As I’ve mentioned before, one of the things I really love about trading is that, unlike any other business, you can fully test your ‘business model’ (trading plan) without risking any real money. In trading, this assessment process is called back testing. Back testing is the area now most neglected by traders – if you want to find out more on back testing click here.

That said, for those of you who own MetaStock, TradeSim is your best bet for back testing. In short, TradeSim is the first true realistic trading simulator/analyzer for Metastock that can quickly back -test and evaluate a trading system across a portfolio of securities. With its powerful data processing capabilities, TradeSim can evaluate the historic performance of a given trading system within a matter of minutes and do it with a realistic representation of a real life trading scenario.

Sadly, for some, TradeSim can seem a little daunting at first… knowing how important it is to get your head around, I thought I’d make a few video tutorials to show you how easy it can be. Watch them below….

Video #1. How To Install TradeSim

Video #2. Going through the TradeSim quick start tutorial – Part 1.

Video #3. Going through the TradeSim quick start tutorial – Part 2.

What’d you think? Did you like these videos? Please comment below and let me know… it’s only through your feedback that I know if I’m creating the content you want to see.

Your Trading Coach,

David Jenyns

Ps. If you’d like to grab a copy of tradesim click here.

Just before Christmas past, I was hoping to interview David Samborsky from Compuvision (the maker of TradeSim). But, to cut a long story short, things didn’t go to plan and we never did get to record that interview.

Instead, I emailed Dave a few questions including those submitted by my clients and he’s kindly answered them below. Check them out now and if you’ve got any further questions be sure to post them on the blog – I can then follow up with Dave and get you the answers you need.

Why is backtesting your trading system so important?

It’s important for a number of reasons:

• Backtesting should be used as a good estimator of future performance but should not be used as a guarantee of future performance.
• Backtesting can be used to stress test your system over periods of adverse market conditions in order to see how your system holds up.
• Backtesting can be used to quickly find the conditions under which your system breaks down.
• Backtesting can be used to quickly test a system that would otherwise take years to paper trade.
• Use back testing to quickly test what-if scenarios.

What are your thoughts on mechanical trading vs intuitive?

Mechanical trading takes away human emotional as well as the temptation to change the system you started with. Because humans have a tendency to always want to be right this tendency works counter intuitively to mechanical trading which is better explained by the law of averages rather than being able to predict a specific outcome with any great accuracy.

One of the most important aspects of back testing results is a smooth equity curve with a minimum drawdown especially over periods of adverse market conditions. Some people try to minimize their string of losses because this can have a dramatic impact on the trader’s emotion, psyche and stress levels.

However with a portfolio trading system a one off back test can be misleading because there are many ways to trade the system using available capital and trading opportunities. Compared to a single security system, back testing a portfolio trading system requires a different approach that makes use of advanced statistical analysis techniques that takes advantage of the variance in the system.

For a portfolio analysis a thorough statistical analysis is imperative. TradeSim has a Monte Carlo analysis feature which tests a portfolio system in much the same way you would if you got 100 or a 1000 traders to trade the same system using the same stocks and then analysing all of the results using statistical techniques.

What are the limitations of backtesting ?

The main limitation of any back testing is that no back testing can guarantee future performance so in essence it should be used as a tool to estimate future performance and test the robustness of a system rather than look for a guaranteed future performance. My recommendation is to thoroughly test your systems over periods of adverse market conditions such as corrections and crashes. Seeing how your system would hold up in those conditions is a good indication of how it will fare in the future.

The other limitation of backtesting is actually not being able to replicate exactly what would have happened if you did actually trade the system at the time. Such things as order entry and exit slippage etc cannot be duplicated exactly with back testing. However when statistically analysing a system the effect of these discrepancies can more or less be minimized.

What is the biggest lesson you’ve learn over the years with your involvement in TradeSim?

The biggest lesson with back testing is that it is a mistake to assume that a one off back test that would be applied to a single security trading system is adequate to characterise and quantify a portfolio trading system. It is not !!

Now for some questions from my clients… Click Here To Read More

Is there a greater Depression on the horizon?

I know the rallies we have seen around the world would have us believe not… but what’s really changed to the underlying economic conditions that caused the whole sub-prime collapse in the first place?

While on my recent vacation in Vanuatu, I asked my good friend, and demographics guru, Endre Dobozy what he thinks. I recorded the interview and have posted it for you below. You’ll soon understand why I like Endre’s economic forecasts… Endre calls it how he sees it.

Disclaimer: The information provided in these videos shouldn’t be considered financial advice. Everyone’s situation is different and you should consult your own advisors before making any investment decision.

Please also understand Endre and I are not trying to pick the “top of the market” – we’re happy to continue to ride the trend till it reverses. The purpose of these videos is to give you a balanced forecast of the world economy for 2010. Watch the videos below (or click here to download the mp3 version) and I’d love to see your comments…

Part 1.

Part 2.

Part 3.

Part 4.

Part 5.

*Click here to download the complete mp3 version.

What’s your view on Endre’s economic forecast for 2010? Will we see a continued recession, or worse, a depression? What about the US, Australian, Japanese and emerging economies?

I want to hear from you… post your comments!

Your Trading Coach,

David Jenyns

Ps. Would you like to find out a little more about Endre’s Underground Investment Secrets Newsletter? Click here to get your 1 month free subscription.

Looking for some holiday cheer? click here.

It feels like we’re in the final hundred meters of a year long marathon and I can see the finish line. And, making things just that little bit harder for myself, I decided to take on more than I could possibly handle. Now before you start feeling sorry for me

As a reward, my girlfriend and I are taking 2 weeks off and going to Vanuatu – search it on Google maps. It’s north of New Caledonia and west of Fiji in the South Pacific. I can’t wait! I’ll be going for my open water scuba diving licence and I’ll be seeing my first active volcano (Mt. Yasur). I’m also hoping to catch up with Endre Debozy from Landua Securities (might even try to record an interview for you).

But before I start daydreaming about my holiday…

Every year, for the past 4 years now, Stuart McPhee and I like to run our Holiday Super Special. In short, we get our best stock market education packages and just about give them away

So, if you’ve ever thought about purchasing one of our stock market products, now is the time! Click here to see what’s up for grabs this year.

Your Trading Coach,

David Jenyns

Ps. I recorded a short happy holiday message for you here:

Click here – to check out my end of year stock market education blow out.

Thinking back to my to early days in self development, I was a fanatic. I read the books, bought the courses and attended all the seminars I could. I suppose I’m still like that today… when I start something new, I commit to it 100%.

I had this funny idea that if I could program my subconscious mind to follow the patterns of my successful mentors, I too would become successful. In hindsight, it wasn’t so funny, it was serious stuff.

I went to great lengths to drill this material into my subconscious. I read first thing in the morning, listened to my walkman during the day and fell asleep with my headphones still playing… Programming my mind.

To this day, I still see the difference between where I am now and where I am going as a completely mental exercise.  Something I can control with appropriate self-programming.

Many years ago, in my search for understanding, I was lead to a study of the mind called Neuro Linguistic Programming or NLP for short. Founded in the study of medical hypnosis, NLP seeks to give you control over who you are, by re-programming your mind.

Sounds fascinating right?

Well, once I started to understand the power of the subconscious and as I saw the results… I made a commitment to myself to, at some point, train with the grand master… the co-founder of NLP, Richard Bandler.  I wanted to experience his teachings first hand.

6 long years have passed since I made that commitment and today marks the day when I locked it in I’ve just booked a ticket to Richard Bandler’s Design Human Engineering (DHE) seminar. It’s a 6 day event held in Orlando, Florida. As you can imagine, I’m pumped -  the only thing I’m not looking forward to is the flight, 20+ hours (sheesh!).

Now I’m not really writing to you today to tell you about Richard Bandler’s seminar (however if you’d like to come with me, shoot me an email at www.davidjenyns.com/support)

I’m writing to you to illustrate the power of the subconscious mind. Your subconscious mind controls everything… especially if you’re a trader. As a trader, you need to program your subconscious mind for success. Probably the best person I know who can show you how to do this is a guy called Norman Hallett. Have you heard of him?

If you’ve been a subscriber of mine for a while now, you may have seen some of the interviews I’ve done with Norman over the years… suffice to say, Norman knows his stuff and he gets my tick of approval

So here’s why I’m writing to you today…

Norman has just released a program called the Disciplined Trader, and being delivered online, it costs a fraction of what I’ll be spending to fly to Florida and attend the DHE seminar, but it could be worth just as much to you.

I’ll leave it to Norman to explain what it’s all about but all I’ll say is “you should get this”…

www.thedisciplinedtrader.com

Your Trading Coach,

David Jenyns

Ps. And I was serious about Richard Bandler, if you want to come, email me.

I’m not too sure if you’re a subscriber of my newsletter, but I wanted to be sure you didn’t miss out.

I have just put the finishing touches on www.freetradingsystems.org (version 2) and I want to know what you think. We recorded a whole new set of videos, updated the content, and made it possible for you to post comments.

I’m extremely proud of how it all came together and believe it’s one of the best *free* resources available online. Check it out and let me know what you think by posting your comments on the site – www.freetradingsystems.org

Your Trading Coach,

David Jenyns

Ps. To celebrate the relaunch of the site I’ll give you 20% off my TSR2.0 – it goes hand in hand with the new site.

If you haven’t already got your copy, you can read about the TSR2.0 here: www.trading-secrets-revealed.com
And to get your 20% off click here.

Rick click here to download my interview with Daryl Guppy (mp3)

While you’re waiting for it to download, read on…

In a recent interview, Daryl Guppy (CNBC’s Chart Man) shared with me how he sees market trading conditions having changed in 2009. He also identified the importance of tailoring your trading approach to remain one step ahead of these changes.

The fact is, if you’re using the same system you were using in 2007 or even 2008, your results will be marginal at best.

There have been significant changes in the characteristics of the market. For example, the market is much more volatile than ever before! Historically if the Dow were to move 3%, it’d be front page news, today these volatility wipes are all too common.

So how can you trade this volatility to your advantage?

To combat these changes, Daryl recently developed the trend volatility line (TVL), an advanced application of the Guppy Multiple Moving Average (GMMA) indicator. It has been shown that these methods deliver superior trade management while overcoming the limitations of stop loss methods based on price volatility – thereby avoiding false exits from profitable trades.

Perfectly tailored to intra-day, end-of-day and scalping methods, the TVL works for position trades in stocks, derivates, futures, and FX.

Here’s how to update your trading methods!

Daryl has recently released a couple of DVDs to get you up to speed with what’s working now – trading methods for the current 2009/2010 trading conditions.

Introducing the ‘GMMA Trend Volatility Management’ DVD – 124 minutes (click here to get your copy)

In this DVD Daryl explains, in detail, the application of his new TVL indicator. You’ll learn how to…

*      Use volatility to assist with better trade entries and trend management

*      Use the momentum minute to reduce entry risk

*      Identify exact price points when a trade moves from Hope, to Confidence and then to Certainty (HCC method)

*      Correctly calculate and apply trend volatility (TVL) stop loss method

*      Know when to shift from trend volatility management to price volatility management to maximise profits

*      Upgrade intra-day trades into multi-day trades

*      Improve scalping trades and upgrade them to intra-day trades

And then there’s the  ‘E.W.S (Early Warning System) Trading Approach’ DVD – 45 minutes

In this DVD Daryl explains five chart patterns you must know that suggest informed trading is happening and how you can tag along for the ride. This is chart analysis at its best!

Here’s a few of the things you’ll discover:

*      The difference between informed and inside trading

*      How to identify informed trading using E.W.S. technical

*      Analysis including these chart patterns: Island in the sun, Oil rig gusher, Denial pattern, Pile driver low, Fool’s gold

*      E.W.S trading tactics for profiting from each chart pattern

*     And lots more…

Grab both DVDs for the discounted price of $190AUD (approx $175USD) Click here to order now.

Order now, and you’ll also receive 2 bonus copies of Daryl’s most recent newsletters “Tutorials In Applied Technical Analysis”. Click here to order now.

I highly recommend these DVDs and consider them required viewing by all traders.

Your Trading Coach,

David Jenyns

Ps. Have you watched my Daryl Guppy Interview? Click here to see it now.

It’s with great pleasure I’d like to share an interview I conducted with Daryl Guppy (one of my mentors) while he was attending a Trading Expo in Melbourne recently. It really was an honour with Daryl’s list of accomplishments being nothing short of amazing.

In this candid interview I asked Daryl to explain how he trades in the current market climate… He holds nothing back, even taking the time to answer questions submitted on this blog.

Watch the complete interview below and let me know what you think:

More

I was pretty chaffed the other day when Daryl Guppy emailed asking if I’d write up an article for his clients on how to create a MetaStock exploration using his Guppy Multiple Moving Average (GMMA) indicator.

I’ve known Daryl for quite a few years now and have always loved his work – of course I was only too happy to help out. I’ve just finished it and thought you might like a free copy? Click here to download the PDF.

I also recorded a short video walking you through how it all works (watch it below).

One final thing… I’ve just arranged to have an interview with Daryl this weekend while he’s visiting Melbourne for the Trader’s Expo. I was thinking, if you’ve got any questions you’d like me to ask him, please just submit them as a comment below and I’ll be sure to ask on your behalf.

Your Trading Coach,

David Jenyns

Ps. Remember to submit your questions!

PPs. Here’s the video to accompany the article (download the PDF here).

Norman Hallett recently came out with a new ebook called “taming risk” – it’s all about money management. Since I kind of see myself as a bit of a trading money management expert, I wanted to get Norman on the phone for a little grilling

I deliberately asked the hard questions and I think I may have even stumped him a few times. Anyway, I’ve uploaded it for you to listen to… click here to download.

Your business/trading philosopher.
David Jenyns

Ps. If you want to download Norman’s new ebook, here’s a link where you can get it for free – disciplinetraders.com