Trading crypto and stock SYSTEMATICALLY

Transcript (Auto translated can have spelling mistakes)

so yeah uh Adrian like you know I have gone through some of your videos which you were talking about the stock trading and the tips that helps people to make a lot of profit in the stock trading so why are you doing stock trading why yeah well for a couple of reasons good interesting question actually um I I think the biggest reason I mean the obvious one is to make money right to build wealth but beyond that the biggest reason is that I find it a fascinating challenge you know it's it appears easy but it's not it's it's it's difficult to make money difficult to be consistent and make money longterm uh there's a lot of competition in the markets uh the market is always changing a little bit but it always also always has some common Behavior as well and so it's a really interesting puzzle and I like I really enjoy the process of building strategies and testing them to make sure that they work and then deploying them with with real money um I also enjoy the psychological aspect of it because uh if anyone has traded for a little while you know when something goes in your face you feel good when it goes against you you feel bad the emotional swings are very constant and getting control of that and Rising above the emotion and observing the emotion rather than acting on the emotion is a really you know fascinating study in human psychology and so I quite enjoy learning about myself and about other people uh in in that way as well mhm so that is the reason I mean you in a way like like the ups and downs of your uh mind which is I mean you you are kind of watching the ups and downs which is happening in your mind respective to the stock trading uh which you are doing so you are kind of enjoying that this is the reason you are actually doing the well enjoying is I mean you are obviously getting ecstasy like there are different things people say get [laughter] yeah it's fascinating to observe the emotional reactions it's like something happens in the market and there's an instinctive emotional reaction to either run away hide you know go more in quit leave uh you know all of the um all of the fear and greed based reactions they're instinctive and they happen very very quickly and I really what I enjoy is not the emotional reaction action but the observation of theot emotional reaction and the uh the systematic way of addressing that observation because I trade systematically with rules the rules tell me when to buy and when to sell the decisions aren't based on emotion but the emotion is still there so it's very interesting to watch the emotion when I'm trading and then use that emotion as a uh Trigger or as a stimulus to come up with new ideas uh new ideas to test and uh new strategies to to to create all of that is you know very interesting challenge in the markets so when we are talking about the stock trading per se there is two different emotions happens in two different point one is uh you invested something in some kind of stock and uh it's when up so this time you feel emotions pretty good and uh the stock has came down so this time uh you feel a different sort of emotion so which emotion you like most H well the most enjoyable one is obviously when it's moving in your favor and you get oh you know I'm good I made the right decision I feel happy about this I'm getting more wealthy I'm making money that's actually uh not the most helpful emotion though um the the negative side which is when it starts moving against you you start losing money uh that's where you can learn a lot more about yourself I think so from a personal development perspective I think observing the fear the um the the loss the the lack um the concern maybe I'm not good enough observing all of that and then letting it go and releasing it is so that you can keep following your rules I think you can learn more uh from a personal development perspective from from that side of it but it's not fun you know that bit is not fun there's a lot of negative feedback that we get as Traders and you know the markets will even if the market is moving up right and we're and we're making money it doesn't just go straight up it's up and down up and down up and down up and down down there are some some sort of patterns like you know some will go up and uh you know suddenly it can go up and there is some other sort I mean I have learned uh something from the books there are some patterns which people are trying to identify the MS of the stocks which is in the market and stuffs like that like you know so yeah continue like yeah I I think you know what what I was going to say was that because nothing moves directly up always up in your favor there's ups and downs it doesn't matter how much money you're making there's always some negative feedback because you make money and then it's Downs like you make money make money so there's a lot of negative feedback coming when you're trading in the market and that is why it's so difficult for most people to trade well and to make money because the negative feedback is very hard to deal with so the way the way I deal with that the way we deal with that at enlighten stock trading is to put uh rules in place systems that tell you when to buy and when to sell because if we leave it to the emotions there's so much negative feedback and so many emotional swings it's almost impossible to make consistent decisions so instead we have rules that tell us exactly when to buy exactly when to sell and then we have to just observe our emotions but let the rules run and you know just follow the rules so that's that's the magic that's that that's how we can um survive and profit in the markets despite all of the emotional swings it's by separating ourself and using rules that we've tested and built confidence in to make money so basically you have you could have identified uh uh the patterns and you might have developed some tools and systems and things like that that could actually uh help you to trade uh much better um so what are things you have developed and also do you offer this to people like you know if they want to trade or something that sort how does it work yeah so I mean yes I have um uh I mean I call them trading systems right or you know some people might say trading strategy or trading algo it's all the same sort of thing they're rules that tell you when to buy when to sell how much to buy how much to sell um there's different types of rules there's Trend following rules where you buy something that's going up and you hold it until it's no longer going up and it starts trending down and you get out mean reversion rules where you buy something that has a a sudden dip from fear or panic and then you get out when there's a little bounce um there's seasonality rules that buy at certain times of the the week or the month or the year so there's different types of rules and I have you know trading strategies or trading systems for for each of those um when I'm teaching a another Trader uh I provide the rules which is part of the uh Magic yeah you need you need rules that are profitable you need systems that are profitable but it's not the whole story because I could give you some rules and you could follow them and if you made money every day you you'd think they were good rules but there's going to be days where you don't make money there might be weeks or months where you don't make money because the market gives you profit like this it's not always up up up up up and as soon as the rules I give you start losing money what happens to your confidence you start losing confidence and if you EXA yeah if you uh if you lose enough then you lose complete confidence and you quit those rules might be very good rules they might be the best rules in the world but if you lose confidence in them you won't follow them so when I'm teaching I teach the rules but I also teach how to test and evaluate the rules so that you build confidence in them so that you know MH exactly what to expect with those rules how many wins in a row how many losses in a row what percentage of wins and losses how big are the wins how big are the losses how long do the trades take what does the profile of your the equity curve of your system look like so when you know what to expect and you've tested it then you can be confident so it's partly about me providing the rules and it's partly about me showing teaching how to test and evaluate the rules so you can build the confidence for yourself rather than just trusting me because your confidence is much more important you know you need to have that absolute confidence rather than just blind faith that you know the rules that someone gives you work mhh if we observe the world uh it's it always as a mathematical patterns I'm I'm a software developer I understand the patterns and the problems which everyday peoples are facing because if we look into the world in the way a technology person who is understand uh like it's it's it's a lot of problems I mean I'm I I mean when we look into the softwares what we do is like we try to fix the problems M so if the problems are fixable what does it mean it means that it is a mathematical reputations of the uncertainty which is actually happening so when we understand this particular pattern because the when somebody's buying the stock and somebody is selling the stock is is also human beings they have a general behavioral pattern they are actually trading the thing so there will be obviously there will be a systematical uh mathematics formula can be observable so so if some rules is been made out of uh these mathematical formulas is there a percentage that can go wrong and why it can happen in that way yeah absolutely I mean first of all you're exactly right there are people in the markets and the people behave a certain way they have certain emotions certain things happen and so there are repeatable patterns the challenge is those patterns don't [clears throat] work 100% of the time mhm in fact you know the markets are very random very chaotic so there might be a pattern there but but sometimes it works sometimes it doesn't work you just need a pattern that works enough so that on average you can make money and also when you buy and it's a and it's a bad trade and you lose money you've got to make sure that you don't lose too much so in order to succeed as a Trader the first thing we have to accept is is that there's a lot of uncertainty yeah we might have a a pattern that we've developed a system around and that system might be profitable in the long run but each individual trade has a high degree of uncertainty it could be a big winner could be a big loser could be Break Even could be a little bit you know a little win little loss we won't know in advance what type of trade that is so in order to achieve the the profitability of the system or the the pattern in the long run we need to put a little bit of risk on each trade so if we're wrong we don't lose very much if we're right we don't make very much but the key so the key is when we're wrong we can't lose a lot of money we don't want to lose a lot of money because if we put too much too much uh um risk on on one trade and it turns out to be a bad trade because the is's always bad trades our account drops so much and it's hard to recover if we have $100 in our account and we lose $10 so now it's 90 we need to make so we've lost 10% right but we need to make 11% to get back to 100 so it's a little more we've got to make up but if we lose 50% of our account from 100 down to 50 we have to now make 100% on the 50 to get back to 100 MH the more we lose the harder it is to recover and the less chance we've got of succeeding long term so to make a pattern work we accept that there's uncertainty we put a small amount of risk on each trade so if we're wrong we don't lose too much so that we've got a chance to recover and go on to make more profits in the long term so this is the this is something about the daily trads which is happening if we talk about the future options so you uh you know like you know uh this stock can be uh go a little bit higher in uh X and Y Z date and we can make an option to buy that uh stock in that particular day which is not yet being occurred and uh uh we can sell the stock in that particular day um which not it been happened so in that case the probability of losing and the probability of winning is a little bit uh more and uh you know little bit I mean it is it's maximum risk that's what uh I feel how do you see about this like you know future options does this rules will work for that as well yeah so are you talking about mostly how the future is unknown right so you know we we don't know whether it's going to the market is going to go in our favor or go against us or just go sideways um it's predictable we need to accept that we can't predict the future you know we can't say with certainty it's going up tomorrow it's going up over the next no you cannot say to somebody like me that we cannot predict future I have I'm an astrologer as well like you know I have even predicted the Trump will be become the president you can see in my videos and you know and uh the and even the about the covid stuff I have predicted before it's been happened [snorts] the time stamp the metadata of the videos you could actually see in my YouTube channel and those are about that like you know it's it's not exactly we cannot predict the future we can understand mathematical mathematics about the future and we can actually see future forc future so anyway like yeah so in in trading my approach to that or the way I think about it is all we can do is react or respond to what is happening now we can't say with certainty about what is going to happen in the future but we by looking at the past there is a futuristic option is there future trade is there right yes except the I mean if you're talking about like futures or options you know the yeah we can we can buy and sell those products but the movement of the instrument in the future you know what it does tomorrow what it does the next day we don't know right it's uncertain so in we have to accept that there's there's uncertainty there but we can look at the historical price movements of the market and we can infer probabilities if certain patterns happen then there's a probability that we'll get a big Trend well there's a probability that we'll get a down move mhm you know if you for example if you have a stock and it's been trending up strongly and it has three big down days the probability of a rebound day is very high because three big down days is usually because of some news announcement that makes people fearful they sell and then eventually people realize oh the emotion was too high it wasn't as bad as we thought so the price recovers MH based on historical data we can see that that is a recurring pattern it doesn't always work but the probability can be in our favor so we can build a strategy around that so then today if we see the market was going up but then there's three big down days for example we could make the decision to buy because the probability tomorrow is that it will bounce now I'm not saying people should use that as a strategy you have to test it for yourself on the different markets and so on but it works well on some markets mhm mhm so we're trading successfully is about managing probability and managing risk MH you know there's a probability that a certain move will happen so we put some we put a position on with a certain amount of risk if we're wrong we don't want to lose too much money but if we right we might make some money then we do that and uh over many many trades and we can we can we can build wealth so the thing is that uh the daily trades the patterns which are occurring in the daily trades that could be appear uh that can appear in the future options as well am I right or yes what do you think about that like you know well I I only trade stocks so just the underlying stock um I don't trade I don't trade Futures I don't trade options I just trade the the movement of the stocks um so yeah I mean I'm I I I don't I guess I don't really have a view on uh on the other instruments um all I know is certain uh certain patterns and strategies can give you a positive Edge in any Market you know you just need to find the patterns and strategies that give you a positive Edge test them to build confidence and then uh apply them over and over again with low risk so that you can uh you can have a positive expectancy over time mhhh uh so how long youve been trading the stocks uh I've been trading uh well over 20 years I started probably a bit over 25 years ago now and it took me about three years to figure it out and to get profitable and get consistent and then since then um basically after after about three years I discovered systematic Trading I implemented um trading systems and then from then on um basically was able to to to make money be profitable uh not every month but you know fairly fairly consistently over time and so now I trade uh a range of markets I trade the Australian stocks US Stocks can Canadian stocks Hong Kong stocks I trade long and short in most of those markets and I trade crypto I trade crypto mostly on the long side but a little bit short as well mhh see if uh people's who want to do oversee Investments like for example as an Indian if I want to buy the US uh stocks my how do I do my paperwork I need to get an account in the uh stock trading um I mean in India it is uh uh uh the uh the sensus and things like that that is where the trading is happening uh in US it will be something different and then China it will be something different and you know in Japan it will be something different so this paper Works how do how somebody can do that yeah so it depend it it differs Market by market um in order to trade a foreign market you need a stock broker that has access to that market um now some in some countries you can only trade your own stocks they don't allow you to invest overseas or at least it's not easy other countries you can trade wherever you want I'm an Australian I live in Australia I have an account that allows me to trade in most of the major markets globally so interactive brokers which is the stock broker I use allows me to trade Australia us Hong Kong Canada uh as well as many other markets although as an Australian I can't easily trade the Indian market I can't easily buy Indian stocks um which is a big disadvantage because it's actually a really great Market to trade systematically um as you know so depending on where your listeners are what what you need to do is find an find a broker who will allow you to trade offshore offshore stocks and then you know they'll you you open the account and they'll give you access to those markets so the um it's not you know there's not one answer because every country has has different rules about this if if you can't trade other markets like some there are quite a few countries that don't that have strict Capital controls where you can't easily invest offshore that that's you know that's not uh that doesn't mean you can't trade it just means you have to trade your Market you know you have to learn how to trade just that market and um and make money with that so when uh when we are talking about the overseas market like for example we are talking about the Hong Kong we are talking about the US and maybe about the a Australian exchange or maybe about the Indian exchange does this uh pattern which you are following uh will be repeatable or not some of them are uh so some some uh patents or strategies work well across many markets some of them are a little bit Market Market specific so for example um Trend following as a model where you buy stocks that are strong and going up and you hold them while they keep going up but if they turn around and start going down you sell them long-term Trend following works well in in most markets um so and you know I think in stocks that's true because economies grow companies grow companies get better companies develop new products they grow right and if you if you buy if you if you um get a signal to buy a stock which is trending up because lots of things are happening that are good then that can continue over time momentum persists and I think momentum is a a principle that holds true across most markets there are strategies that don't work across all markets so for example I have a strategy that works very well for the Hong Kong uh stock market it it makes really good money in Hong Kong but if I apply it to Australian it doesn't work that well it doesn't lose money but it it's not good enough to trade with that's because the Hong Kong stock market has a different personality some different behaviors than the Australian Market it's actually a good thing because that means when you trade both markets you get some diversification benefit and diversification across different types of markets different types of strategies is really powerful uh it's um it it it what helps you smooth your returns in the long run mhh so as a beginner uh like uh uh if somebody want to trade somewhere uh which Market would you suggest for them when you're starting out the market you choose it has to fit your lifestyle so if you're if you're trading manually you're placing your trades um you have to trade a market that you can you can actually um you have time in your life to place the orders if you have a full-time job and you you can't be at the computer during the day to place your orders you know you can't you can't trade that market um or it's it's more difficult if you um you know you don't want to have to stay up late at night to trade in some offshore Market because you know then you'll you'll just burn out you'll be exhausted you got to make sure that the market fits your lifestyle you've also got to make sure that you have access to the market I mean if if you're in India and you can only trade Indian stocks that's the market you're going to trade right um so it's got to it's got to fit your kind of geography it's got to fit your financial constraints um but the most important thing is you need a strategy that's profitable mhm so you for whatever Market you're you're going to trade you need to find develop or build a strategy that works it gives you an ed [clears throat] um and without that without a strategy that you know has an edge that you've tested to to see that over time it works and it's profitable then you shouldn't be trading at all so the number one thing is to make sure that you have a a strategy that has a positive expectancy you've back tested it to know that it worked in the past and uh it makes money you know somewhat consistently over time MH and uh and that you're willing to follow it so I mean it is more about the uh user uh I mean the I mean how fit the market is for me uh but uh when we look into the markets I mean some markets are more profitable for example US market so the exchange value of the American dollar is far better than that of the Australian dollar uh and also Indian rupees also so [snorts] the profit I can make in the US Stock maybe if if some stock is growing 10x in Indian market in the time of one year and if one some the some other stock is growing 10x in the uh uh um in the US market um for me me as an Indian if I'm investing in the US uh stock it is 840 X for me like uh I mean the exchange rate of the USD if it is just 10 x in in India it can be 840 X in US market in that but sometime the stock the the the the way I could lost money is also 840xs in us right like you know so I will lose more money that that of I lot in India [laughter] like I I just wanted to ask you like you know if we look into these sort of consideration like you know Hong Kong exchange or any Indian exchange or American Exchange which exchange is uh more profitable the way to think about it is we make money as a Trader we make money because we buy an asset and the price of that asset goes up and then we sell it mhm or we short sell an asset and the price of it goes down and we buy it back so we make money by the price of an asset moving as a directional um systematic Trader now if you buy a stock in India the currency is valued less than the US dollar but the asset that you buy could still go up let's say 50% 100% if you buy a stock in the US it could go up 50% 100% mhm but when we're trading we want to adjust our position size how much we buy of each stock so that our risk is controlled the number one driver of success long term is to make sure you don't lose too much money when you're wrong you need to have a small risk 1% of your account or less so that if you're wrong you don't get hurt too much now if you're in sitting in India and you buy an Indian stock you know 1% of your account you know you can buy a certain amount of stock if you have to buy it in US Dollars it's a US dollar stock you can buy less and have 1% of your account at risk so no matter what exchange you're trading on no matter what price the stock is at if it's a $1 stock a $10 stock a $100 stock $1,000 stock it doesn't matter because we need to be buying more or less of it to make risk on each trade consistent so when we think about it like this no no one exchange or stock is going to be more profitable or less profitable for us because first we think about risk and we size our trade bigger or smaller to keep our risk consistent and that way if we're wrong we don't blow up our account and because we've sized our risk consistently our returns are also consistent from one market to the other so just because the US dollar is strong just because the stock price is high doesn't make it more profitable for us to trade it actually doesn't matter where you trade or what the currency exchange is um it what matters is how much does the asset that you buy or sell move and how much how big is your position size how much risk do you place per trade M mhm mhm mhm so it's really doesn't matter uh whether I am trading in overseas or whether I'm trading in India if if my uh missan hits are aligned properly right correct yeah absolutely now the advantage of trading overseas as well as your home Market is diversification it's not because another Market is necessarily more profitable now if you've got a really great profitable strategy for the Indian market Trade It manage your risk grow your wealth if you also got a great profitable strategy for the US market or the Australian Market trade it as well have some money for the local market some money for the international market allocate some of a percentage of your Capital to each and manage your risk uh accordingly and the different markets will smooth each other out over time that's a real benefit but if you can only trade your home Market I think that's fine as long as you you manage a risk and you've got a strategy that works um so when we're talking about this stock the other option is crypto which you also does the crypto trading M uh so what differentiate uh the stock from the crypto because I designed a crypto currency called elad that is uh living in the cardo blockchain and the utility of this particular token is to uh store the data in uh non-resistive Manner and I mean uh some some sort of uh the data has to be non uh aditive so on this process uh I have built the token and it's been listed in two to three exchanges so when we compare to the stock trading and the crypto exchanges the difference over here is that the crypto apart from the stock it's 24 into 7 and it is uh um it is crossborder I mean it's not like there is nobody is um I mean if you want to buy Bitcoin from wherever you are you can buy from One exchange or another exchange or some other friend can buy and send to your wallet or if you want to buy some uh other cryptocurrency you can buy and you can sell it crossboard order basically like you know it's killing all kind of um constitutional um uh you know constitutional blockages over the financial transactions between the countries so in this particular manner how do you see does the uh trading options which can be appliable in the stock also can be applicable in the crypto trading as well um how do you see because crypto is 24 into 7 mhm yeah it it is a little bit different there's a there's a few fundamental difference or important differences between stocks and crypto from a Traders perspective um the first one is the obvious one it's 247 it's always trading so in stocks we have the stock market where all of the trading happens it's in one place on one you know one set of one one set of computers uh so all of the trading happens there in crypto the trading is happening everywhere like you said in stocks the Stock Market opens at the in the morning and it closes in the evening and overnight it's not open well there's some overnight trading on some exchanges but generally there's an open and there's a close in crypto happens all the time 247 so in crypto there's a like a notional open and close it's the time of day where everyone agrees this is the day open and this is the day close but then immediately the next day starts so as soon as the close happens the open happens so you can still see a daily chart you can also see a one hour chart or 30 minute chart or one week chart it doesn't matter you can still see those charts if you can see the charts of the asset you can develop systems and strategies that work for that asset the difference with crypto is if you get the um the signal at the close of the day you immediately have to place the the buy because it's already trading yeah in stocks at the close of the day you get the signal the next morning you place the trade you have time in crypto it's immediate so then we have to look at how do the markets move do the same strategies in stocks also work in crypto or do we have to be different and the crypto Market is much more volatile than stocks typically uh the bull markets are much faster the bull bear Cycles are more condensed compared to so stocks so the the rules that work in stocks they might they can make money in crypto but generally you have to adjust them and fine-tune them specifically for the crypto Market because the behavior of the market is a little bit different mhh having said that Trend following Works in stocks Trend following also works in crypto mean reversion Works in stocks mean reversion also works in crypto MH so the generic strategies can be the same but the specific rules that you apply the parameter values you use you know do you use a 200 day moving average or a 50-day moving average or a 10day moving average that might be different between the two markets and that's something that you have to test you know this is why I like systematic trading because we can get the data we can put our rules over the data and test it historically and see how would that have performed so what we find is that the rules that work in crypto are a little bit different to the rules that work in stock but similar strategies right we're still Trend following or we're still doing mean reversion yeah when we talking about crypto there are terms that is not associated with the stocks is been appearing there like you know for example liquidity pool yield Farms how far you can uh get yield from some token in a particular time and these kind of things instead of trading sometime maybe providing liquidity could be more better or sometime it can be you can lose uh all your money like you know the sand bankman freed is been done for with the FDX talken he run away with I mean he is a kind of build a glitch that uh I mean he had some thousands of tokens and he sold one of the token for a billion so his total asset become uh he is for so I mean he showcased his asset is like, billion to the investors and got the money and build the things around that and you know in reality that money is not existing there so the how do you identify this kind of activity like you know means I mean if FTX is a kind of thing which is been actually back the um us election as well like you know the the this is the uh this is the way it is been went on how do we identify is is is there any way you found it is identifiable or is there a way you look into this kind of stuff the way the way I think about it is the crypto Market is still new relatively new I it's been around for a few years now few years now but compared to stocks it's still very new and so it's a little bit like the wild west you know you see the old western films Cowboys it's like crazy times right and so crazy things can happen like you know thefts like um scams fraud uh like rug pools like you know crazy things can happen whereas in stocks the markets are more regulated they're more mature less crazy stuff happens still happens but less you you still have stock Brokers go bankrupt every now and then doesn't again doesn't happen that often but it can happen in crypto you just want to acknowledge that it is still a immature market so there's still the risks that come with being an immature market and so you've got to think about counterparty risk you've got to think about catastrophic risk You' got to think about regulatory risk a little bit more so for example take regulatory risk the regulations around crypto are still evolving would I put all of my money into crypto no absolutely not that would be stupid yeah for example US market is actually wi listing some of the um cryptocurrencies for example Bitcoin and things like that like you know Federal Reserve is trying to move into yeah so that's positive regulatory moves but also in a in a new market there can be negative regulatory moves as well and so you know we need to basically allocate our Capital to ackowledge that there is more risk in one market than there is in another there's also more risk in um one token than maybe in one stock okay maybe not Bitcoin but small cap like small um uh small cap tokens yeah absolutely because most of them are worthless most have no value no utility or even if they claim this got some utility they got no no customer base it's just a hope and a dream that maybe one day it will mean it will make something so the price is very volatile because the value is uncertain mhm yeah because the peop who are holding uh maybe very less number like you know compared to so the market volatility is much more in the crypto token which is new to the market is yeah absolutely so what we've got to do is make sure that as a percentage of our total investing Capital what we put into any one token is not very much because if that token goes to zero we don't want to lose a big chunk of our account so my position sizing in crypto as a percentage of my entire trading accounts is very very small much smaller smaller than in stocks because I know that there's more uh ticker specific catastrophic risk in crypto mhh so I I always think about the risk first because risk is about survival you know it doesn't matter how much I make this year if I blow up next year I've got no money but if I survive first I never blow up then I can constantly grow my wealth MH so you how do you help a person who want to uh enter into the market for example somebody let's say x person is came to you with 100 USD and what percentage of how do you help him like you know will you tell him to put 90% of the money into the stock market and 10 per into the crypto and uh in in this 90 percentage uh uh 100 uh 80% will go to x uh stock and uh 5 percentage will go to Y stock and 2 percentage will go to is stock and same will go to the cryptocurrency as well how do you how do you help a person who is approaching you to um with some money to invest into the stock market as well as the crypto how do you help him yeah my my Approach is to teach the trader or the investor how to make those decisions for yourself and the way these are capital allocation decisions right and the way we allocate capital is we have strategies in each different market and those strategies make a certain amount of return have a certain amount of volatility have a certain amount of draw down potential and if we look across stocks in crypto and we look at all of the strategies we've got in each market we can create a capital allocation that meets our objectives my objective is probably different to your objective because we're different people we're different ages we have different family situations we have different job situations so the first thing to do is understand your objectives you know how much money do you have what is your draw down tolerance how much activity do you want in your account what's your return objectives once you understand them then you start to tr to build a portfolio of strategies and and allocate Capital between them to best meet your objectives so to break that down you need several different or many different systems and then you combine those systems into a capital allocation model and adjust the weightings to meet your objectives if we do the same exercise we would end up with a different percentage for stocks and crypto and for each strategy in stocks and for each strategy in crypto because we have different objectives so my job is not to tell someone 10% here 90% here and within that 90% 2020 that's not my job my job is to educate someone so that they know how to make the decision forsel to best make their objectives so in that scenario how many peoples you have helped so far I've had I have several different programs in my stock mentoring program I've taken about 500 people through that program over several years I have uh around 80 uh people live in that mentoring program right now um on the crypto side several hundred have been through the the program um the crypto course [clears throat] is newer and I've had other courses in the past that have had you know many hundreds of people come through those courses as well what I teach all the courses I teach have evolved over time um but look over over the last several years I would say you know uh several thousand Traders have seen my stuff you know worked on my strategies learn from that and um and use that to improve their trading MH uh so when you're when we are talking about the tools that uh helps for the trading in the crypto or the stock do you use any sort of softwares because when I'm talking about the softwares uh what I understood as I have created my cryptocurrency almost 3 years ago and I started listing in the different exchanges I'm mean the liquidity pools I'm started to provide some little bit of liquidity and uh some these holders is been ground into a small size of community and stuffs like that so the idea is like you know so when I'm doing this thing I understood there are lot of hackers peoples are actually targeting the peop who are holding the crypto for example there are some scripts which is running in the background of your Javas I mean your browser that will actually con instally spy on you and take the data and what you are doing in your uh computer and it will send back I mean if you have a considerable amount of the crypto holding uh in your ballot and somebody could have found out in some way so I have made some N9 10 extensions in that way like you know to make the people uh feel secure about about their uh um hard earned money holding like whether it can it is earned smartly or uh hardly or that doesn't matter money is money right like I mean uh I mean if you have money it's you feel better if I have money I feel better I mean I mean there is nothing wrong in that like anyway so I have found out these sort of softwares that can actually protect people's from actually getting um attacked against them uh so is there any sort of softwar that you use in order to to or do you have you ever thought of building something think that helps you and your people in in a way of trading the things yeah there's a couple of bits of software um not so there's the security side which I think is is important for everyone you know whether you're investing in trading or or not you need to make sure your computer is protected that your privacy is secure that you don't have in my case I'm I'm I'm I'm a developer I'm not a you know I'm not an investor or a Trader in the crypto I develop the infrastructure around that like yeah so on the trading side um the software that you need is that's that's needed is the the back testing software so software like Amy broker like real test like wealth lab um trade station uh these sorts of uh softwares allow you to um to get the historical Market data to apply your rules to that data and see how that Strate would have performed over time you can back test the rules and see if they're profitable fine-tune the strategies optimize them adjust them so the back testing software is the most important thing for a systematic Trader whether it's stocks or crypto doesn't matter you need that because we need to be able to generate our signals we need to be able to test our ideas and check that the systems we're using are profitable the bank testing software does that you need software to get the data so um the for stocks there's commercial providers that that provide the historical data Norgate provides data for the US for Australia for Canada metastock data provides data for all of the exchanges globally and there's many other data providers as well there's quite you know there's quite a few different data providers for Indian stocks inside the Indian market um you need a data provider to give you the historical data and that that historical data needs to feed into your back testing software so you can test your ideas generate your signals beyond that you need your stock broking platform uh which is where you're placing the trades if you want to automate you need a um an automation engine or an API that links your back testing software to your broker so that the trades can be placed automatically you don't have to automate you can trade manually I have an automation it's a a built automation that links Amy broker to interactive brokers and and places trades and manages them for me and my students have have access to that as well so they're the main trading softwares that you need and then you know the obvious things like spread sheets to record your trades and and track your performance and all of those things as well so uh when people are approaching you to study about the stock trading you also help them to you also provide the access to the sort of applications which you are using right uh these applications are not mine they're off-the-shelf commercial um programs so I will say you need this software go buy it you need this data go buy it that's separate to me um I don't build software I build systems and strategies that go into the software so um so yeah I don't sell I don't sell the software but it's it's cheap commercially available very you know well supported uh good track record you know software it's not uh you a lot of people will try and build their own back testing platform it's a waste of time because there's already commercial software that does it for you that's that's way better than what the individual person could come up with um so I would just say you just choose practising software as I said I use Amy bro and real test they they're both great software wealth lab is great software um so you get that and then you just learn to use it MH MH see when we talking about the back testing software like you know uh if you look into the newly developed technological advancement we could actually see AI language models is been used and trained and used in the different aspect of the uh technological development around the finch industry um I mean China is coming up with some better ideas and they have already made some waves in the you know the stock trading already uh China had did uh something like that so I feel this is also very important thing right yeah I think it's becoming more and more important um at the moment AI in trading is a useful tool but is not replacing the traditional tools not yet um I think it's still got a long way to go um the way I use AI at the moment in trading is to help to come up with new ideas to brainstorm uh to make suggestions on how to improve uh certain aspects of performance um basically as a sounding board to test ideas with and so on [clears throat] that's it's very useful in that respect yeah exactly like you know AI won't give uh everything in uh in a boiler plate uh an expert is really required like you know to figure out what is right and what is wrong over there exactly yes yeah so I think there it's it's still very it's not AI there's no free money right there's no there's no free lunch you can't just as a newbie with no Trading experience type into an AI and expect to get rich in the markets it's not going to happen and it will never happen because the markets are a competition and the best win right so uh we need to use it as a tool but not put Blind Faith in it and expect that it's going to make us wealthy you know we need to learn the fundamental principles we of trading we need to learn how to manage our risk we need to learn how to allocate our Capital we need to learn how to develop a profitable strategy that is stable consistent robust um and and works over time and works across different markets we need to learn all of that and then AI can help us to to do some of that it can help us to come up with new rules that maybe we haven't thought of but we've still got to learn to be a Trader [laughter] so if any of the developers who is actually going to listen this particular podcast what uh would be an ideal uh software product that you will imagine that you could had that that doesn't exist yet like like a new software that is needed MH I [clears throat] mean this particular functionality can make your life much more easier maybe it could be a little bit of automation or it can be some sort of a spreadsheet uh spreadsheet manipulation stuff or uh it can fet some data and put it in some data dump or maybe some Crown job that will send you out the frequent messages to your inboxes or maybe some security thing that you could actually uh install around the trading station of you like you know maybe it can be a home station or an office station or anything that s any any one thing which you wish you would be having yeah it's interesting because most of the things that you said are there you know most is is available um I haven't I haven't seen a really great trade like a trade tracking and management software that takes the data from all the different Brokers and presents the performance and the results in a really neat flexible way that allows reporting for tax in Australia or tax in the US or tax in India like that allows you to easily manage all of the paperwork and all of that there's some things here and there there's some okay good packages but I think that's an area where there's still some opportunity um I think there's some opportunity probably in customizing and and interfacing with AI and and allowing traders to to uh interface with AI in a more useful way some kind of yeah some sort of API which will be feeding to the machine learning language which is existing in the back end and you will be able to communicate with so let's imagine in this way like you know you are having a system which is actually presenting the data from different markets and you are actually and uh along with that some sort of AI suction also coming up with that like you know that could be a better product do what do you think actually there's another one another another one that would be really interesting and that is um getting more time series data streams available easily so we have price data we have volume data uh very easily across all the markets but we you know we have some economic data easily but we you know that we don't have fundamental historical data cheap easily available you can get it but it's expensive it tends to be expensive um but what other time series data can we get that might be useful and valuable for testing system rules you know sentiment data been performed last year and before year like that um and I think that you know democratizing that or or you know making that freely available because most of those things are available but it's expensive you know big hedge funds have you know models and software that produces sentiment data that monitors tweets for different keywords and interprets News Real Time all of that but a lot of that information is not available yet at a sens price to the retail Trader you know I feel like there's some opportunity there to to make information more broadly available um I don't know how how profitable it will be because we haven't been able to test it because we don't have it but I would I would really like you know imagine some integration between Google search Trends Google like Google Trends uh Twitter Fe Twitter feeds and other social medias that um that tell us how many people are looking or or talking about a different stock or a different product or something like that I that sort of data could be something kind of a socially mining all the soci yeah now the challenge is you don't know it's useful unless you can get a Time series so you can test it m you might get the current you oh look today lots of people are searching for XYZ but you don't know whether you should take action on that unless you have that same data over time and then you can test it as a signal for your system so if we can get more different time series data then maybe we can generate some more interesting and unique strategies and uh and improve our performance that would be a good idea to look into basically so if somebody is listening to our podcast uh and uh in what way they can connect with you and why they have to connect with you sure the best way to connect with me would be through the website Enlighten stock trading.com uh and if you go to enlightened stock trading.com forfree uh there's some free resources to learn more about systematic trading you just put your name and email and there's some free courses in there some eBooks and some cheat sheets to uh help you stabilize and improve your performance and even a a trading strategy example which is all fully coded uh so I think that's there's some good resources and then once you are in uh in my uh in my world you know you'll you'll be in email contact and and uh then we can talk further I have courses and programs and everything but the best thing to do is to start you know with Enlighten stock training.com free learn about it see if you like that the approach that I have the systematic trading approach and if you do learn a bit about it and then over time we'll talkh uh so you will be available in your website email and everything that sort right like you know anything particular you use all the time like any kind of social media which where you will never miss an email in box or never miss an email High yeah uh look most I'm active on on Facebook Twitter um I mean you YouTube is not really interactive but I'm always posting content on YouTube but Facebook and Twitter are best um you can search enlightened stock trading uh just be careful make sure you're at the you're using the original ones there are some scammers around who try and you know cheat people by pretending to be me that's why I say the website because there's only one Enlighten stock trading.com and so if you go there then you can connect from there to all the social medias and people will see so thank you for being the part of the show today and it was a great uh uh it was a very good deep discussion which we had about the economics all together like you know anyway um so anything else you want to tell to the people who are listening to I would just say that if you're interested in tra in take the time to learn you know don't assume it's going to be easy money just CU you can easily buy and sell a stock or easily buy and sell a crypto doesn't mean it's easy to make money long term you need to learn like everything uh it's not like a four-year University degree but you do need to put in some effort to learn and the most important thing is to keep your risk low so that you can stay in the game and not blow up and lose all of your money if you can survive long term eventually then you can learn to to make money and build your wealth but too many people try and get rich quick try and get rich slow so that you don't blow up and lose everything that's my guidance yeah thank you for being the show thanks so much for having me Aron appreciate your time