My guest today is Peter Borish, the chairman and CEO of Computer Trading Corporation (CTC). He is also a partner in Adam Hoffman’s natural gas options trading team at Torsion Technologies, and an advisor to Norbury Partners. Previously, through CTC, Borish was the chief strategist of Quad Group and its affiliated companies. In addition, he helped traders develop a methodology to enhance their performance by serving as a trading coach. He formerly worked at the Federal Reserve Bank of New York, was a founding partner and second-in-command at Tudor Investment Corporation, was chairman of OneChicago, LLC, and was chairman of the non-profits Foundation for the Study of Cycles and The Institute for Financial Markets.
The topic is forex.
In this episode of Trend Following Radio we discuss:
Post the great recession; how has inflation changed the economy?
The trading perspective
The current state of our monetary and fiscal policies
I’ve read everything (about market/trading), know all the technical techniques, to a point where I went into “analysis paralysis” state for two years. I came from nothing, lost everything which is nothing to most people, I have run my accounts 1000 percent only to lose 80-90 percent of every time. That happened about 6 times in 8 years and I’m 24. All I know is market and price action. After I read your book (5th edition) and Ed Seykota books. Those helped me get across the paralysis state. Market and psychology are the same I know it deep down. Price is a reflection of human behavior which can be predicted. I just wanted to thank you.
Michael, My greatest challenge has been what you discuss so well in Chapter 6: Human Behavior of Trend Following. Sincerely, Arne V.
Do you have a system now?
Yes, I do. My strong influences have been Dennis Wyckoff & Mark Shawzin, and of course your book. I utilize essentially naked charts and assess the market using three charts; Daily, H1, and 15M for refined execution. I trade session to session and am flat the market no later than 1:00 PM PST. 3.5 trades/day average. My hang-up has been summed up in the quote from your book, “The real pattern they miss is the pattern of acting with complete confidence to make decisions right or wrong in the face of the unknown.” Thank you for writing Trend Following. It has been immeasurably valuable.
Thanks for the nice words. But here comes some hard truth. Trend following is not hourly or minute bars.
Thank you for your forthcoming words. I completely understand what you mean, however, aren’t trends really a function of time? I agree smaller time frames are noisy compared to daily, weekly, and monthly charts for sure. Regardless, I believe that the trend following principles you so succinctly describe in your book still apply to me. They have helped me so much. By naked charts, I simply mean few to no technical indicators, just price action. Thanks again.
Trend following uses money management and portfolio strategies. 15-minute bar trading is something else, not trend following. Read.
Hello Michael, My two biggest failings: 1. Failure to cut losses, otherwise known as failure to honour stop-loss levels; otherwise known as “fear of missing the turn” 2. Position size discipline. I’ve been trying to trade for some time. However, “life keeps getting in the way.” Poor excuse but it is a reason. The result is that I don’t trade for long enough periods to develop a set of rules worth following and hence tend to be scatter-gun in my choice of buying/selling levels. And that leads to poor results.
Your system is now?
I mostly follow two strategies: 1. Supply/demand = unfilled order locations revealed by price action. Sam Seiden methodology first taught through the Online Trading Academy, now Sam is The Pinnacle Institute. This seems to me a logical explanation of price action. Trends are part of the diagnostics and the trick is to spot those sites of unfilled orders on the price action. Few trades but commonly larger R:R. Their view is less than 3:1 is not a good trade. 2. Trend-Signal “Sniper” buy/sell signals. They generate proprietary buy/sell signals using multiple price action based inputs. They don’t publish their algorithm. They encourage the use of ATR as targets and recent price action for SL. They trade more frequently than #1 but have lower R:R ratios each trade. They move SL to follow trends to extend trades beyond ATR if they’ve caught a turn into a new up/down trend. Both encourage set/forget with Entry, Stop, Target setting. Moving SL in #2 is part of their aggressive/advanced strategy but obviously requires paying attention to the trade. Both can be applied to Forex, Stocks, Cryptos. #1 is also applicable to Futures and Options, but these are not traded by #2. My failure to get either to work for me, whereas their published track records are stellar (both show >50% success rate), means I’m stuck in the Trough of Disillusionment of the Gartner Cycle with both systems currently. The problem is with me, not the systems. I’m not convinced by “Technical Analysis” indicators as predictors.
I would simplify and go trend following. Resources to start are below.