Ep. 65 – High Yield Trading Strategies
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In this episode:
This is the ‘Risky’ episode! Something slightly different here today – someone even says the words ‘martingale system’. SHOCK! HORROR! OUTRAGE! Danger-signs up and hard hats on then ladies and gents.
Tom magically records a podcast despite being on Safari in Africa (lies!)
Your Traders Support Club questions answered
Tom talks about turning one of his profitable trading systems into an algorithm. He has made great progress with ‘Matt the Developer’ and is seeing some great returns (…in testing!)
José Ricaurte Jaen returns to the show to talk about his philosophy of high-risk, high-yield trading systems
José believes that a scientific approach to risk limitation can offer opportunities for high-yield trading strategies.
We laugh at Tom’s misfortune
Trader Interview – José Ricaurte Jaen – High Yield Trading Strategies
José Ricaurte Jaen is a balls-out trader.
He has a different perspective to the ‘safety first’ approach of many trading educators and commentators. He believes that if, for example, you have a $10,000 account, there is very little point in trading really small and safe to mak 10% and…$1000 in a year.
José believes that the risk of blowing up your account is worth taking if the reward could be turning your $10,000 into $100,000! Well, maybe he’s just being provocative, but I suppose he has a point about time invested to money made.
As he himself says – people will probably throw rocks at him in the streets for saying this, but at least he is honest!
Martingale System …. ! ….?
José also dropped the words ‘martingale system’ into the conversation just to wind us up! But, in truth, his ‘doubling down’ is not a martingale system, but a way of getting in at a discount when you still believe in your trade direction, even if stopped out.
This is not everyone’s approach, and Jose makes it clear that it is not suitable for all traders. But, he is developing an algorithmic approach based on the mathematical data that he believes will enable him to make big returns on a high yield trading system.
You can follow Jose at https://twitter.com/
Tom’s Algo Chat
Tom has been secretly squirreling away developing an algorithm based on one of his currently profitable trading systems.
Though, given that he almost never stops talking about it, it’s not really that secret.
In testing he did over 100% on one currency pair with about 15% drawdown. Another one for the risky episode! Of course, in the real world the idea would be to spread that trading amount over 10 currency pairs.
This means at one tenth of the trading size, the profit would be 10% and the drawdown 1.5% (theoretically).
Stack up 10 currency pairs and the profit should still be hitting roughly the 100% mark again, but it is unlikely that all 1.5% drawdowns would exactly align – thus limiting the largest drawdown but keeping the same overall profit. Smart huh?
But…of course…this is all a bit pie in the sky until it is real. As Tom is fond of saying – it’s not a thing until it is a thing!