“...and just when everyone was showing me his own version of the truth, I closed my eyes.
I closed my eyes to see.
It was my law and I saw.” - C. Pinto
Trading is my great life's passion since more than 10 years now and after working hard to gain confidence for proprietary trading purpose, today i'm really happy where i am and if i look back i can say that pain is the only way to gain! (not only in money terms but also personality improvements and more professional visions). Today i'm also providing solutions to make life's traders easier.
I believe that ALL the markets have an highly organized structure (that is the only thing that can make us consistently profitable) but this structure is not always easy to spot so you should learn to read the unreadable (the order in chaos) and after that you should try to apply consistent trade and money management; but don't worry you only need self-control and the right tools to achieve trading consistency.
Interviewer: What is the secret behind succesful trading?
Carmine's Reply: The "zone" that you are creating inside of you.
Interviewer: Do you have any pattern more powerful than another to trade?
Carmine's Reply: Yes, you need to understand that the most powerful patterns are psychological patterns of emotions (your emotions) and psychological patterns of price (which are a subjective matter at some degree)
Interviewer: Why is that?
Carmine's Reply: Mr. Market is an entity made by humans and so it is a matter about their psychology
Interviewer: So, what you can say about robots in general and HFT? Are they going to change the markets dynamics?
Carmine's Reply: Just at some meaningless degrees but in general It is the same as above, nothing change, in fact no one can change the basic market environment; robots are made by humans to beat other humans so the statment above about "psychologycal pattern" doesn't change. If you see at Ralph Nelson Elliott work, he well described why the market works that way even though if his theory is not applicable precisely all the time but it doesn't matter nothing is perfect when we come to human minds you need to stay flexible with your thoughs.
Interviewer: So, you are saying that pattern based on indicators are not effective?
Carmine's Reply: Indicators can be effective; all the invented tools in technical field can be effective BUT all depend on how you are going to use and implement in the context of you.
Interviewer: What is the context?
Carmine's Reply: context is everything; it is your natural habitat while you are trading and it is an extremely personalized thing; context is about "the zone you created inside of you" it embraces everything and it is ultimately the expression of your own personality in life.
Interviewer: Oh well, if I understood correctly this is the reason why an identical trading system can be profitable for a trader while can't be profitable for another?
Carmine's Reply: yeah. Bingo!
Interwier: Well, what you can say about algotrading? Why most of the EAs fail despite their backtests looks fantastic?
Carmine's Reply: This is simple; EAs can't create a "context" in itself. Most of the EA are based just on indicators coupled with a set of data that suits very specific conditions on past datas, but markets have in the future a billions of variations and this is the main reason of the failure.
Interviewer: But you said above that indicators can be used succesfully, is not it?
Carmine's Reply: you are right, the explanation is that EAs can't understand what is the context while they apply trading through indicators, so they can be profitable only until market conditions suits that trading mode; the problem is that you will never be in control.
Interviewer: I noticed you never speak in terms of money. Any reason for that?
Carmine's Reply: yeah, there is a serious reason for that. The reason is: You will never make money while you trade -laughing-
No, seriously this is a great truth untill you master yourself, because the greatest satisfaction is the entire process, not the money, and this fact denotes how much passion you have about markets.
Also, another reason for that is: if you start to think in money terms you are creating a bad environment inside of you. When you admit at the end of the day: "okay I've lost 20.000$ today" so in automated fashion your subconscious start to think in these terms "Jesus I could have bought a car with that money" even if that money represent just 1% of your capital and this clearly is hurting your succesful "context" inside of you. Instead when you think in term of loss percentage you feel much more in control of you without hurt your precious internal "context" hardly builded. You also need to mentally collocate your losses and profits in the perspective of the horizon you are referring to which is essentially your personal time frame; it can be months, quarters, years etc..
Warren Buffett would collocate this balance flow perspective on a time frame at least of 5-10 years for example.
Interviewer: what It takes in time terms to know and master what you know?
Carmine's Reply: There isn't a specific time period to reach the goal. This is very personal matter, you can master your trading in 5, 10, 20 years or never. It is also function of how much hard work you make, and how much passionate you are without give up in the meanwhile. The point is that you need to be wrong before to be right. You will make a lot of mistakes but It is the better thing that will happens to you because you will "capitalize" later on those lessons.
Bear in mind that this happened to all succesful traders at the beginning and so, you will be sure that if someone will say you that he never lost in his life he is either a liar, a loser or a failed trader.
These above are some of the reasons why trading appear to be so difficoult, the reality is that no one have the holy grail in his hands but hard work and perseverance will make you to master yourself and the funny thing is that when you can "manage the fire" suddenly you feel that trading become extremely simple while before you was struggling around; you will smile.
The subcounscious training is completed but it need to be alimented over the span of your entire trading career although the most of the job is done.
Interviewer: Is there any other clue to feel when this unconscious process is completed?
Carmine's Reply: Sure: You will feel bored while you trade and make money instead before you was excited and focus only about make money while you was losing money. Money will be secondary to you this time: you have a loss-->you try to analyze that loss to see if you need to comunicate something new to your subcounscious at the same time you forget that loss without any impact on you; you have a gain--> you see that gain but you remain bored and cold instead before your happiness was disproportionate; also when you reach this goal in your life don't forget to have an attitude of gratitude towards you and the entire universe! It will be an attitude that will reinforce you in all the senses: first of all psychologically and in a second time it will activate the universal law of attraction and abundance (if you believe in it at any degrees). This is also the reason of philanthropic activities of Mr. Buffett, Mr. Gates and many others!
Interviewer: Okay, I understood that you hate to speak in money term, but what you can say about performances in general?
Carmine's Reply: performance should be treated just to have a measure of your EDGE not as a measure of your EGO. If you make a comparison between Warren Buffett and Bruce Kovner for example someone could say that Warren Buffett is an amateur in comparison to Mr. Kovner just looking at some performance in annual ROI% terms; these are top market athletes and you can't make any comparison due the fact they have a totally different trading environment, goals, styles, funds, balance flow horizon, etc..If you take a look at Berkshire Hathaway stock price you can see that general growth is very stable over many years while probably the equity fund managed by Kovner is much more "nervous" although it was much more lucrative on yearly basis and the reason is, again: balance flow horizon, risk appetite, different style and different portfolio compositions and last but not least different fund size! So as you can see performance comparison in general in this field is a totally misconception and meaningless and it is not an indication of the trader's talent; so you need to understand that you can be considered a very nice trader even if you can make just a 5-10% on yearly basis with a maximum drawdown of 2-4%. Performance are nothing, the point here is the risk appetite which is a very personal thing and falls in your "customized trading context". Basically you are risking X (as the maximum historical peak of losses) to make Y. If you want to be a nice trader or investor you should try to keep this formula as follow at least: y=2x (in a simplified manner) over your balance flow horizon of reference.
Interviewer: What you can say about your WindExpansion EA?
Carmine's Reply: I can say that my products are the results of years of trading experience and I really use them to assist my daily trading routine or I use them to diversify my portfolio as in the WindExpansion specific case.
This is an algorithm based on some solid universal market principles that I tryed to implement over the years. My dream was to create an EA that could include all the basic stuff of succesful trading as: no over trading, entries based on psycological patterns, safe trade management, adaptive behavior on the multi dimension of the markets etc.. in the end I developed it but I never use to fully automate my global portfolio funds which is essentially traded 85% discretionally by me and my " customized context". WindExpansion and EAs in general are just nice additions to spread and diversify a portfolio.
Interviewer: Nice, If I understood correctly you made a lot of scrupulousness developing your products.
Carmine's Reply: I hate to recommend my products because my purpose is not that, I'm a full time trader with few external collaborations so I don't mind to sell just 10 or 1000 copies of my products; what i'm doing is try to open mind and consciousness of newbie to give them the opportunity to prosper and partecipate at markets without much illusions and pain because illusion will make you greedy which is the most catastrophical habitat to live with.
Interviewer: thanks for your time Carmine.
Carmine's Reply: It is my pleasure, enjoy your trading!
When you have great patience and when you know what you are doing after the proper studies on your charts, you can have some great satisfactions in your business just like in your life.
Remember ALWAYS to play GREAT DEFENSE and NEVER great offense in your trading activity and you can have a chance to survive and prosper in the markets over many many years!