Trading Archive

Click here to view on YouTube.

This video is a recording of webinar on “How to Design Quant Trading Strategies using “R”? conducted by QuantInsti on 11th December , 2014 . The webinar aimed at introducing the concepts of Algorithmic Trading and exploring-
1. ” R” as a platform for strategy back testing
2. Optimizing Strategy parameters using “R”
3. Back testing the strategy across asset classes on “R”

The webinar was taken by Mr. Anil Yadav, who is a co-founder of iRageCapital and QuantInsti, manages an Algorithmic strategy advisory team at iRageCapital and is responsible for building and benchmarking strategies for the clients across various asset classes. Prior to iRage, he has worked as Convertible Analyst at Lehman Brothers. He is IIM – Lucknow and IIT – Kanpur Alumnus.

QuantInsti (QI) is the pioneer institute in providing training programs based on High Frequency Trading & Algorithmic Trading to both individuals as well as leading institutions like banks, institutional brokers and hedge funds. It has already seen many batches successfully completing their training programs and now actively contributing to the industry after getting placed in leading institutions or while working on their own algorithmic trading desks.

Download Slides:…

Please feel free to contact us at +91 22 61691400 or +91 9920448877 or you can even write us at, for any queries you might have.


QuantInsti is a pioneer training institute to learn algorithmic trading –
Know more about QuantInsti’s Algorithmic Trading Course –

Zen and the art of trading

Posted August 10, 2016 By

by Rachael Boon

Nabil Mattar, who meditates every morning, says trading is not just about making big bucks

It might seem unusual to associate meditation with the dapper Mr Nabil Mattar, who is dressed in a crisp white shirt and dark blue suit for this interview.

But meditation has played a major role in his personal trading skills, and is something he practises for 10 minutes every morning before his work as a director of premium client services begins at foreign broker IG.

Mr Mattar, 34, says: “It helps you to centre your mind. A lot of people don’t see the link to trading. For example, if you made a loss or gain yesterday, you can’t be emotional the next time you trade. Emotions skew things otherwise.”

He started mediating 18 months ago, and notes it’s something that billionaire hedge fund managers like Mr Ray Dalio also practise.

Mr Mattar finds that meditating with the aim to master his personal trading skills ties in very much with a Japanese philosophy called the Art of Zanshin that he subscribes to.

He describes it as “where one learns how to fall in love with the boredom of doing work and embrace each piece of the process instead of being too obsessed with the end result”.

He discovered Zanshin – which also refers to “being in a state of relaxed alertness” – while reading a book about the “samurai way of trading” six years ago.

“Like a skilled archer, if we put the intensity, focus and sincerity into the process, then hitting the bull’s eye is simply a side effect. This example applies exactly to trading as well. It’s the process you enjoy, and it’s not just about making big money.

“People cannot be too emotionally attached to the objective of making money, but should instead put the attention to the strategy and managing our own psychology.

“The reason why it is so difficult is because our lives revolve around results and money often, so how is it possible to detach yourself emotionally? That is where the constant psychological battle as a trader lies.”

Mr Mattar enjoyed retail trading so much that he quit his banking job in 2008 to pursue it full-time, but returned to a regular job to build his capital.

He is accustomed to doing things differently from everyone, and even joined the My Paper Executive competition in 2013 – which looks for exceptional young working executives – and finished third.

Contrary to popular belief that trading in the markets is high-risk, “the biggest risk in trading is yourself”, says Mr Mattar, who prefers trading foreign exchange and indexes. “You have all the tools to manage your risk such as guaranteed stop-loss orders, but if you don’t manage your risk in yourself, you can end up ‘killing’ your trades.”

Mr Mattar manages his risk by setting a maximum loss of between 1 per cent and 2 per cent, and a maximum drawdown of 10 per cent, among other things, for his personal portfolio. “Once I lose more than 10 per cent, I stop trading for a while and review things. These are risk-management techniques that you need to use.”

The strategy he has honed over the years for himself gives him an edge over the markets,says Mr Mattar, but results came only after his “psychology matured as a trader”.

“This comes with blood, sweat and tears, not chasing the markets, but learning how to refocus after a bad decision, knowing when to cut losses, which are all psychological elements of trading that are so important. I can say that trading is 70 per cent psychology.”

Q Moneywise, what were your growing-up years like?

A My dad was in AIA for 30 years as an insurance manager, my elder sister Juliana and I were quite fortunate to grow up in an upper middle-class family. He always said not to keep up with the Joneses.

I’ve no debt and will think twice about buying a house. A lot of people here are “asset-rich, cash poor” but the assets aren’t really assets because they are still paying for them.

Q How did you get interested in investing and trading?

A I started when I was in Singapore Management University, and bought stocks like Genting when there was a lot of talk about the casinos. I also bought some China stocks like China Hongxing Sports which is still suspended since it stopped trading five years ago. There was a time my portfolio was up 20 per cent when I was younger, but I kept holding on, and the 2008 crisis came and I suffered losses.

I later stumbled upon an overseas trading signal company. It turned out well for the first few months, but went downhill after that. I was just following someone’s advice, but that’s how I got started on trading. Eventually, when I lost enough money, I had enough and wanted to learn on my own.

Q Describe your personal strategy.

A To me, technical analysis is like the “eyes” of the markets. Everything you need to know as a trader is on the charts. What the momentum is, where the buyers and sellers are, how is the sentiment like – that’s all revealed in the price action on the charts.

Price action is about studying the market without indicators, and I use it to determine the phase of the market – uptrend, downtrend or sideways.

I also use the support and resistance lines. These two are the leading indicators, and then I use lagging indicators like the exponential moving average and moving average convergence divergence. It’s good to combine them.

I study the swing highs and lows of the market to have an overview of whether the market is trending or consolidating.

I steer away from trading in sideways markets because you don’t want to be stuck when the markets are indecisive. For example, the euro has been trending sideways for a year or so, but if you look at commodities such as gold, it has been on a steady uptrend for the year.

Next, when I identify something interesting while studying the charts, I will drill down to specific timeframes to plan my trade.

When investing, people talk about buying low and selling high. As a trend trader, it’s about buying higher on an uptrend, or selling lower on a downtrend, and is almost the opposite of value investing. My trades tend to be shorter-term.

Planning a trade is a process that involves deciding the timeframe that I personally plan to hold the trade for, the risk to reward, and also incorporating other indicators to build a trade plan.

Take the S&P 500 index. It’s been moving sideways for the whole of last year and early this year. After Brexit, it broke the 2,130-point level a few weeks ago, which is the all-time high, and is an indication that the trend is starting to move up.

Once there is such a move on the chart, I zoom in to a four-hour or one-hour chart, and plan a trade to “buy up”.

A lot of people are always questioning the fundamentals, and they also doubted if the S&P trend could be sustained. Being a pure technician means I will follow the charts.

After five years of trading for my own portfolio, this process of trade planning, using a similar price action strategy, has been ingrained in me and solidifies the trade planning process and strategy in order to achieve consistency.

I view the financial markets as one big jigsaw puzzle. The world is so connected now that when China sneezes, the whole world catches a cold.

To plan my personal trades, I scan different asset classes, from indexes, to commodities to foreign exchange, and look for the strongest trends.

I feel these are the markets that are easiest to trade as the direction and momentum have been established and, as a retail trader, all I aim to do is to “follow the tide”.

Q What’s in your personal portfolio?

A My trading portfolio consists of more than 30 different currency pairs and some eight different indexes.

As a technical trader, liquidity is of the utmost importance. Both foreign exchange and indexes offer the most liquidity in the market.

I’ve set aside a personal base capital of at least $50,000 for trading, and I plan to grow that to $100,000 in two years. I started achieving a consistent return of a low single-digit per cent each month some years ago.

The early years were painful. Like any amateur retail trader, I blew my account numerous times.

There’s a common misperception that as a retail trader, you can be an instant millionaire. That is far from the truth. Trading is about getting rich slowly.

Now the returns from my own portfolio take care of my rent. That’s more than enough for me, and I plan to slowly increase the lot size in future.

A new trader might catch a lucky break and make lots of money taking excessive risk, but with that kind of risk management, the market will catch up with him sooner or later. The key thing to trading is achieving consistency, which is a challenge that most people face.

Q What does money mean to you?

A Linking it to trading, you can’t place too much weight or emotions on money. That’s the tough part because it’s about the “money culture” in Singapore.

When it comes to trading, you’ve got to be objective and that’s the toughest part.

I also save 50 to 60 per cent of my income, and I spent the most on travelling because experiences are the currency of life.

Q What’s the most extravagant thing you have done?

A In my books, it was an autographed boxing glove, with the signatures of boxing star Manny Pacquiao and his arch rival Floyd Mayweather, that I bought last year for about $3,000.

I was surprised, and was the only bidder. This was before the fight in May. It’s not something I’d normally do. I was at an auction which had things such as sports memorabilia at a yacht show where I brought clients, and the wealthy people there were not interested. Based on my experience as a boxing fan, I think the value should at least increase threefold in the next decade or so. The last I checked online, it was selling for US$5,000 (S$6,690).

These are two legends, one is undefeated (Mayweather), the other (Pacquiao) has won in many weight classes, so in the next 10, 20 years, who knows what the glove’s value will be. My plan is to keep it until they pass away, and I’ll give it to my future son or something.

Q What are your immediate investment plans?

A My target is to achieve at least a consistent 5 per cent return a month for my personal portfolio.

My focus is on consistency, and once I am satisfied with my progress in the coming year, I will increase my capital in the account to achieve higher exponential returns.

Q How are you planning for retirement?

A Retirement is when I have the resources and capability to be a full-time trader in my own time. To be one I’d need at least $200,000 to $300,000 – maybe $100,000 for savings and the rest for trading.

I plan for contingencies first and own many insurance policies to ensure that my financial well-being is not hampered by unfortunate events. I also contribute monthly to a regular savings plan that is invested in a mutual fund. Other than that, most of my investments come from my trading.

Q Home is now…

A A condo in the east.

•The views expressed are Mr Mattar’s own and and do not necessarily reflect the views of IG or related entities.

Spotlight On … Christian Tharp and Adam Mesh

Posted July 27, 2016 By

Click here to view on YouTube.

How to Identify the Number-One Trade Every Week

Christian Tharp, CMT, is Chief Market Strategist for the Adam Mesh Trading Group. Adam Mesh has been featured in Fortune Magazine for his trading accomplishments as well as his training results.

Together, they teach you the simple routine they use for breaking down the market and identifying the best trade to make every week.

You’ll learn how to:

* Easily identify the market’s current path
* Establish near-term support and resistance levels
* Recognize standout stocks
* Determine the standout stock of the week.

Screen Shot 2016 07 05 at 4.52.04 PM
Trader Brain Exercise

What makes a good trader? Mathematical ability, innate intuition or people skills?

Is it something you are born with or something you can learn?

Bloomberg Tradebook, Bloomberg’s global agency brokerage business, has partnered with risk and trading psychology practice, The ReThink Group, to put together a tool they say helps traders sharpen their skills.

The Trader Brain Exercise launches on Wednesday, July 6, and can be accessed on the Bloomberg terminal (TBX Go) or on the web.

Denise Shull is the founder of The Rethink Group, which offers performance coaching to traders and portfolio managers, and is the brains behind this exercise. She was the consultant for the performance coach character in Showtime’s Billions drama and is an expert in neuropsychology and behavioural finance.

The exercise displays a series of videos that depict the movement of shapes. Traders study each scene and then anticipate the direction of the shapes’ next move. The ability to do this successfully correlates to the traders’ skills in predicting short-term movements in price, according to the creators.

The game is based on a study at the California Institute of Technology, published in the Journal of Finance in 2010.

Screen Shot 2016 07 05 at 4.49.36 PM
Trader Brain Exercise

Entitled, “Exploring the Nature of ‘Trader Intuition’”, the study found that the skill in predicting price changes in markets is more strongly connected with Theory of Mind, or the ability to predict other people, than mathematical skill.

Traders think about the markets in a human way, Shull told Business insider. Behind every price movement, there is a person, and traders aren’t even conscious that they think this way.

“Markets masquerade as a maths game when it’s really a people prediction game,” Shull told Business Insider.

Click here to view on YouTube.

In this Opalesque TV interview, Jack Schwager, the bestselling author of the Market Wizards series introduces FundSeeder (, a free online platform designed to find undiscovered worldwide trading talent. The FundSeeder founders, which include CEO, Emanuel Balarie, COO James Bibbings, and CRO, Jack Schwager, created this solution so that all traders can have a centralized website where they can link their brokerage accounts to create daily, real time verified track records of their performance, and potentially attract capital from investors.

The FundSeeder partners were motivated to launch the website by a major limitation in the current investment world, with “the same small number of curators directing investor assets into the same, small number of super-large asset managers,” says Jack Schwager.

The current investment environment consequently overlooks a tremendous scope of other traders who have talent and can outperform larger asset managers, but do not have access to capital. FundSeeder offers a solution, whereby any trader in the world can link their brokerage account to the website, establish a verified track record, and gain access to numerous trading tools, such as a chart of their equity curve. In the future, the sister company of FundSeeder, FundSeeder Investments, will identify the top performing traders and look to allocate to them directly. The mission of the platform is to “democratize and globalize the asset management world”, and could potentially find the next generation of talented traders, including the next Market Wizards.

Learn About: FundSeeder: A free platform designed to find undiscovered worldwide trading talent How FundSeeder connects emerging traders with FundSeeder Investments and investment capital The benefits of tracking daily performance data, “where there’s nowhere to hide a trader’s risk” Every trader can benefit from the analytics, but how will the most talented traders get an allocation? The tools: metrics, technical analysis, equity curves, rolling indicator functions for multiple periods Unverified trader track records are still reviewed as possible candidates for capital allocations, but are not eligible for the “Leaderboard” How the FundSeeder model is different from Schwager’s earlier research for Wizards

Jack Schwager is a Co-founder and Chief Research Officer of FundSeeder, a firm that seeks to find undiscovered trading talent worldwide via its trader platform ( and to connect unknown successful traders with sources of investment capital through its sister company FundSeeder Investments. Mr. Schwager is a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. Previously, Mr. Schwager was a partner in the Fortune Group (2001-2010), a London-based hedge fund advisory firm. His prior experience also includes 22 years as Director of Futures research for some of Wall Street’s leading firms, most recently Prudential Securities.

Mr. Schwager has written extensively on the futures industry and great traders in all financial markets. He is perhaps best known for his best-selling series of interviews with the greatest hedge fund managers of the last three decades: Market Wizards (1989), The New Market Wizards (1992), Stock Market Wizards (2001), Hedge Fund Market Wizards (2012), and The Little Book of Market Wizards (2014). His other books include Market Sense and Nonsense (2012), a compendium of investment misconceptions, and the three-volume series, Schwager on Futures, consisting of Fundamental Analysis (1995), Technical Analysis (1996), and Managed Trading (1996). He is also the author of Getting Started in Technical Analysis (1999), part of John Wiley’s popular Getting Started series.

Gold Fever

Posted July 18, 2016 By

by Bruce Fraser

My grandfather and great grandfather were gold miners. They took their ‘grubstake’ to Alaska and the mountains of California. After many adventures they succeeded with a small working gold mine in Northern California. You should know this when reading this post as, by heredity; I may have a touch of ‘Gold Fever’.

To tamp down my perma-enthusiasm for gold I am first and foremost a Wyckoffian. Let us do the Wyckoff Drill on the SPDR Gold Shares (GLD). GLD is designed to track the price of the cash gold market. A share of GLD is valued at about one tenth the price of an ounce of gold. It has been a reliable proxy for the price of gold and it is traded by many gold enthusiasts. There are other gold tracking instruments that differ in composition and thus may be more suitable for your objectives.

After a long and grinding bear market for gold, a powerful turn upward in January and February has persisted through mid-year 2016. Is this the start of a new gold bull market? Does it have the potential to keep rising? How far can GLD go and how long can it go?


Notice the largest bulge of volume at the Preliminary Support (PS) which often happens. The Selling Climax follows, also on very high volume. The Automatic Rally (AR) and the SCLX set the trading range of the Accumulation, which has been three years in the making. Lower peaks (circled in blue) keep the meme of a downtrend in force and mask the Accumulation at work under the surface. A classic trend channel is drawn and highlights an oversold condition in July ’15 and November ’15. We are calling this a Shakeout as it deeply penetrates the SCLX level and remains below for an extended period. The $100 level holds by 23 cents, a key round number and important support.

The rally that starts at the beginning of 2016 is a ‘Change of Character’. Springs and Shakeouts often reverse in such a dramatic fashion. Is the rally nearly over or is there more fuel in the tank? First note that Gold is still within the Accumulation structure. The peak of the Automatic Rally (AR) is Resistance and defines the upper border of Accumulation. Gold has not yet rallied to Resistance. A Sign of Strength (SOS) is a rally that has the power to push higher than a prior important peak. A Minor Sign of Strength has just occurred with a move above $125 (prior important peak). Often a SOS indicates resistance is forming and price needs a rest. There are three key peaks in the Accumulation that are magnets for a SOS followed by a Backing Up action (more on this later).

Labeled on the PnF chart are the essential points from the vertical chart. We always take our horizontal PnF counts from the analysis of the vertical chart. Is there enough fuel in the tank (pent up Accumulation) to make a campaign in GLD worthwhile? We always count from right to left and the LPS will be our anchor on the right side to begin counting. Three segments are counted, two Secondary Tests (ST) and the SCLX. Each of these counts is flagged on the PnF chart. The count could become bigger if GLD rises to the Resistance area and forms additional LPS and Backup levels as these can and would be counted.

The first segment (smallest count) takes GLD to the Resistance area at 141 / 155 which would produce a Major Sign of Strength and complete the Accumulation. The next segment counts to an exact double of the 102 low. There is substantial fuel in the tank to propel GLD higher. The segment from the LPS to the SCLX targets a price of 252 / 266.

Horizontal PnF counting is a powerful tool as it offers a method for estimating the extent of a price movement. But it cannot reveal the time it will, take or the path. The ‘Art of the Campaign’ is a major subject for future consideration. Here is an article co-authored by Dr. Pruden, Prof. Bogomazov and your blogger on another campaign that could illuminate how to proceed with GLD (click here for a link).

Take a moment to study and compare the above schematic to our GLD chart. Typically markets do not move in a straight line. At times markets are in hurry, and then they languish. Wyckoffians learn to let the markets lead the way. This schematic provides a potential roadmap for how prices emerge from Accumulation. It could help us to understand how GLD will stair step its way into an uptrend. There is Resistance at the upper bounds of the Accumulation that must be worked through. This will create pauses and opportunities to climb on board GLD. There is something here for investors and for traders. Investors will look to the dull periods when prices sag to build a position for a long term campaign while the trader will be poised for when dull and quiet prices morph into jumping action and the emergence of a new uptrend.

All the Best,


Seminar Announcement: “The Art of Stock Campaigning Using the Wyckoff Method”, Roman Bogomazov, Hank Pruden and I will be conducting a day long seminar in San Francisco on August 19, 2016. For additional information click here.

Spotlight On … Marc Chaikin

Posted July 14, 2016 By

How to Turbocharge Your Stock Trading by Combining Fundamentals and Technicals

Click here to view on YouTube.

By Kim Iskyan

A junior trader making $66,000 a year ended up costing one of Europe’s largest banks more than $7 billion. And the scary part is no one appears to have known what he was doing until it was almost too late.

In 2008, Jerome Kerviel was a derivatives trader at Societe Generale  (SCGLY) , which is often referred to as SocGen. Derivatives include futures, options, forwards and swaps, and their value is based on, or derived, from an underlying asset. The underlying asset could include a specific stock, an entire market index, a commodity and so on.
Kerviel was involved in profiting from arbitrage opportunities. Arbitrage allows traders to profit when two assets that should have the same price are mispriced.
For instance, Coca-Cola may be trading for $45 on the New York Stock Exchange but for $44.97 on the London Stock Exchange (after currency conversion). So, to profit from it, a trader might go short Coca-Cola on the NYSE (to profit if the price falls) and go long Coca-Cola on the LSE (to profit if the price rises). Then when the 3 cent difference is corrected, the trader makes money as the two prices converge.
Three cents is actually a very large spread (and it wouldn’t last very long once traders got wind of it). Arbitrage price differences are normally so small that traders need to borrow money to be able to turn a sizable profit. This means they use leverage and derivatives to magnify gains.
Kerviel’s Big (Unauthorized) Bet
Using futures (a type of derivative), Kerviel placed a massive bet that European stock markets would go up. Normally, he would have placed an opposite bet, like shorting U.S. markets, to hedge the bet if he was wrong. If he didn’t, SocGen had a risk-surveillance system that would alert Kerviel and his supervisors that one side of the arbitrage trade was missing.
But Kerviel had learned to hack the surveillance systems at SocGen. He had figured out how to fool the system into thinking every long position he took was being offset with a short position. But those short positions didn’t actually exist. So, he ended up placing massive one-sided bets without a safety net.

This unauthorized trading was immensely profitable for a while. In 2007, Kerviel made $2 billion in profits without anyone cluing in to how he was doing it.

Just how massive did his bets get? By early 2008, Kerviel had amassed a futures position worth $73 billion. To put that in perspective, a junior trader earning $66,000 had managed to create a position five times the economic output of Cambodia. Or 1.5 times more than the market cap of the major bank he worked for.
The position included 30 billion euros’ worth of Eurostoxx pan-European stock index futures contracts, 18 billion euros of Germany’s DAX futures and 2 billion euros of London’s FTSE futures.
And here’s where it gets really crazy. At the time, the U.S. subprime mortgage crisis was in its early stages. Smart traders bet markets would go down. But Kerviel did the opposite — he bet on markets going up. And he did that on purpose … He actually wanted to lose money.
Kerviel was apparently worried that all his unauthorized (but very profitable) 2007 trades were about to be discovered. So, he was hoping for some massive losses to hide his fraudulent gains.
It turns out his strategy worked too well. On Jan. 18, 2008, a compliance officer discovered one of Kerviel’s offsetting trades did not exist. Then everything unraveled from there.
The extent of Kerviel’s rogue trades was discovered that weekend. Kerviel was fired. But SocGen still had to unwind the massive position Kerviel had built up.
Bank officials decided to just get it over with and “unwound” all of Kerviel’s long positions by selling them into the market. Selling $73 billion worth of anything over a couple of days drives prices down. And this made the bank’s losses even higher.
Once the dust settled, Kerviel’s trades ended up costing SocGen close to $7.2 billion. That made him the worst rogue trader in history.
What Went Wrong?
There’s no doubt SocGen’s lapse in supervision caused this problem, but part of the problem could have been the nature of traders. Kerviel came from a working-class background and wanted to prove himself at this global bank filled with co-workers with degrees from business schools.

On a number of occasions, including the 9/11 terrorist attacks and the London bombings in 2005, he managed to make enormous profits for the company. He was a rising star and was earning a reputation as a fearless money-making machine. He admitted it felt like “playing a video game” at times.

Kerviel seems to have been addicted to the massive bets he was taking. The astronomically high amounts may have triggered a sense of euphoria and unleashed dopamine that kept him hooked, much like alcohol or cocaine. His actions morphed from trading to outright gambling, and he was hooked just like any other gambler. (For a free report about avoiding the kinds of cognitive biases that got Kerviel in trouble — and how to keep your emotions out of your trading decisions — click here.) His obsession with big gains drove him to hack SocGen’s system, and his emotional state made it impossible for him to stop, even when things got out of hand Kerviel ended up with a five-year prison sentence (with two years suspended) for breach of trust, unauthorized use of SocGen’s computers and forgery. (He only ended up spending five months behind bars). Plus, he owes SocGen $6.3 billion, which of course he’ll never be able to pay back.
Avoid the Same Mistakes
Emotions are a trader’s worst enemy. Obsessive and reckless behavior can prove disastrous for most investors. Don’t get caught up in leverage you cannot manage or emotions you cannot handle. Stay detached, objective and always cover your positions. Part of the trick is to have a stop-loss strategy for your investments. Most important, never get overconfident with a few wins under your belt. A balanced and disciplined strategy is the only way to keep your investments on track and avoid the pitfalls most traders fall into.
(We show you how to deal with these investment pitfalls — and how to keep emotions out of your trading decisions — in a free report you can download here.)
Kim Iskyan is the founder of Truewealth Publishing, an independent investment research company based in Singapore. Click here to sign up to receive the Truewealth Asian Investment Daily in your inbox every day, for free.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
Hide me
Sign up below to receive the FREE APTA Newsletter
Email Address
Show me
Build an optin email list in WordPress [Free Software]
Contact APTA