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    Automated Stock Trading Systems: A Systematic Approach for Traders to Make Money in Bull, Bear and Sideways
    Automated Stock Trading Systems: A Systematic Approach for Traders to Make Money in Bull, Bear and Sideways
    Automated Stock Trading Systems: A Systematic Approach for Traders to Make Money in Bull, Bear and Sideways
    Ebook206 pages2 hours

    Automated Stock Trading Systems: A Systematic Approach for Traders to Make Money in Bull, Bear and Sideways

    By Laurens Bensdorp

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    About this ebook

    Consistent, benchmark-beating growth, combined with reduced risk, are the Holy Grail of traders everywhere. Laurens Bensdorp has been achieving both for more than a decade. By combining multiple quantitative trading systems that perform well in different types of markets—bull, bear, or sideways—his overall systematized and automated system delivers superlative results regardless of overall market behavior.

    In his second book, Automated Stock Trading Systems, Bensdorp details a non-correlated, multi-system approach you can understand and build to suit yourself. Using historical price action to develop statistical edges, his combined, automated systems have been shown to deliver simulated consistent high double-digit returns with very low draw downs for the last 24 years, no matter what the market indices have done. By following his approach, traders can achieve reliable, superlative returns without excessive risk.
    LanguageEnglish
    PublisherBookBaby
    Release dateMar 31, 2020
    ISBN9781544506029
    Automated Stock Trading Systems: A Systematic Approach for Traders to Make Money in Bull, Bear and Sideways

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      Book preview

      Automated Stock Trading Systems - Laurens Bensdorp

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      cover.jpg

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      Copyright © 2020 Laurens Bensdorp

      All rights reserved.

      ISBN: 978-1-5445-0602-9

      ]>

      To Dad: Thank you for your unconditional love. You are in heaven, but there is not a day that goes by that I do not think of you.

      To Jose, Naty, and Sofia: Thank you for being the great kids you are. You have taught me more about myself than you ever will know.

      ]>

      Contents

      A Special Gift for You

      Disclaimer

      Acknowledgments

      Foreword

      Introduction

      1. Better Returns Regardless of Market Performance

      2. Why and How Noncorrelated Trading Systems Work

      3. Make Money in Bull, Bear and Sideways Markets

      4. To Succeed, First Define Your Objectives

      5. Using Position Sizing to Achieve Your Financial Goals

      6. The 12 Ingredients of Every Trading System

      7. Increasing Risk-Adjusted Return by Combining Multiple Noncorrelated Systems

      System 1: Long Trend High Momentum

      System 2: Short RSI Thrust

      System 3: Long Mean Reversion Selloff

      8. How and Why Trading More Systems Simultaneously Improves Returns

      9. Expanding the Number of Noncorrelated Systems

      System 4: Long Trend Low Volatility

      System 5: Long Mean Reversion High ADX Reversal

      System 6: Short Mean Reversion High Six-Day Surge

      10. The Risk of the Unknown

      System 7: The Catastrophe Hedge

      Conclusion

      About the Author

      ]>

      A Special Gift for You

      Thank you for reading this book. I truly do hope you will find it useful. I also recognize that some people learn better when information is presented in different formats. After all, that is a lot of material and a lot of numbers!

      Some people learn better by seeing and hearing me. Below is an exclusive link for readers to access a series of videos in which I cover the material I will discuss in this book, along with some additional content. The video course goes deeper into the material, with clear examples and careful explanation. I hope you find this, too, useful in your journey.

      Find the link to the free video course here: https://tradingmasteryschool.com/book-offer.

      ]>

      Disclaimer

      It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or will not result in losses. Past results are not necessarily indicative of future results. Examples presented in this book are for educational purposes only. The representations in this book are not solicitations of any order to buy or sell. The author, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

      Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

      ]>

      Acknowledgments

      I believe that successful people can only really be successful if they have a great marriage, a great partnership, to support them. My wife Madelin is a big impact on my life. She understands me so well that I am able to enjoy my life optimally and to have the freedom I want. When I am in doubt or unsure, she is the one who pushes me. That is incredibly important. I owe her a huge debt of thanks, because my success is due to her love and support.

      Thank you to Scribe Media, my publisher. The whole team did a phenomenal job. Special thanks to my editor, Hal Clifford, who has been a master of language, turning my ideas and thoughts into highly readable text that reflects my personal style and the way I want people to see and understand me. He showed great patience through the journey of creating this book, keeping me on the path when I strayed into content that may not have been the best for the book and never complaining when I showed up with new ideas. He was a true collaborator, a thought partner striving to make the book the best it could be.

      Tom Basso is a friend and partner who read this manuscript carefully and gave me excellent advice that improved it markedly. I have had the opportunity to work with him on many occasions, and we continue to work together, co-leading seminars. It brings me great joy to share with him the pleasure of teaching.

      Finally, I want to directly thank all of my students in the Elite Mentoring program and the Quantum Mastermind. I speak out of my heart when I say that you have no idea how much impact you have on my life. I love teaching, and I love trading. Yet trading can be a very lonely profession. I cannot talk about it with my wife or most of my friends, who are not interested. The opportunity, then, to work with a group of likeminded, brilliant, committed people who want to learn and improve is an enormous joy. They ask smart questions, they give great feedback, and they have made me a better trader. They are a big reason I can live my purpose with joy.

      ]>

      Foreword

      By Tom Basso

      It is quite the honor to pen a foreword for a book by a friend and a very smart, purposeful trader. Laurens gets it. So many traders don’t get it. There are several reasons why this is one of the top books I recommend to traders trying to improve their approaches to the various markets. Let me offer some thoughts here.

      So many traders I run into think of trying to create the perfect system, or I prefer the word strategy. If the approach does not always produce a profit and they have an idea to modify it to improve the strategy, off they go with the latest tweak and on to the markets using the new latest greatest idea. Months later, another idea, another tweak, and the process repeats.

      Laurens approaches this from a quite different view and one which I have used for decades. New ideas don’t need to be a tweak to an existing strategy. They can be a whole new system. In other words, there’s no reason why you can’t run multiple systems at the same time. In this way, multiple approaches can diversify each other, helping smooth performance and reducing potential drawdowns.

      Why stop at two strategies? With computers and trading platforms, you can start dreaming up lots of approaches to trading that can be valid and fit your needs. Why stop at just trend following. How about mean reversion? How about hedging? How about having strategies built with a bias towards producing profits in up markets and others designed for devastating down markets? How about shorter-term logic for sideways periods when market trends are brief.

      All these focused strategies help make the portfolio robust in ALL market conditions and help to reduce the corporate risk of any one company’s stock to a manageable level. When Laurens claims to trade fifty strategies simultaneously, he is not kidding. And it takes him extraordinarily little time once per day to pull all that off, an impressive feat.

      Laurens believes, as I do, that every trader is different. There is no one way that will be successful equally for two people with different skill sets, risk tolerance, capital levels, time commitments, and geographical locations. It simply is not possible.

      In other words, Laurens should not trade like you trade, and you should not trade exactly like Laurens. He is showing you easy-to-understand concepts that move the trader in the correct direction. Where you take it from there is up to you. You might end up with a few systems and keep it simple, or you may dig in deeper and develop some indicators of your own. In the end, you will arrive at a different answer to your specific trading challenge than Laurens’s answer to his own personal trading challenge. Laurens and I have compared notes on our trading, and he and I trade very differently, but both of us are successful at what we do using the concepts outlined in this book.

      Laurens understands position sizing’s importance in trading. He nails the subject in this book. Without good position sizing concepts, most traders will struggle. They will suffer a more erratic, psychologically difficult set of results and, often during stressful conditions, seek greener pastures with yet another new approach.

      While Laurens is not a statistics guru, he totally understands improving the return to risk of your portfolio. I have had conversations with professional money managers that cannot grasp the mathematics of adding lower-return, non-correlated trading strategies to improve the return to risk ratio of the portfolio. Laurens knows firsthand that adding a strategy designed to achieve an extremely specific objective in a certain type of market can reduce drawdowns. Lower risk improves the mental side of trading, which traders and money management clients frequently overlook. So often, when times get tough, the tendency for traders and investors to abandon the plan and move on becomes overwhelming. Keeping the return to risk as high as possible simply makes the ride easier to tolerate.

      Laurens spells it all out in detail with a twelve-ingredient list of items that every system or strategy must have to work over the long run. Miss any one of these, and you are certainly making your trading life more difficult. Most traders I talk with may have half or fewer of these concepts in their trading strategies and ultimately fail for their absence.

      When Jack Schwager tagged me with the Mr. Serenity moniker in The New Market Wizards, he saw that I treated trading like a business. There were no emotional swings, but instead, lots of number crunching with computers and smooth, almost tame returns which contributed to my serene state of mind. When I

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