I expected because of the way humans function as explained in part 1 of this report.
Seven years ago in 2006 is when I caught the algo trading bug. It was the day I saw an interview on CNBC about a trader who converted each strategy he had into algorithms and had incorporated each one into a powerful algo trading system. It was this hands free trading idea I was sold and set out to convert my trading strategies into an algo trading system of my own.
Having an algo system that trades and profits in up and down market conditions without having to look at the charts or pull the trigger on entering and exiting setups sounded so good I was determined to build my own.
Within a couple of hours of Googling the terms automatic investing, algorithmic trading, and algo trading type search results I had answers to my list of basic questions. Once I knew what trading platform I should use, some basic guidelines on what to look for in a trading programmer, and the main do’s and don’ts about algo trading I was ready to start calling my list of programmers. By the end of that day I had myself a programmer ready to start my project and I was fired up!
12 Algo Trading Strategies in One Automatic investing System for Individuals
Fast forwarding to today, hundreds of version of each of my algorithms, and 4 programmers later I now have my own automatic investing algo trading system that naturally expands and contracts with the stock market using cycle analysis, volatility, trends, price patterns, volume and sentiment to invest in the S&P 500 index.
This all-in-one system has 12 of my best trade setups and strategies for the S&P500 index. No matter the market direction (up, down, or sideways) and no matter how volatile or lack of volatility it has there is an algorithm strategy taking advantage of the stock markets price fluctuations because we specialize (live and breathe) to make money from this highly liquid index..
Do not diversify. Specialize.
“Diversification is a protection against ignorance.
It makes very little sense to those who know what they are doing”.
Warren Buffet
Know that the number #1 problem investors struggle with is themselves because of the emotions, lack of focus, and lack of commitment us as humans have. And no matter how hard you try to make you’re trading rules simple to follow and execute you will always stray from what you should be doing from time to time.
Your will typically break your rules during a losing streak or highly emotional time in the market when it’s either overbought or oversold and you do not think your systems next trade will be a winner. Because you fall off the wagon at these critical points which happen to be the most important times for your system to make money in most cased you sabotage yourself and watch missed opportunities pass you by and you investing performance drop dramatically.
In the next part, you will learn about some really cook stuff and just how to take advantage of algo trading systems and how much money you can make on a monthly and yearly basis with zero investing/trading input.
Stay Tuned For Part III – How You Can Make Money With Algo Trading …
Chris Vermeulen
