Creative Criticism

After yesterday’s introduction of Thor I received quite a bit of input and various follow up questions via email, most of them supportive and encouraging. However despite best intensions and having worked countless hours to produce the best trading systems possible there is always someone who doubts my/our professional integrity or simply jumps to hasty conclusions when things catch a rough spot. Nothing new and I’ve developed quite a thick skin since I started this blog.

As you can imagine over the past few years I have faced my share of criticism, some constructive, and some simply borne out of frustration or envy. Putting yourself out there will invariably invite detractors over time – nobody is perfect and we all make mistakes or things often don’t go over as you planned them. Most of it I simply fade out, however I didn’t want you to miss out on this little jewel I received early this morning. Actually that person sent me two similar messages in succession (he must have hit the send button too early) and after reading them both I thought that some of you may actually be sharing his (or her) opinion. Be this as it may I decided to post my answers right here in the open:

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Hi

I was reading about thor. Am happy to pay you $500 per month but get it right.

You guys keep claiming big things and nothing works. CI was touted as 30R per pair per year. It is at 29R overall. The SQN i measured was 1.3. Some website out there has already ranked your SQN at 1.3.

Heisenberg was touted as another big thing. What a flop that was.

Then came Darth mole. The comment then was “this will change your trading..”.

Now we have Thor….

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Now we have thor. The touted SQN is 3.5. Do you know what 3.5 means? Absolute gem of a system. Do you think you guys have that.

Atleast publish some results. Actual trading results. All we have is some word about scot. Scot is made out to be the some brilliant guy except that all his previous products are failures.

Ok now we have thor. Lets see where it goes. Is it just about making a quick buck of fees? Because then you guys will just be like some other forex blog.

In my opinion there cannot be innovation that came to your mind that all of a sudden makes you 3.5. Gi ve it 6 months like CI and it will be at 1.3. If this innovation is so good, why cant you apply it on CI and make it atleast recover something? It has lost 30 R in 60 days. All this while guys like ashraf laidi are making 30% and 40% in a month. And his results are published and verfiied unlike yours which is just your word. In my opinion, get the system right, publish results and then start charging.

You guys are sitting on a timebomb waiting for someone to put a post on FPA or somewhere where people who have lost money of your CI will start ranting.

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Okay, so let me take this on piece by piece if I may – I’ll be quick and to the point. If you think my responses are attempts to bend the truth then I invite you to add your comments below. That’s what it’s there for.

“I was reading about thor. Am happy to pay you $500 per month but get it right.”

Heck, don’t tempt me 🙂

“You guys keep claiming big things and nothing works. CI was touted as 30R per pair per year. It is at 29R overall. The SQN i measured was 1.3. Some website out there has already ranked your SQN at 1.3.”

He’s right – since Jan 1st 2014 Crazy Ivan has tickled the 50R mark in late March and then proceeded to drive us nuts for the remainder of the year. It’s currently at 29.99R – in the plus – here’s the profit graph:

It’s been a tough year for Crazy Ivan but may I point out that it is still in the plus for the year. All campaigns are being logged in real-time via Google spreadsheets. If a campaign ends and logs its results the spreadsheet will be updated a few seconds later.

I agree that Crazy Ivan has been through a rough spot in the past six month (then again if you call sideways rough – perception is subjective and usually involves recency bias) and there are currently only a handful of subscribers left. Actually I’m surprised that those guys are still subbed as Scott told me from the get-go that very few of you would be able to sit through an extended sideways period, let alone a real drawdown (e.g. 20R+). We projected 30R per year on average and we’re clearly behind – odds are we’re going to be closing the year below that goal. Then again this year ain’t over yet and this is nothing out of the ordinary.

Perhaps we’ll close 10R above today’s mark or perhaps we’ll close 10R below it – neither scenario would surprise me and it is to be expected for Crazy Ivan. Scott in particular has been very outspoken regarding the fact that CI can be very tough to follow emotionally. After all he’s traded it for about a decade and it often pushed him to the edge.

At the danger of re-heating old material – I think this is a perfect opportunity to once again reset all our expectations and perhaps remind you of the cumulative big picture approach we are favoring here at Evil Speculator. Watch the video above – the good part starts at the 38 minute mark but I recommend that you really watch all of it. Nick Radge makes some very brilliant point and I consider this clip a must see for anyone even thinking about trading automated systems or joining a fund.

Anyway, CrazyIvan is currently only 29R in the plus for the year and we are being criticized. Can you imagine the emails I or a guy like Nick Radge would receive if there was a negative year? Or perhaps two in a row? That thought makes me question the wisdom of offering any trading systems to anyone here. Scott for one keeps advising me to close the blog and simply trade my own money or start a small fund.

“Heisenberg was touted as another big thing. What a flop that was.”

90% of Thor actually is based on Heisenberg – it took me approximately one year to implement all the rules and test various market categorization criteria. We released it into beta for about two weeks – for free of course. Then we realized that it was not performing as expected and immediately decided to dispense with sending alerts. Let me also point out that we repeatedly stated that nobody should take any live trades during the free beta testing period. After an additional six months of blood, sweat, and tears, Scott started to trade a slightly adjusted rule set which we now call Thor. I watched him turn $600k into $840k in 60 days and then decided that, in combination with 7 years of backtested results, it was sufficient evidence to implement the updated rules into the old codebase. It only took me one week to convert Heisenberg into Thor which speaks to its similarity.

Then came Darth mole. The comment then was “this will change your trading..”.

DarthMole is running as we speak – it’s still available for FREE after more than six weeks. It’s not a trading system and its job is to predict price volatility – nothing else. Here’s a snapshot of the current live grid – a few symbols are missing as I’m running them on a separate workspace:

Look at those charts – I personally would call this nothing short of sensational. The reason I haven’t talked much about it here in the past few weeks is that on top of my blogging and trading duties I have been putting in 14+ hours every single day on a my machine learning project and most recently decided to take on Thor as well. It is not my fault that very few of you are realizing the significance of this. Being able to predict price volatility is huge.

Which in part also enforces our opinion that only a small number of people reading this will be successful trading Thor or any other system out there. As Richard Dennis once put it so aptly:  “I always say that you could publish my rules in a newspaper and no one would follow them. The key is constancy and discipline. Almost anybody can make up a set of rules 80% as good as, what we qualified our people. What they couldn’t do is give them the self-confidence to stick to that system even when things are going bad.”

Now we have thor. The touted SQN is 3.5. Do you know what 3.5 means? Absolute gem of a system. Do you think you guys have that.

Yes, we know what SQN means – as a matter of fact I keep pointing people toward a pertinent page that explains the formula step by step. I’m not trying to be funny or sarcastic here – we are all about SQN/expectancy here.

Atleast publish some results. Actual trading results. All we have is some word about scot. Scot is made out to be the some brilliant guy except that all his previous products are failures.

Here are Scott’s statements for the year in PDF format. He asked me go ahead and make them publicly available on the blog. May I also point out that Scott has been posting daily snapshots of his trading account in the comment section since he started trading HammerTime – which I renamed Thor.

Ok now we have thor. Lets see where it goes. Is it just about making a quick buck of fees? Because then you guys will just be like some other forex blog.

Do I really have to answer this? I guess I do… And NO – actually I have been wondering whether or not it actually makes sense at all to offer this as a sub and it’s part of the reason I am reducing access to it and only will allow 100 subs ever. Some of you are clearly ill prepared to trade automated systems and a few of you should not be trading at all. You tell me! Perhaps it’s best to wait six months or more until we have a more extended track record. In the end you can always choose to wait until then, actually I strongly encourage you that you do just that.

In my opinion there cannot be innovation that came to your mind that all of a sudden makes you 3.5. Gi ve it 6 months like CI and it will be at 1.3. If this innovation is so good, why cant you apply it on CI and make it atleast recover something? It has lost 30 R in 60 days. All this while guys like xxx xxx [name omitted as I don’t permit implicit advertising] are making 30% and 40% in a month. And his results are published and verfiied unlike yours which is just your word. In my opinion, get the system right, publish results and then start charging.

Innovation isn’t always linear – sometimes a few small changes in a rule set change the outcome significantly – Ivan has been extremely verbose on that subject. You could even trade the same entry system with completely different campaign management and turn a losing system in a winning one and vice versa. I don’t follow xxx and thus I am not familiar with his work. My question to you would be why you’re not trading along xxx then – heck, if he really banks 30% a month I may just sign up myself! 😉

You cannot just turn CrazyIvan into Thor – they share some similarities and although I was able to turn Heisenberg into Thor (as it was based on the same rationale/research/idea) the former is an multiple candle entry system while Thor is a pure trend trading system. We are using hammers as entries but we could just as easily use another entry method as the hammer is only a result of an underlying market condition. Also, you may have missed the part where I said that all current CI subs will get a free three month subscription to Thor after which they can decide on their own if they want to continue.

You guys are sitting on a timebomb waiting for someone to put a post on FPA or somewhere where people who have lost money of your CI will start ranting.

Hey, get in line. Someone always loses money – nature of the beast – the market is a big bad meat grinder and retail is drawn to it like moths to a bright shining light. I can only do so much to keep you guys out of trouble. Of course when you do trip it’s much easier to point at me or someone on the outside. The very same people who will call you a genius when you have a good year will tear you to pieces when you’re down (and I’m not even down!). I have been hosting this blog for six years plus now and for every 1000 positive emails I get perhaps one or two nasty ones. So frankly speaking I’m pretty happy about what I do and I sleep well at night.

Now you may think I am pretty upset about this email but I am really not. Actually I’m grateful he wrote me as it was an opportunity to face expected criticism face on and early in the process. In some ways I completely agree with how this guy feels. Yes, we could be full of shit and perhaps we made some type of horrible mistake somehow. You probably should not sign up for Thor until you see us bank coins live here on the blog for at least a few months.

When to sign up or trade Thor via our alerts is a decision I cannot make for you – I have to be focused on delivering the best product possible and keep up the high standards we set for ourselves. If you have reservations then you better sit this one out or perhaps only trade very small position sizes, i.e. 1/4R or even less. As it says right on the bottom of every alert that is being sent to you (say it with me): Past performance is not indicative of future results.

Okay, while I have your attention here’s another question I received this morning:

I was thinking to sign up for Thor. But there is only $10K at my disposal for trading now. Does it make sense to even think about signing up having this amount available? I can hardly imagine what trading can I do with 1R or so.

It would make sense if you just limit yourself to Forex. However keep in mind that the $149/monthly fee represents 1.5% of your equity, right now about 1.5R. So if you perhaps only bank 5R next month then you’ll really just bank 3.5R (excluding commission and slippage). Over time, if you keep winning this becomes negligible. If you lose 5R then paying that extra 1.5R will feel even worse, and if you keep losing it’ll really start pissing you off. You may even feel tempted to write me a less than friendly email.

I know it sucks but that’s the reality of trading with small accounts. Of course the advantage of trading small is that you are more nimble and can get in/out easily. And if you wind up blowing your account, a lot less lost. Not to diminish the emotional impact however and it’s all relative – for some people losing $5k feels like losing $5 Million to others.