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Chris Vermeulen
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Chris Vermeulen the founder of Algorithmic Trading Systems. This automated investing system is designed for individual investors and traders. He is also the editor of the TheGoldAndOilGuy newsletter which is designed for gold market traders providing quality ETF Trade Alerts,... More
My company:
AlgoTrades Algorithmic Trading Systems
My blog:
TheGoldAndOilGuy - Gold Market Traders
My book:
Technical Trading Mastery - 7 Steps To Win With Logic
View Chris Vermeulen's Instablogs on:
  • Removing The Problem From The Trading Equation I.e YOU!

    Simple automatic investing that makes you money is something we all dream about. Lets face it, who would not want to be making money without having to do anything?

    The crazy thing is that this type of thing already exists and it's the reason why algorithmic trading systems are becoming more popular with individuals. With more online algorithmic building services popping up each year they are making it easier for individuals to build their own simple automatic trading systems.

    In Part I and Part II of this series of how I got started in systems trading and how I built a simple automatic trading system for trading my own capital which now going to be available to you (a select group of my followers) I want to continue this serious talking about how we as humans are the root of most of our bad trading habits and problems.

    Understanding how and why a system is trading is important for you as it provides comfort in knowing the system complies with your line of thinking and marks logical sense in your head also.

    Through my simple automatic trading system which is complete with order execution, you can free yourself from the painful grind of staring at a computer screen and struggling with yourself to follow system rules and execute trades according to plan. Do not get me wrong, the creator of the automatic trading system must always be monitoring the system, maintaining and updating the code when required. But end users of this simple automatic trading strategy can simply set-up their trading account, link it with the automated trading system and walk away without ever having to learn or do anything else.

    How My Simple Automatic Trading System Works

    Keeping things short and to the point, my system is based around the S&P 500 index. You can opt to trade either the 3x leveraged ETFs (UPRO & SPXU) or trade the original automated trading strategy using the ES mini futures contract.

    Both trade virtually the same but can vary at times. Because ETF's have the tendency to fluctuate a little more than the underlying index. It can lead to an extra trade or missed opportunity from time to time. The real difference is in the performance. The ETF's use 3x leverage while the futures contracts are using more likes 10x leverage. You definitely get a better bang for your buck with futures, but it cuts both ways…

    Why Automatic Trading and Why Trade the S&P 500 Index?

    Automatic trading may sound risky and crazy and it can be depending on how active the system is, the creator, the programmers experience and what platform the system is run on (server, charting program etc..) but in reality it's just a set of trading rules which you create, test, approve and trade via computer. SPY, SSO, SDS, SPXU,UPRO

    If you have common sense, a solid logical strategy, and a top notch programmer you should eventually be able to create your own profitable automatic investing system. Also if you trade more than one investment then you know how easy it is miss a trade because you were watching another chart or responding to emails or living life… Well automated trading systems make it so you do not miss another trade again.

    The S&P 500 index I think carries the least amount of volatility and is diversified with the top 500 global corporations. Also it is the most liquid investing vehicle available for the stock market which keeps slippage to a minimum for optimum order fills.

    Simple Automatic Trading - It Takes Money to Make Money - Ante Up!

    We all know the saying "It Takes Money To Make Money" and it could not be more true. Unfortunately most traders fall victim to all the false advertising in this industry thinking they can make $87,523 in one trade with only $5,000 etc… marketing tactics…

    There are several things an individual must have in place to make money in the market and a properly funded trading account with enough money to properly manage positions is one of the most important things. But again most people are trading with accounts of $500 - $10,000 in size which is not enough to make any real money. Sure it's fun trading and dabble with a little money, but do not expect make much.

    The financial markets are a numbers game in almost every way, shape and form. If you truly understand how the market moves, probabilities and percentages then you know the more money you have the more likely you are to succeed with a winning strategy. Even if one is given a winning strategy but their account is underfunded that individual will struggle to make money.

    There are fixed fees with trading and just to overcome them with profits requires more capital than $10,000 in most cases.

    The general rule I think is to trade with a minimum of $35,000 which is just enough for you to trade a position size that can generate gains while allowing you to scale in and out of the market at key turning points.

    Knowing how much money is required to trade and manage my ETF and futures automatic trading system is important and I will show you some conservative numbers of what to expect each month on average in the another report later this month.

    Make $1,000 to $2400 Each Month with a Simple Automatic Trading System

    Since creation of the strategy in March 2007 when I started tracking and trading this strategy (now my automated trading system) it has posted some very exciting returns. It shows to be averaging $2400 a month and this is trading only a $35,000 account and never trading more than $15,000 per trade (3 emini contracts). The results have been truly amazing!

    Money buys you time - and time translates to the freedom
    to pursue happiness and personal growth, the freedom to
    help others, and do whatever you want.

    Simply put, I offer a simple automatic trading solution that has your best interest in mind. To try and making as much money as possible through my algorithmic trading system while also controlling downside risk. The most exciting part is that it's automatically traded within your brokerage account making it a true hands free trading experience.


    Dec 12 9:03 PM | Link | Comment!

    My last post I talked about how "The Market You Trade Is Not Random" which is what originally got me interested in trading. Let me continue with this series of how algo trading turned into my dream job and income stream.

    In part one of "How Algo Trading became My Focus, Passion and Income" you saw how my 15+ years of trading evolved from trading only, to teaching and coaching others, and then writing financial newsletters to provide thousands of followers with video analysis, trading tips, and the occasional trade idea.

    During that time it became clear that teaching and providing the masses with trading strategies that would provide a consistent stream of income year after year was much harder than I expected because of the way humans function as explained in part 1 of this report.

    Seven years ago in 2006 is when I caught the algo trading bug. It was the day I saw an interview on CNBC about a trader who converted each strategy he had into algorithms and had incorporated each one into a powerful algo trading system. It was this hands free trading idea I was sold and set out to convert my trading strategies into an algo trading system of my own.

    Having an algo system that trades and profits in up and down market conditions without having to look at the charts or pull the trigger on entering and exiting setups sounded so good I was determined to build my own.

    Within a couple of hours of Googling the terms automatic investing, algorithmic trading, and algo trading type search results I had answers to my list of basic questions. Once I knew what trading platform I should use, some basic guidelines on what to look for in a trading programmer, and the main do's and don'ts about algo trading I was ready to start calling my list of programmers. By the end of that day I had myself a programmer ready to start my project and I was fired up!

    12 Algo Trading Strategies in One Automatic investing System for Individuals

    Automatic Algo Trading System Screen Shot

    Fast forwarding to today, hundreds of version of each of my algorithms, and 4 programmers later I now have my own automatic investing algo trading system that naturally expands and contracts with the stock market using cycle analysis, volatility, trends, price patterns, volume and sentiment to invest in the S&P 500 index.

    This all-in-one system has 12 of my best trade setups and strategies for the S&P500 index. No matter the market direction (up, down, or sideways) and no matter how volatile or lack of volatility it has there is an algorithm strategy taking advantage of the stock markets price fluctuations because we specialize (live and breathe) to make money from this highly liquid index..

    Do not diversify. Specialize.

    "Diversification is a protection against ignorance.
    It makes very little sense to those who know what they are doing".
    Warren Buffet

    Know that the number #1 problem investors struggle with is themselves because of the emotions, lack of focus, and lack of commitment us as humans have. And no matter how hard you try to make you're trading rules simple to follow and execute you will always stray from what you should be doing from time to time.

    Your will typically break your rules during a losing streak or highly emotional time in the market when it's either overbought or oversold and you do not think your systems next trade will be a winner. Because you fall off the wagon at these critical points which happen to be the most important times for your system to make money in most cased you sabotage yourself and watch missed opportunities pass you by and you investing performance drop dramatically.

    In the next part, you will learn about some really cook stuff and just how to take advantage of algo trading systems and how much money you can make on a monthly and yearly basis with zero investing/trading input.

    Stay Tuned For Part III - How You Can Make Money With Algo Trading …

    Chris Vermeulen

    Tags: SPY, SSO, DIA, IWM, QQQ
    Dec 11 9:13 AM | Link | Comment!
  • Christmas Rally Starts Monday! – My ETF Trading Strategies

    Tis the Season for the most powerful seasonality trade of the year!

    With the stock market up big in 2013 and most participants are speculating on a pullback in the next week or two, I have to say I am on the other side of that bet. Being a technical trader I focus on patterns, statistics and probabilities to power my ETF trading strategies. So with 37 years of stats the seasonality chart of the S&P 500 index paints a clear picture of what is likely to happen in December.

    If you do not know how to read a seasonality chart, I will explain as its very simple. The simply shows what the index has done on average through each month over the past 37 years. December typically has the strongest up trend and probability of happening any other time of the year.

    The Big Board - NYSE (NYC)

    The NYSE also referred to as the Big Board, is an index with the largest brand name companies. Most individuals do not follow this, but to me its as close to the holy grail of trading than anything else I know. I use many different data points from this index (momentum, order flow, trend) for my ETF trading strategies.

    You must follow the trend of this index if you want to be on the right side of the market. While I follow and track the New York Stock Exchange closely and it has its own fund NYC but it's an ETF trade I do not use. These big stocks are what really move the market (S&P 500, SPY, SSO, UPRO) I think so I always trade with this index trend in mind.

    (click to enlarge)

    S&P 500 Weekly ETF Trading Strategy - Bullish

    The chart below is self-explanatory I think… But let me recap.

    The overall trend is up, so your ETF trades should be to the long side buying on the dips. The chart below goes back three years so the candles are a little condensed and small, but what you need to know are these two points:

    1. After a correction within a trend, probability says that price is more likely to continue rising than it is to reverse. Notice the market just had a running correction through the summer months.

    2. A reversal candle on the weekly chart (bullish reversal candle) generally indicates a 2-3 week rally is likely to happen.

    Conclusion: Seasonality says higher prices, weekly chart below shows bullish reversal candle… Oya!

    (click to enlarge)

    The Bigger Picture: 3 -6 Months Out…

    This is a quarterly chart and BIG picture outlook. Over the next 3-6 months we could see the stock market start to become choppy and rollover into a minor bear market for a couple years. That is the best case scenario I think… The other scenario is a major crash back down to the 700-1000 level on the SP500 which would cripple the baby boomer's from retiring and getting a job would be impossible for almost everyone - full blown recession way worse that what everyone is saying we are in now.

    Things are going to be really interesting over the next few years and things for south you better be prepared to make a killing during the next bear market or life will not be fun. The nice thing is that you can take advantage of these moves without ever having to lift a finger with my automated trading system.

    (click to enlarge)

    ETF Trading Strategies Holiday Conclusion:

    In short, I think we have a couple good weeks ahead of us. Holiday season, quality family time and a rising stock market paints a nice picture in my mind.

    Anyway, I hope this report was helpful and somewhat educational. I always appreciate feedback and things you would like me to write about how I interpret, trade or analyze things. I am here to help and new topics to write about are always welcome!


    Chris Vermeulen

    ETF Trading Strategies Newsletter

    Dec 08 11:51 AM | Link | Comment!
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