Trading Strategies/Risk Management/Mercado de Divisas

[T Squared Trading]

Hello, my name is Terry Thompson. I wanted to briefly introduce myself to the members of this forum. My company designs and leases some of the most successful mechanical trading strategies for the currency market. We place a strong emphasis on risk management and position sizing. In addition, we also provide market commentary.

My firm intends on posting to this forum occasionally to share our market thoughts and to answer any questions pertaining to strategy trading and risk management.

I appreciate your time, and am looking forward to assisting the members in understanding trading strategies and using risk management more efficiently.


Hola, mi nombre es Terry Thompson. Quiero presentarme brevemente ante los miembros de este forum. Mi compañía diseña y renta algunas de las estrategias mecánicas más exitosas en el mercado de divisas. Hacemos alto hincapié en el manejo de riesgos y del tamaño de las cuentas de nuestros clientes. En adición, proveemos comentarios acerca del mercado.

La intención de mi firma al poner un aviso en este forum es compartir nuestras ideas e inquietudes y responder cualquier pregunta acerca de estrategias de operaciones y/o manejo de riesgos.

Gracias por su tiempo y espero poderles asistir en el futuro

 

[fxmarkets]

Welcome Terry, may your grease nipples forever remain well oiled.

Whats your method of entry based on?

 

[T Squared Trading]

Welcome Terry, may your grease nipples forever remain well oiled.

Whats your method of entry based on?

Hi fxmarkets,

Thank you for the warm welcome....I hope your nipples remain well oiled, as well.
To answer your question:
All of our strategies are based on proprietary algorithms that use math based entries and exits. I can't stress enough, though, the key to any mechanical trading is using proper risk management.

Thanks again fx,
T2

 

[fxmarkets]

Thank you T2 , look forward to reading any more of your strats.

best with it..

Fx.

 

[T Squared Trading]

Question For Members:

We have looked at many threads on t2w, and are trying to get a feel from the members as to what type of advice would be most beneficial to everyone. In addition, which format would be most effective, i.e. question-answer, daily posts, intra-day posts, etc?

Thank you in advance,
T2

 

[wasp]

We have looked at many threads on t2w, and are trying to get a feel from the members as to what type of advice would be most beneficial to everyone. In addition, which format would be most effective, i.e. question-answer, daily posts, intra-day posts, etc?

Thank you in advance,
T2

As long as you don't try to come across as the next messiah you will do fine. Post anything as and when and people will join in and discuss worry not.

Oh, and welcome to T2W!

 

[fxmarkets]

We have looked at many threads on t2w, and are trying to get a feel from the members as to what type of advice would be most beneficial to everyone. In addition, which format would be most effective, i.e. question-answer, daily posts, intra-day posts, etc?

Thank you in advance,
T2

i'd like to see presented reasons for taking the trade, whats the mechanised maths saying in terms of human behaviour which drives the market. this on a basis, timewise that you are comfortable maintaining based on the mechanics of the signals, dictating information updates to the users of the information in a very timely manner, I mean no use giving a target objectives if the dynamics of the mechanics says update, 10 mins after it has.

if you follow my point.
Fx.

 

[rols]

As long as you don't try to come across as the next messiah you will do fine. Post anything as and when and people will join in and discuss worry not.

Oh, and welcome to T2W!

This is my phrase (and you're welcome to use it) and is in fact a paraphrase of 'Messiah for amateurs' which unfortunately seems to be becoming an altogether frequent occurrence on these 'ere hallowed boards. Why is it that the FX markets are riddled with these false prophets more than other markets. I suspect because there is a seemingly elitist purity about FX trading and a false premise that these markets can be tamed by logical positivism and mathematical BS. Well IMHO all markets are all same and all are driven by human beings buying and selling. So why the mystique and fancy titles? We are all the same and yet at the same time unique as individuals. This is where I believe the confusion lies.....

 

[wasp]

This is my phrase (and you're welcome to use it) and is in fact a paraphrase of 'Messiah for amateurs' which unfortunately seems to be becoming an altogether frequent occurrence on these 'ere hallowed boards. Why is it that the FX markets are riddled with these false prophets more than other markets. I suspect because there is a seemingly elitist purity about FX trading and a false premise that these markets can be tamed by logical positivism and mathematical BS. Well IMHO all markets are all same and all are driven by human beings buying and selling. So why the mystique and fancy titles? We are all the same and yet at the same time unique as individuals. This is where I believe the confusion lies.....

You, you are the Messiah! and I should know, I've followed a few!

 

[Directional]

Welcome.

Automated strategies are obviously of interest to most traders. However, posting a "well chosen" chart showing beautifully optimised entries and exits to impress the newbies with no forthcoming explanation of how and why the entries and.or exits were selected will ultimately be met with derision by most members.

Obviously if your methods are proprietary, fair enough, most experienced traders do not expect to be given a free lunch, but equally you cannot expect a free lunch if you try to post such material without explanations - covert advertising attempts usually backfire.

Any non-proprietary stuff you wish to invite comment on will surely be of interest. I for one would certainly be interested in hearing about your money-management techniques - for instance, if you have a definable "edge" how would your systems manage money to maximize capitalization of the edge while minimizing risk? do you use optimal f in position sizing, or a risk adjusting variation such as "secure f" etc? ATR in determining stop placement etc. all of interest.

Grassy ass.

 

[rols]

You, you are the Messiah! and I should know, I've followed a few!

I take all the major credit cards. Enlightenment and untold riches guaranteed or full refund.
Pay now and get 10% discount and free e-book. Hurry though, only 12 places available!

 

[wasp]

I take all the major credit cards. Enlightenment and untold riches guaranteed or full refund.
Pay now and get 10% discount and free e-book. Hurry though, only 12 places available!

What? No strimmer?


(Sorry, do carry on T2)

 

[rols]

What? No strimmer?


(Sorry, do carry on T2)

.....and no sythe. Ask the grey one about that....

 

[T Squared Trading]

As long as you don't try to come across as the next messiah you will do fine. Post anything as and when and people will join in and discuss worry not.

Oh, and welcome to T2W!

Hello chrisw,

Thank you for the greetings. Please be rest assured, we will do our best not to come across as "the next messiah." We are traders just like everyone else that participates in these forums. As corny as it may sound, however, we feel truly blessed to have the knowledge and expertise in the extremely difficult enigma known as the currency market. With that said, though, we expect and invite praise and criticism.

T2

 

[T Squared Trading]

i'd like to see presented reasons for taking the trade, whats the mechanised maths saying in terms of human behaviour which drives the market. this on a basis, timewise that you are comfortable maintaining based on the mechanics of the signals, dictating information updates to the users of the information in a very timely manner, I mean no use giving a target objectives if the dynamics of the mechanics says update, 10 mins after it has.

if you follow my point.
Fx.

Hi fxmarkets,

Great point. Yes, human emotion does drive the market. For example today, some CBS personnel were killed in Iraq . The dollar is currently dropping as I write this. Is this due to the events in Iraq…..possibly? Can we quantify crowd behavior on a mathmatical basis….Definitely! Many fields do this, marketing research, psychology, medicine, etc. All of these occupations use models that break down behavior into a mathematical model. Our strategies do the same.

Thanks,
T2

 

[T Squared Trading]

Welcome.

Automated strategies are obviously of interest to most traders. However, posting a "well chosen" chart showing beautifully optimised entries and exits to impress the newbies with no forthcoming explanation of how and why the entries and.or exits were selected will ultimately be met with derision by most members.

Obviously if your methods are proprietary, fair enough, most experienced traders do not expect to be given a free lunch, but equally you cannot expect a free lunch if you try to post such material without explanations - covert advertising attempts usually backfire.

Any non-proprietary stuff you wish to invite comment on will surely be of interest. I for one would certainly be interested in hearing about your money-management techniques - for instance, if you have a definable "edge" how would your systems manage money to maximize capitalization of the edge while minimizing risk? do you use optimal f in position sizing, or a risk adjusting variation such as "secure f" etc? ATR in determining stop placement etc. all of interest.

Grassy ass.

Hello Arbitrageur,

We really appreciate your advice on properly posting on such a respected forum. As we said in our initial post, we are trying to educate, and ultimately earn the trust of fellow traders.

We update our charts daily on our website, and on a quarterly basis have an accounting firm audit the results of trading with real money to validate “what you see is what you get.” The math behind the entries and exits is our proprietary information. We do not use technical indicators etc. therefore cannot point to a MA X. Like Jesse Livermore, etc. we have learned how to quantify the tape.

As I keep stressing like a broken record, the most important aspect of all trading is risk management and money management. Even our strategies without money management, is pure gambling. This is the reason why we devote time and space showing examples of money management on our site. A mechanical strategy is just a starting point, it is a framework that gives you the parameters with which to develop your risk management and money management rules. How can you properly manage positions etc without a strategy? We do not use optimal F.

Thanks again arb and look forward to a continued dialogue.
T2

 

[T Squared Trading]

We appreciate the feedback. We will start posting market calls, ideas, etc. from roughly 8 of our proprietary mechanical trading strategies, momentarily.

Thank You,
T2

 

[TWI]

T Squared Trading,

I would be interested in specifics of how you size trades basis equity invested in a single market and also how you size across correlated and non-correlated markets so distributing risk across a portfolio. I think this will be infinitely more valuable than you posting initially unsubstantiated market calls as you threaten to start doing above.
Unless we can understand something of your methodology and aforementioned linchpin money management then I do not believe that directional calls have much value.
You say you do not use optimal F, then what do you use? fixed frac, fixed ratio, kelly? some new and until now unknown wonder. Always keen to hear new ideas on these subjects and looking forward to being enlightened.

 

[T Squared Trading]

Hello T Walker,

Thank you for an educated posting. I must say, I've posted on 2 other boards, and have been greeted by an extreme amount of skepticism, primarily due to our performance reports on the site. In addition, I'm sure the skepticism is based on the fact that this industry is littered with lets just say, not the most honest people in the world. I appreciate the educated postings on this forum.

My partners and I are still entertaining the idea of posting some live calls, but have some reservations. The reason why is this (I posted this on another board, as well):
This may not be the most accurate way of measuring the efficiency of a trading system. As you may have seen on our site, we are currently leasing 8 different strategies to our clients (actually 4 individual strategies, and 1 portfolio of strategies). Each strategy has specific risk management and position sizing parameters built within the framework. This is necessary in order to “lay off the gas pedal,” when things are going poorly, and to add to your position when the strategies and your account size warrant it.

Secondly, let's just say, we post 25-30 live market calls. That would cover signals for approximately 10-14 trading days. Now, let’s say, hypothetically, our systems produce a combined 150 pips profit. What does this prove? This is such a small period of time, it would be inaccurate to pass judgment on any system, good or bad. Check out Barclay’s website, and look at some of the world’s top hedge funds performance charts. You’ll notice that some of the top traders in the world such as John Henry, have draw-downs of over 40%. How is this tolerated by investors in his fund? Proper risk management, and his performance shows over time that he not only makes up that 40% but ends the year up another 20-40%

Please don’t misconstrue what I’m saying. I’m not comparing my company to John Henry’s. What I am saying is that our money management and risk management techniques are calculated just like the “big boys.” Take a look at the strategy, The Yen Optimizer. If you made up your mind to disregard it after trades 20-30, look at what you would have been missed.

I just wanted to put that out there, and I will touch on your questions regarding the risk management, momentarily.

Thanks,
T2

 

[tm.appleby]

Hey they don't keep accusing you of being other people do they?

They do with me.

I wouldn't post live calls if I were you. And whatever you do, don't get it correct. They say things like "It's bad trading" It's irrelevant.

Anyway good luck