Having the right fundamental information will never guarantee success. Ray Dalio, one of the biggest traders on Wall Street says he trades off of fully automated fundamentals. If this is true what fundamentals does he choose to automate? In the same head space a reader forwarded Michael a tweet recently. It was a tweet from an executive associated with a big USA trading firm. This executive was asked by a business student, “What does a typical week look like for you?” His list went like this [Michael digs in]… How much time is being wasted?
If consuming that information isn’t needed then what do you use to trade? One piece of information – price. You take the price and look at the trend. Things in motion tend to stay in motion. Forming rules that you can stick to when the big trends come is key to anyone’s trading success.
Art Collins is author of “Beating the Financial Futures Market: Combining Small Biases Into Powerful Money Making Strategies”, “When Supertraders Meet Kryptonite”, “Market Rap: The Odyssey of a Still-Struggling Commodity Trader” and “Market Beaters.” He has been trading systematically for the past 30 years.
How was Art Collins able to get Richard Dennis, Bill Dunn, Bob Pardo, Mike Dever and Larry Williams (to name a few) to talk? He made the interviews more like a partnership, than an interview. He made an impressive name for himself which led to positive word of mouth spreading.
What does robustness mean to Art? He uses four rules for prudent testing: 1. Don’t settle on your best result if it is a “diamond in the rough”. 2. Strategies should test well in various markets, particularly similar ones. 3. You don’t want your results to be bunched up in limited time frames. 4. Stay focused on testing concepts you understand in the markets.
Throughout the years Art wasn’t only focused on trading markets. He also studied how to beat the blackjack table and how to skew the odds in his favor when betting on sports. Trading football lines, and trading the price of stocks – what’s the difference? There isn’t much of a difference when you take a technical and systematic approach to them. It’s about keeping emotions out of it. He never wanted to be a cowboy trader or thought of as a “genius”, he just wanted his systems to work. Michael and Art spend the rest of this episode diving into card counting, mechanical systems, gambling on football, data mining and the fools errand of making $1,000 a day.