In 2018 I updated this website to reflect more accurately what I do.
If you haven’t been here for a while you’ll notice a couple of things;
- More information for trader education,
- More mechanical models and
- A “Shop” where traders can purchase a complete model/solution for their trading education.
The simple reason there is more educational information and more models is that for years I did the bare minimal to maintain a website.
This minimalist approach stemmed from my reluctance to touch html code.
In 2001 when I first put up my website I did it in Microsoft’s FrontPage. Although Techies weren’t favourable towards FrontPage I loved it for the simple reason I could use it!
However, in 2014 when Windows XP was assigned to the dust bin I was forced to update to Windows 7. That wasn’t a problem until I realised that many of my old software programs (including FrontPage) no longer worked …. aarrgghhh. :o(
So I was forced to rebuild my website from scratch and I choose Dreamweaver. Many have asked why I choose Dreamweaver over WordPress and my simple answer was ignorance. During the early 2000s Dreamweaver was considered one of the most popular website programs available so I went with what I knew. It wasn’t as easy as FrontPage, but I had to have a website so I persisted with it becoming a self-taught html coder! Whenever I had to update my website it always gave me the heebie-jeebies as I knew I’d have to give myself another html refresher before I began. :o(
I was very reluctant to touch my site.
Since 2014 I’ve received numerous emails questioning my use of Dreamweaver.
In 2018 I came across an article discussing how popular WordPress was and why. I was impressed it was being used by over 30% of all websites. That got me curious and here I am. :o)
I’m possibly showing my age but I’ve eventually dragged myself into ecommerce.
Due to the ease of using WordPress I’ve been happy to include additional information for trader education (Starter Model, Starter Portfolio and Starter Account) and make available the models that I had only previously made available through my Workshops.
I hope this website holds together and you don’t find too many bugs or broken links. If you do please accept my apologies now and if you have the time I’d love to know where any bugs are! You can contact me via my CONTACT page. And many thanks for taking the time to drop by and check out my site. :o)
Strategy Development – A History of Failure
It’s an unfortunate reality that the field of technical analysis is better known for its failures than its successes. With over 90% of active traders losing it paints an unflattering picture.
Its landscape is littered with more failed methodologies and trading strategies then you can hope to count. Approaches that only ever looked good on a few well-chosen charts. Curve fitted and data mined strategies with too numerous and too overly optimised variables. Methodologies without any anchored reasoning. Techniques absent of any shred of evidence they had ever worked in the past, let alone hope to work in the future. Failure wherever you look.
Despite the marketing hype it’s rare to find methodologies that survive past their release date. Good, out-of-sample, robust performance is a scarce commodity in the world of trading. Unfortunately, many traders believe the answers are found in complexity and shun the idea of simplicity, to the detriment of both their wallets and soul.
Although my models are not perfect, they do have a tradeable edge, and as you’ll see on my site they do have plenty of positive out-of-sample performance past their release dates, a very rare commodity in the field of strategy development.
Education and Trading Models
Education and trading models are two of the same.
“Model” is just a nice capsule to encase a complete approach to trading, from identifying times where it’s appropriate to trade (the set-up), to where a trader should buy and sell (the entry), to where they should exit if they’re wrong (the stop) to where they should the leave the market with their profit (the exit).
So although you’ll see references in books and on the internet about “models”, “strategies”, “systematic”, “mechanical”, “algorithmic”, “quantitative”, “robots”, “methodologies” etc it is all one and the same.
They’re just referring to a complete approach to trading, from set-up to entry to stop to exit.
They’re just an alternative clever “label” to describe;
- trading education, or
- trading knowledge or
- trading methodology or simply
- “how to”.
I began educating others in 2001 with the release of my first model IndexTrader.
I released IndexTrader in 2001.
IndexTrader was originally called SpiTrader.
In 2003 I renamed SpiTrader IndexTrader.
SpiTrader was a short-term index trading model that consisted of eight patterns.
The reason why I renamed the model IndexTrader is an interesting story and one that traders will be pleased to learn as it goes to support the robustness of the model’s simple methodology.
In a nutshell, I originally developed SpiTrader to trade the Australian SPI200 index futures contract. Following its release, I received numerous emails enquiring whether SpiTrader worked on other indices. I decided to collect the futures data and run SpiTrader over the Hang Seng, Ftse, Dax and E-Mini SP500 contracts.
To my surprise and amazement, SpiTrader made money (hypothetically) on all those markets!
After I settled down following this discovery I decided to look at how each of the eight individual pattern performed on the international indices. What it revealed was that half the patterns performed well across all indices while the other half only worked on the SPI. This led me to believe the non-performing patterns were uniquely SPI orientated.
I then asked myself a question. If I had the choice between trading patterns that worked across multiple markets or trading patterns that only worked on a unique market, which patterns would I prefer to trade?
It didn’t take me long to realise I would prefer trading patterns that were robust across multiple markets, especially if those indices were “out-of-sample” markets.
Consequently, I decided to remove four patterns, add four markets and rename SpiTrader IndexTrader to both reflect it’s robustness over out-of-sample global indices and to give the model a wider appeal to international index traders.
SpiTrader’s transformation into IndexTrader validated the robustness of its simple methodology.
You see, the majority of trading systems are developed with the benefit of observing a particular market/s they’re designed to trade. Traders look backward, observe a particular behaviour and then design a system to “capture” that behaviour. Without observing a market traders would not be able to develop an idea to test. This is what people refer to as “curve fitting”. Curve fitting will always exist, however experience traders look to minimise it while less experience traders leverage it, over tweaking variables to produce picture perfect equity curves.
In addition, traders fall into the trap of “data mining”, looking to trade their strategies on the best markets available. I had inadvertently done that with SPI, but in my defence, it was the only market I traded at the time!
In addition, what is extraordinary and therefore pleasing for traders who are considering IndexTrader, is that the model was designed without any “curve fitting” or “data mining” as it was developed solely for a single market, the Australian SPI200 index futures contract, but now trades a global portfolio of nine indices;
- Hang Seng
- Ftse and
- E-Mini SP500
So as you can see the story behind IndexTrader is that it came about by accident and not by design and the benefit of this is that it provides a best practice out-of-sample test and validation of the model’s simple, yet robust methodology.
IndexTrader’s four patterns became the foundation model behind my newsletter IndexALERT.
I began publishing IndexALERT in 2004.
Over the years publishing IndexALERT I have modified, refined and improved IndexTrader’s original four patterns and added a fifth from my original SpiTrader model. I didn’t release the refinements or extra pattern as part of IndexTrader but kept them for my newsletter. Along the way I’ve also contributed additional patterns to the larger model behind my newsletter. In 2015 I named the portfolio of patterns behind IndexALERT as “Idx24”. In 2015 I shared Idx24 for the first time to my workshop students. 2015 was the first time I taught the refined IndexTrader patterns that IndexALERT trades.
So IndexTrader today is the new and shiny version of its original self that I’ve been trading as part of IndexALERT’s portfolio of patterns.
IndexTrader continues to perform well since its release in 2001.
I began publishing IndexALERT in 2004.
IndexTrader’s four patterns became the foundation model behind IndexALERT.
Over the years publishing IndexALERT I have modified, refined and improved IndexTrader’s original four patterns and added a fifth from my original SpiTrader model. I didn’t release the refinements or extra pattern as part of IndexTrader but kept them for my newsletter. Along the way I’ve also contributed additional patterns to the larger model behind my newsletter.
In 2015 I named the portfolio of patterns behind IndexALERT as “Idx24”.
In 2015 I shared Idx24 for the first time to my workshop students.
2015 was the first time I taught the refined IndexTrader patterns that IndexALERT trades.
I’m a little different in this newsletter/tip sheet publishing business as;
- Every recommendation is actionable/tradeable. I don’t sprout opinions or generalisations. IndexALERT is not an “infotainment” newsletter.
- I trade everyone of my own recommendations and
- I share all my fills with subscribers, for both the winners and losers!
In Australia, I beleive I’m the only newsletter publisher of an active trading newsletter/tip sheet who actually trades their own recommendations and shares their fills.
Key Level (2008)
I began developing Key Level in 2007 following a poor 6-month performance with IndexALERT.
By March 2007 IndexALERT was into its 6th month of drawdown. As you can imagine it wasn’t a comfortable time however it got me thinking about diversifying my trading. I wanted to diversify my trading across all three dimensions:
– strategy and
For timeframe, I wanted to diversify and compliment my short-term index trading so I choose medium-term.
For strategy, I wanted to diversify and complement my predominately short-term mean reversion strategies so I choose trend-trading.
For markets, I wanted to diversify and compliment my index portfolio so I choose the currency markets.
I was particularly focused on developing a sound medium-term trend trading strategy as I believed the enduring bull market in equities at the time would prolong the continuing contraction in market volatility, which was impacting IndexALERT’s results.
So I got thinking about developing a medium-term trend trading methodology for currencies.
I concentrated my focus and energy on developing a retracement trend trading approach.
Those efforts resulted in Key Level which I released in 2008.
At the same time, and for the same reason I was developing Key Level in 2007, I was developing a medium-term trend trading straetgy for the indices.
Those efforts resulted in BBTT (Back to Basics Trend Trading) which I released in 2008.
BBTT is a multiple timeframe retracement trend trading methodology.
I stopped trading BBTT and removed it from sale following the development Key Breakout which evolved into a superior strategy for the indices.
Key Breakout (2009)
Following Key Level and BBTT’s release in 2008, and thinking about the motivation behind it, I decided I should be proactive and give thought to developing another strategy that could help diversify me against possible strategy degradation that may happen in the future. I thought it best to get on the front foot rather then be reactive if my combined index and currency trading struggled.
At the time I was both trading global indices and currencies, and I was happy to continue with the same portfolio. So I thought it best to diversify my currency trend trading by developing an alternative and complementary trend trading methodology.
Looking at market structure I knew I was capturing one section of market behaviour with Key Level and BBTT’s retracement trend trading approachs. Consequently, I decided to focus my concentration on developing a sound breakout trend trading methodology.
These efforts resulted in Key Breakout which I released in 2009.
Key Level and Key Breakout became the foundation strategies of my currency newsletter ForexALERT which I began publishing in 2009.
In 2009 I launched ForexALERT to be a sister newsletter to IndexALERT.
Key Level and Key Breakout were the initial strategies behind ForexALERT.
Key Swing (2010)
Following Key Breakout’s release, I was into the swing [:o)] of developing medium-term trend trading methodologies.
With Key Level, BBTT and Key Breakout, I had two significant areas of market structure covered for trading the currencies, entering trends following a retracement (Key Level and BBTT) and entering trends following a rally (Key Breakout).
What I didn’t have was a mean-reversion swing trading methodology.
So during 2009, I applied myself to the task of developing a swing trading strategy.
These efforts resulted in Key Swing which I released in 2010.
Key Level, Key Breakout and Key Swing were all developed for the currency markets and in 2010 became the models behind ForexALERT.
Key Exhaustion (2010)
Following Key Swing I developed Key Exhaustion.
Key Exhaustion was originally called Dual Reversal Point.
I released Key Exhaustion in 2010.
While Key Swing was designed to capture significant mean-reversion swings that occurred inline with the trend I didn’t have a strategy for identifying trend terminations.
I didn’t have a top picking or bottom picking system.
I know its never ideal to try to catch a falling knife however it was a part of market structure that I wasn’t trading.
Key Exhaustion became my knife catching and top picking strategy.
Like Key Level, Key Breakout and Key Swing, Key Exhaustion was developed for the currency markets.
In 2015 I collectively referred to my three medium-term trend trading currency models as “Fx24”.
- Key Level
- Key Breakout and
- Key Swing
[Note: In 2018 Universal Trader and Fx24 became one and the same collection of strategies. Please see below.]
In 2015 I collectively referred to the portfolio of short-term index strategies behind my newsletter IndexALERT as “Idx24”.
Idx24 is only available through attending my Workshop.
Universal Trader (2015)
During 2013/2014 I spent considerable time and effort developing a universal trend trading approach that could be applied to a diversified portfolio of markets.
From my research and efforts, I developed a dual multiple timeframe approach to trend trading.
- Key Day – A short-term breakout trend trading model, and
- Key Week – A medium-term breakout trend trading model.
Both Key Day and Key Week evolved from my Key Breakout strategy.
Collectively they became known as the Universal Trend Trader (UTT);
- Key Day
- Key Week
During 2016 I discovered Key Level and Key Swing, two of my currency medium-term trend trading methodologies, also worked well on the out-of-sample portfolio of diversified markets. Not only underscoring the soundness of each methodology but also validating their robustness! As a result I decided to add both strategies to UTT’s portfolio of models.
In addition, I wanted to align UTT’s timeframe to medium-term. To achieve this I decided to incorporate Key Week into Key Breakout, making Key Breakout consist of two patterns, and remove Key Day (being short-term).
Consequently in 2018 UTT’s portfolio of medium-term universal trend trading strategies became;
- Key Level,
- Key Breakout and
- Key Swing
Each strategy attempts to capture a different section of market structure.
Key Level is a retracement trend trading approach. It looks to enter the market following a retracement.
Key Breakout looks to enter the market following a strong move, either to the upside or downside.
Key Swing looks to capture mean-reversion movements align with the underlying trend.
I also decided to add Key Exhaustion. Even though it was an immediate-term strategy it’s counter-trend top and bottom picking methodology complimented the other trend trading strategies, smoothing out the combined equity curve and dampening drawdowns.
With the inclusion of Key Exhaustion I renamed the collection of strategies as “Universal Trader”.
Together they collectively, in my opinion, represent possibly the best solution for sustainable trading there is. Full stop. Period.
Universal Trader and Fx24 (2018)
In 2018 Universal Trader and Fx24 became one and the same as they both comprise;
- Key Level,
- Key Breakout and
- Key Swing
- Key Exhaustion