Trading TLT Using Conditional Orders: Insights from SMBU’s Daily Video

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In our SMBU Daily Video, learn more about conditional orders.

In this video from Andrew Falde, you will learn:

How to set up conditional orders to control your risk when you aren’t at your screen
How to plan your trades for different scenarios and automate for each
Learn what qualities to look for in a stock, ETF, or Index that make sense for conditional order placement
We hope this video improves your trading.

SMBU Team

Volatility-Based Sizing

Andrew FaldeSystems TradingLeave a Comment

In running back tests, it’s important to understand the impact of volatility and position size. A consistent position size in number of shares or dollar amount can greatly skew historic results. If optimizing, this may lead to curve-fitting the system to periods of high volatility. Here are some examples of the impact of fixed-position sizing vs volatility-based sizing: The first … Read More

Duration: The Sixth Step to Systems Success

Andrew FaldeSystems TradingLeave a Comment

Number six in our seven steps is Duration. Duration represents the expected length of time in winning trades, losing trades, and all trades. Almost without exception we find that trend- and momentum-oriented signals have a shorter duration for losing signals and a longer duration for winning signals. The reverse is true for mean-reversion trades. Knowing your expected duration is important … Read More

The Fifth Step to Systems Success: Frequency

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Our fifth of seven steps for building, testing, and following a system is to understand the frequency of the system. Higher frequency increases profit potential, but it also reduces reliability. The two primary downsides of higher frequency are 1) transaction costs and 2) execution assumptions. In back testing you can assume buying every bid and selling every offer. But this … Read More

Step Four of Systems Success: Volatility

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Is volatility good or bad? Let’s look at it from the perspective of run ups—potential gains, and drawdowns—potential losses. And let’s not forget real gains and real losses. Never take your eye off the ball on what we are trying to do, which is to build a trading system that is statistically reliable so that over hundreds, or even thousands of … Read More

The Third Step to Systems Success

Andrew FaldeSystems TradingLeave a Comment

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Previously, we covered Risk and Return as the first two things we look at when building a system. The third thing we want to review is called Expectancy. The idea behind expectancy is to focus on the big picture and long-term results of your system — and not just the next trade. Insurance companies and casinos base their entire enterprise around this … Read More

Seven Steps to Systems Success

Andrew FaldeSystems TradingLeave a Comment

Most platforms that run automated back testing and trading systems have extensive reporting capabilities to analyze performance. In these reports the software developers have included seemingly every possible statistical metric they could find. Reading these line by line quickly becomes information overload and can often leave the systems developer with more questions than answers. So we have narrowed down the … Read More

Six Lessons on Systems Trading

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In my recent post, Confessions from a Discretionary Trader, I wrote how I was spending more time each day learning about quantitative trading. Today I attended the live taping of our new course, SMB Systems Foundation, with market veterans Rick Martin and Andrew Falde at our NYC headquarters. Here are the six most interesting ideas I found shared in this course from … Read More