The 10 Minute Trading Formula | Achieve Consistent Results with Proven Systems

Hi, my name is Adrian Reed and I'm the founder of Enlightened Stock Trading. And welcome to this free training called the 10 minute trading formula. How to achieve consistent results with proven trading systems. So you're probably wondering whether this training is for you. So let me ask you a question. Do you want more confidence and control over your trading and better results in all market conditions? If you do, then you're absolutely in the right place. So stick with me for the next few minutes and I'll show you some game changing processes in a completely different way than to think about your stock trading so that you can improve your results. Get far more confidence across a wide range of market conditions. Since we're going to spend a little bit of time together on this training today, I thought it might be useful for me to spend just a couple of minutes and tell you a little bit about myself and my trading journey so you know who I am and why I'm speaking to you. Would that be okay? All right, great. So over the last 20 plus years, I've been a consistent and profitable systematic stock trader. During that time, I managed to pay off all of my debts as a result of my trading profits, bought a couple of houses as a result of our trading, and built several seven figure trading accounts. In the end of 2012, I escaped the corporate world to trade full time. Now I coach and mentor traders from all over the world to profitability and I work with hundreds of traders every year. My own trading is fully automated across the ASX, Hong Kong, US and Canadian stock markets as well as crypto. In 2019, the locational freedom that trading gives allowed us to take the kids out of school and travel the world for the year, which is just fantastic. Now after all of those travels, the kids have said we want to stay in one place and finish our school. They had been to seven different schools, so it's probably fair enough. So we've now settled in Australia. We're in a small coastal town called Port Macquarie, four hours drive north of Sydney, and we're here for a couple of years while the kids finish off school. Before we go any further, I just want to remind you that everything we talk about today is general education only. I don't know you or your circumstances yet. I cannot give you personal financial advice. So please consider whether all this information is right for you before taking action. Good. Okay, great. Let's get into it. So what are my goals for you today in this short training? First of all, I want to highlight the main challenges that traders face and show you how you can resolve them fast so you can stop wasting time and finally start moving with momentum towards your trading goals. Secondly, I want to give you a real trading system example so you know what a good strategy looks like. Because if you don't know what a good strategy looks like, how are you possibly going to find one? So I'm going to give you one right off the bat in this free training. Then I want to give you some benefits of self directed systematic trading. I really want to explain why I believe this is the very best way for the vast majority of traders to take control of their personal wealth building. Finally, I'm going to show you a game changing trading process that will save you literally hours every single day. This process transforms the way you think about making trades and will make you a better, more consistent, more confident and much calmer trader who generates better results. So how does that sound? Great. Good. But before I go any further, I really want to tackle the elephant in the room because I know it's going to distract you from the value that I'm about to share in the rest of this training. And the elephant in the room is why is Adrian teaching trading if he's such a good trader, why not just trade? Why go to all the effort of setting up a business like enlightened stock trading, helping other traders? And here's the thing. When I left the corporate world in 2012, it only took about six months and I was sitting at home, bored, lonely and depressed, craving for people to talk to, just hoping that someone would want to talk to me about my trading. Because I don't know about you, but in my life, I didn't have any other traders. I was doing it completely alone. And so I started talking to people who wanted to learn because I had achieved the dream. I'd quit my job. And there were dozens of people from my corporate life who wanted to do the same. And so I taught them. I started talking to them about how I did it. And then eventually that snowballed into what you see today today in enlightened stock trading, which is a business that helps hundreds of traders from all over the world become consistent, profitable and confident every single year. So enlightened stock trading is a passion project. It keeps me entertained, it keeps me in contact with the people I love to work with and talk to. And it also gives me, obviously another form of diversification, which can't possibly be a bad thing. I mean, more diversification is better than less, and more traders who are successful is better than less. And if I can Transfer some of my knowledge to you and help you succeed, then I feel like I've achieved my purpose as well. So that's why I developed inline stock trading really to help grow the pool of profitable traders, transform the way trading education is undertaken and have a network of community of like minded people who I can work with and talk to. Just that I've got traders in my life. Okay, so let's talk about the challenges that traders face. There are so many challenges. I've got 25 listed here and don't worry, I'm not going to go through laboriously through every single bullet point. But if you take a moment and just read down this list, I bet there's at least a dozen that you have come across in your own trading journey. Inconsistent results, stress, time consuming, conflicting signals, confusion, not sure whether you've got an edge, insufficient diversification, occasional large losses, really impacting the way you're trading. And it goes on and on and on. Just pause the video and count how many of these you've experienced for yourself. Most traders have experienced many of these and I experienced many of them in my own journey as well. And I want to show you the quickest way to eliminate all of these challenges in one move. How does that sound? Brilliant. So let me start by stepping back and talking about why trading is so hard. Here's how most traders make decisions. We look at multiple different inputs. We look at price movements of the markets, we look at news, we look at analyst recommendations, we look at tips, the current movement in our portfolio and everything that's happening in our personal life. We take in all of this information and then we process this through everything else that's going on in our head, which includes all of our beliefs, all of our cognitive biases. And then we take action and we generate a decision and we take action on that decision. We wonder why with all of those different inputs and all of the different strange beliefs that we all have, why we end up getting inconsistent results. Well, it's not hard to see why trading is difficult when we're processing it through all of our messed up psychology and we've got so many different inputs into our decisions. The reason trading is hard is because we've got dozens and dozens of psychological biases in our head that we just can't escape because we're human. Humans just naturally don't make good traders because we're psychological emotional beasts. The solution is actually surprisingly simple. There's two ways to you can go about improving this. The first is the slow way. You can do Years and years of psychological work and gradually get more and more consistent actions and results. Now that can improve your trading. The trouble is it takes years, it's slow. The faster way is to bypass your psychological challenges. And the way we bypass our psychological challenges by realizing that, that we can make our decisions based on price data alone. We take in all of the price data from the markets and we overlay objective rules. Objective rules. It says if A and B and C are true, then buy. If D or E is true, then sell. Now I'll give you an example of what these objective rules look like. But when we have objective rules that give us an edge, we can make consistent decisions and get consistent results. As you can see on the chart on the right hand side here. Now, objective rules, you might have heard of this as a trading strategy or a trading system or a trading algo. These are all words that mean roughly the same thing, which are objective, logical rules that tell you exactly when to buy, how much to buy and exactly when to sell. The rules make the decision to buy and sell, not our psychology. And this is the key, the key to success is bypassing our psychological issues and putting rules in place that give us an edge. So what does the system look like and what does it actually do? We need to make sure that every action is defined by a rule so that we can test it and we can avoid our emotions getting involved. So if you look at a trading system, there's going to be rules for the setup, which is the conditions under which we're willing to take a trade. The entry, which is the precise moment we're going to get into the stock. The stop loss, which will get us out if we're wrong. The exit, which will get us out later on if we're correct, hopefully with a profit. And wrapped around all of that are portfolio risk management and position sizing rules to keep us in the game. There's no subjectivity or judgment in a complete system. It defines everything that you need to do in the market, thus bypassing the psychology and putting the decisions in the hands of the rules. Now you're probably asking, how do we know if that's even going to be profitable? Now, I'm glad you asked and I'll talk about that later in this presentation. Alrighty. So let me give you a real trading system example just to bring this to life a little bit. So here's a simple system on the screen here. There's some, some code from the trading software that I use called amibroker. And you can see there's several rules. There's a trend filter which says we're going to buy only if the closing price is above the 200 day exponential moving average. That says the stock's going up. There's a volatility filter which says the average true range divided by the closing price is greater than 8%. That says we're only going to buy volatile stocks. There's a liquidity filter which says the 20 day moving average of close times volume has to be greater than a million bucks. That means the stock trades a high turnover each day, allowing us to get in and get out without too much slippage. And then the precise entry trigger, which is the moment we get into the trade, the entry trigger is that the three day RSI crosses below a value of 5. That means the stock has had a heavy sell off for a couple of days and we're going to buy in anticipation of a bounce. This is what we would call a mean reversion trading system. So we're buying a dip in an uptrend. So the stock is going up, it dips heavily, we buy it expecting a bounce, right? Okay, so after we buy it, then we're going to sell. As soon as the stock closes above a three day exponential moving average, or if the stock continues down and closes below the 200 day exponential moving average, then we know the trend is changed to down and we want to get out. So they are all of the rules for the buys and sells of this system. We have the buy rules here strung together and we have the cell rules here strung together. If either of those cell rules are true, we get out. Now sometimes you're going to get more trades, more signals than you can take on a single day. So we have to rank these trades from best to worst, these signals from best to worst. So we only take the best signals. So we rank them according to lowest RSI first, lowest relative strength index. First we apply stop loss for safety. It's a 40% next bar on open stop. And we size our positions. We have 10 equally sized positions using this system. Now this is a mean reversion system. You can apply it to the Canadian stock market. It also works on the Australian stock market, but it's better in Canada. And this is what it looks like. And because the rules are coded, we can put them into trading software. In this case I'm using amibroker. We can apply those rules to all historical to generate all historical trades from the last 30 years and assemble a portfolio. And if you followed these rules over the last 30 years, these are the results that you would have gotten. Now, this system generated an annual return of 6.6%, which doesn't sound very exciting, but bear with me, because it generated a return of 6.6% while only being invested in the market 1.3% of the time. So the vast majority of time, it's sitting in cash waiting for a trade, and then a trade comes along and it goes in, and then a couple of days later, it gets out very, very quickly with a profit. So the risk adjusted return, which is the return per unit of time invested, is actually really, really high. You can see here it's over 500%. But the annual return, because you don't take many trades, is 6%. So over the last 30 years, this system took 400 trades. 69% of them were winners. The average win was 12%. You can see here, the average loss was just under 10% here, 9.68%. The largest drawdown was 8.5%. And the return divided by the maximum drawdown, which is a great measure of smoothness, is 0.78%. So here's an example of a system that works. It's very, very simple and allows you to wait on the sidelines like a sniper and then just jump in whenever the market conditions are right. Buy the stock, sell it a couple of days later for a quick profit. This is an example of a mean reversion trading system. Okay, so how does this actually change the game for you? What does this really mean for you as a trader? Well, let's talk about the process. Because when you have a trading system like this, a set of objective rules, the process is completely different to probably what you've been used to. Let's talk about the old way. The old way that most traders make trading decisions. First of all, you update your data so that you've got all the current stock prices for your market. Then you run scans to see all of your favorite setups, and you get a shorter list of stocks that you want to look at. After you run the scans, you check the charts, and you might have 20 or 30 charts, and you look through all of those charts and every single night checking for the market conditions. When you're looking at that, you're looking for support and resistance and drawing trend lines and trying to decide whether or not you can get a good trade out of that chart, whether you can get the right risk reward ratio, whether there's a good setup, and so on and so on. After you've just looked at the support and resistance and trend lines, you look for confirming indicators. Maybe you've got some moving averages, macd, rsi. You've got all sorts of things on your chart. You're looking for all of these confirming indicators. You also look for announcements. You look for news to make sure there's nothing else that's going to go wrong, or you want confirmation that you're making the right decision. So you're checking all of these different sources to make sure that happens. Then you decide your entry price and your stops and you draw them on the charts. I'm going to get in here, I'm going to get out here if I'm wrong. After you've done that, you calculate your position size based on how you feel the confidence in that trade, how well your approach has been going, whether the market's going up. You determine how much you're going to put into each trade. After that, you watch the market at the lower time frame because it's really important to watch the lower time frame to make sure you. Like a sniper, you get exactly the right price, right? So we wait till the market opens, we watch the price, we judge when we're going to enter, we take the shot, we put in our stop, and now we've got the trade on. After that, we watch the chart intraday to make sure that we made the right decision. Is it moving in our favor? We review the chart every night to see if there's an exit. And we make sure we check the news, we check the announcements, we look for negative indications on the chart to see if we should get out to take a profit or prevent ourselves from having a massive loss. And then finally, we exit the trade. And we wonder why trading is exhausting, difficult and stressful. The old way is just a terrible way to trade. Let me show you a new way, a better way to generate your trading decisions. The new way. First of all, update your data. Secondly, run the backtest using your trading software and your objective rules to generate your buy and sell signals. This takes about 30 seconds per system. You just press the backtest button. It runs the backtest, it generates the entire history of results and the new trades that you've got to take tomorrow. Then you place those trades, close your computer, and you're done. Systematic trading like this is so much calmer and gives you so much more consistency, so much more confidence, because you're trading according to an exact set of rules every single day the same way. And you can follow those rules because you've built confidence in them through backtesting. Like I showed you on the previous slide, the new way is astronomically better. And it allows you to grow and improve and become profitable and consistent far more quickly. And even better, you can automate your entire trading process. So for a long time now, all of my trading decisions have been completely automated. I design the strategies, I allocate the capital to them, I give them to the computer. The computer runs them every day, places the trades, and I get an email report each day showing me what trades I've placed using the systems that I designed and I built confidence in. This is a game changing process that makes you consistent, confident and profitable far more quickly. So what are the other benefits of systematic trading? There's so many. First one, it shortens your learning curve. No more taking five years to figure out how to make money in the markets. Fumbling around, I've spoken to so many traders who have been 5, 10, 15 years still trying to figure out how to make money out of the markets. It eliminates emotional decision making. It generates consistent, repeatable results. One of the best things about trading systematically is, is that I use a system and you use a system. We get the same signals every day, every time. That means you don't have to have 20 years of judgment and experience to figure out whether you should take this trade or not. You need to know how to run the system to generate the signal. And then you get that signal and you get the same one as I get every single time. So the knowledge is transferable quickly. Which brings me to the second thing. It takes minimal time. It's far quicker to learn, it's far quicker to execute. It also builds confidence because you can backtest your results and see a lot more history. It can backtest our trading systems over 20 or 30 years of market history, generate thousands of trades and build confidence that they actually have an edge. It also improves diversification so effortlessly because it only takes a couple of minutes to run each system. You can run a system for the Australian market and the US market and the Hong Kong market and the Canadian market, and it still only takes you a few minutes each day. You can also hold many more positions because you don't need to understand every single fundamental factor about every single stock. You can use the systems to control your trading decisions and you can run many systems very quickly. So you can have far more stocks in the portfolio and you can have different systems to make money from different market conditions. More on that later. Also, it improves profitability because it eliminates mistakes because the system is generating the signals. I can't tell you how many When I was trading with a discretionary approach, how many times I missed good trades or took bad trades because I just made a mistake in my analysis. But a system will generate the signals correctly every time so you know exactly what trade to take. And then finally, and most excitingly, it allows you to evaluate whether your emotional impulses are actually helpful. I'm going to show you an example of this because this is one of the coolest, most powerful things about systematic trading.

Let's say you've got a trading system, and I gave you an example of a trading system before, and this was a mean reversion trading system. And one of the things I pointed out was it has a 40% stop loss. So if the stock price is $10, the stop loss is 40% down at $6. It's a really wide stop. You might be saying to yourself, wow, 40%, that stop loss is way too wide. I don't risk that much on every trade. Right. Let's tighten that stop up and make this system a whole lot better. Clearly, Adrian doesn't know what he's talking about. So let's run a test. We can change this system from a 40% stop loss to a 5% stop loss and run the backtest again. And that only takes a couple of seconds. So here it is, the equity curve at the top, top with a 40% stop loss, and you can see the smoothness of the, of the growth of the account, and it ends up at $867,000. And then we run the test again with a 5% stop, and you can see it's much more jagged, there's longer flat spots, and it ends up at only $662,000. And of course, when you run the backtest, you get a whole lot of performance statistics as well, like you saw in an earlier chart. So very quickly, you can take that emotional impulse of, oh, I want to have a tighter stop loss, and you can test it and see if that's actually a good idea. And just a little hint, the vast majority of our emotional impulses are not good trading ideas. But you don't know that until you're able to test them. This is why it's so powerful. Okay, so finally, you can build real trading confidence because you've got objective rules that you can follow and generate the right signals every time. You can back test them to build confidence. And every emotional reaction or impulse you have to change the way you're trading to change the system. You can backtest and determine whether or not it's a good idea. So finally, you start to build real confidence in your trading. Now, the secret to doing this consistently, to trading consistently no matter what the market is doing, lies in something I mentioned just briefly earlier. It's diversification. Now, what could the markets do next? Is the right question to ask. And there's basically nine different things the market could do. We can have a bull market, a sideways market, and a bear market. And within that, the trend could continue. There could be a temporary shock against the trend, or it can change trend from bull to bear, bear to bull, et cetera. So it's basically nine combinations. And the way to make money consistently is to make sure you've got different strategies that make money in different market conditions. So what I do is I assemble a broad range of systems that make money in different market conditions, and then I combine them together and into a portfolio and allocate different percentages of my capital to different strategies so that I've always got something that is able to make money no matter what the market is doing. You can see here on this chart, I've got 57 different systems that I monitor and track. And you can see the performance of those systems over time. And here what I'm doing is taking those systems and allocating a certain percentage of capital to it to generate the smoothest, best our overall portfolio performance. So the secret to trading consistently no matter what the market is doing is A, go systematic, have objective rules in place, but B, have a portfolio of systems that's able to make money from different market conditions and allocate capital to each of those systems in a strategic way to make sure you have the best overall portfolio performance. And that's what we're doing here.

So this sounds complicated, right? How can we do this in just 10 minutes a day? Let me show you the process. It's actually really simple. First of all, eliminate discretionary trading. You cannot do this in 10 minutes a day. If you're making a discretionary decision about every single stock, you have to go 100% systematic, buy or build trading systems that work. I've given you an example of one. In the Trader Success System, my main program, you get 20 plus systems that work covering a whole range of stock markets around the world. Australia, us, Canada, Hong Kong, London and more. Get your portfolio backtesting software. I use amibroker and historical data. I use Nor Gate data for Australia, US and Canada, and I use Metastock data for the rest of the world. Then you use the backtesting software to find your signals. Each day it takes about 30 seconds per system to run the backtest and generate the next day's signals. And then you place the trades in your broker. I use interactive brokers. You can use whichever broker you want. So you can do this entire systematic trading process in just 10 minutes a day because you've eliminated the vast majority of decisions. Update your data, run your backtest, get your signals, place your trades, job done. It simplifies the whole thing, makes it consistent, allows you to build confidence by backtesting so you know you've got an edge and transform informs everything about your trading. Going systematic is the best thing that most traders can do. And this whole daily process can be fully automated. Like I said, I haven't taken a manual trade for years because the computer does the work, I do the monitoring and the system design development. Okay, so what should you do next? Well, if you've liked what you've heard today and you want to learn more about systematic trading, if you want to install a systematic approach into your portfolio so that you can build more confidence and better results quickly, what I want you to do is click the link below and schedule a 15 minute trader acceleration session with me. During that session, we're going to do a couple of things. First, we're going to identify the top three things that are holding you back and causing trouble for your trading. Then we're going to form a plan for what you need to do next to move your trading forwards. And finally, if you're a good fit, I'll share with you how I can help through the Trader Success System transform your trading. The Trader Success System is my flagship mentoring program. And in that program we guarantee to get you up and running with your first system in six weeks. And we guarantee that in six months we'll have you up and running fully automated with a portfolio of three or more systems that you're confident in or will work with you for free for another six months to make it happen. So what I want you to do is click the link below, schedule a free trader acceleration session with me, and we'll talk about how you can take your trading forward again. My name is Adrian Reed from Enlightened Stock Trading. Thanks so much for watching and I'll you see. See you in your trader Acceleration session. Bye for now.