The Virtuoso Trader is one that works as hard as its simile-sake, the artist. It is not only important for a trader to constantly educate, but to also execute the learned strategies and tactics as brilliantly as the first chair violinist for the London Symphony Orchestra. An orchestra has 100’s of pieces of music to choose from, but they keep practicing the same few over and over. Traders have the same effective selection of methods with which to trade. The virtuoso musician knows to work on the things that get the results that last a lifetime and cease the nonsensical exercise, and the Virtuoso Trader does the same. No two virtuosos are the same. They are set apart from the crowd of retail traders, and by default set apart from each other.
It isn’t the profits and bank-roll that determines success in the beginning of a trading endeavor. Longevity is the key to it all. If a trader is still around 5 years from now, he or she is set apart from the quote-unquote “90% that fail.” I can attest to the beatings the market can put on a person. Good trading is a result of an ability to learn to stop what doesn’t work and keep doing what does work.
If it takes a violinist 10 years of schooling and practice to achieve that virtuoso status from their peers, then it shall take as long for a trader. Everyone is different, and virtuosity like beauty, is in the eye of the beholder. Nobody gets to determine or claim that title for their own; one must only strive for it. I fashion myself a virtuoso-in-training, not a guru or maker of perfection in trading. Instead, I humbly offer a ton of the tools and analysis pertaining to many strategies, methods and tactics that I have tested or used with success, or more often than not for new systems, failure. You learn that few things really work for you and the new things everybody likes to test rarely pan out.
Remember, the market is a battle of two sides: people supplying the market with contracts or shares for sale, and people demanding contracts or shares with their liquidity. Bull, bear, long and short are secondary to the battle. These biases are nice and sometimes helpful to make, but the brutal market could care less how you are biased. It is in way like surfing, because the water is so much more powerful than you are. Many often fall several times before learning to surf upright. Tread carefully, trade smart, and never go into any trade without the full plan. Good luck!
Why the name, and who is B3? ~ This is a blog of trading ideas and trading education learned and gathered from over 2 decades of testing and trading. It was created by me the author, Jake, a.k.a “B3” or “hammondB3”. This is my trading handle, and it refers to my favorite instrument the Hammond B3. I am a professional musician and once strived to be a virtuoso, and here I share my journey to one day have the same success in my trading.
What are your areas of focus in trading? ~ If it has a price that moves I am interested in learning how to trade it, but I mainly focus on futures and sometimes big-name stocks. Let’s define some words (my tools), and hopefully through this explanation of my system trading, the picture becomes clear.
Logic, Code, System, Strategy, Methods, Tactics, Metrics, Quantitative, Algos, Optimization, Backtesting, Simulation, Automated Bot, Rules, Framing the Market
Logic is sometimes referred to as code in the computer world. For this blog’s purposes logic means common sense. It is the base of every strategy’s reasoning and driving several points within a trade. Also, for this blog’s purposes, code means computer language and mathematical formula. It may take a proper strategy plan, method, and tactics to test if the logic is sound. A simple example of logic: if you make a certain amount of profit on a trade, it should never be let to turn into a loser. The logic is complex in that there is a certain point you trail too tight (getting out too early to let run), or not tight enough (getting out too late leaving too much profit on the table). Without tools, the logic cannot be verified with trusted results, nor can it be modified properly to find the place where to reach such a balance for a trail setting. Combining logic with strategy & method, you have a system ready for backtesting, then real-time simulation, and finally tactical implementation.
A strategy is a reason for entering, for which the trader has a FULL plan in the event of up/down/side price movement. It is THE PLAN! Methods are the way in which the trader receives information and evaluates or enacts a strategy, or what the trader has on-screen to make decisions per the strategy’s plan. Quantitative methods are known as algorithms, or “algos” for short. I use algos to apply methods to strategies to possibly improve the strategy’s base plan (optimization) or test the base plans of strategies against each other (backtesting). Metrics and statistics are then used to evaluate the results of testing to determine whether the system is viable and profitable. There is a ton of education in my understanding of analysis metrics. Tactics are how the trader places the trades and physically executes the plan, i.e. stops, targets, trails, etc. When algos fully execute the tactics for a trader, it becomes an automated bot. Tactics can hurt or help the system in live trading, and they are also hard to account for in backtesting. This is why working out tactical kinks in the live simulation step is crucial to the success of most systems.
Rules are made from past experiences cataloged in a journal. Rules are executed in the present. Rules change by the desire for a better future, as the trader has experiential or quantitative reasons and determined a change can improve results. I have followed my rules and have proven with several tests that many things can work in the right market conditions. Of course, only when being disciplined does it pay off. It is important to have only a few rules to keep them straight and poignant. Don’t follow other people’s rules, instead make your own rules based on what you experience in success and especially, failure.
What is the goal of the blog? ~ The goal with the blog(s) is to share my framing of the market, that is the measuring of the market conditions. Then, I have links that access some indicators that I write for both TradingView and TradeStation. I hope to educate the readers and live up to my solid reputation as a data-backed student of the trade, and consistent framer of the market. Many have told me I am a great chartist and a great teacher, so I hope to scale that feedback here as I strive to be The Virtuoso Trader, trading from my view of the sea.