I Know Your Pain
I began my journey into the stock market two decades ago while I was still in college. At that time I was completely unfamiliar with stocks. I recognized that there were red and green bars on the chart, but I was completely unaware of the companies and enterprises behind those stocks. They were only a series of codes displayed on the screen to me.
The first stock I bought in my life was a stationery company, and, as anticipated, I ended up losing nearly all of my savings. However, I kept pouring money into the market again and again, imagining I could become one of those “market wizards” in the news who doubled their wealth overnight.
Reality gave me a hard slap in the face in the end. I lost all my money again.
At that time, I believed that it was a lack of knowledge that made me lose money, so I started learning hard, progressing from a novice to an expert. I could readily recall Warren Buffett’s and William O’Neil’s trading philosophies and had even devised several of my own. I became skilled, but I found myself still up against the world’s most powerful enemy—human nature.
I understood the rules of my trading system, but when it came to trading, I just couldn’t help doing the opposite. It was even stranger that I always lost money without exception when I didn’t follow my trading system. When I acted on impulse, I always bought at the very top, and when I sold, it was virtually always at the very bottom. This became a routine over time, so that I wasn’t surprised when I noticed that the market sank right after I bought.
However, I kept trading because I liked it, but it was torturing me mentally and physically all the time. I was working hard. I even dreamed about bars and charts for days on end and woke up in the middle of the night, but I made no progress. I can clearly remember that one day I lost large sums of money through mistakes and slapped myself hard to cover the guilt with pain. I fell to the ground when I saw my account balance, and I even broke down in tears from self-blame and regret. Trading is much more difficult than other businesses, even though you’ve read hundreds of books.
But that was all in the past.
I earned more than 100% in the last year. I not only got back all I lost in the past but also made a profit, because now I’m using AI to make dozens of automated trading robots that work for me. I don’t have to deal with the greed and anxiety anymore.
With AI, I no longer hesitate or miss opportunities when trading signals appear. Instead, I’ll be making money consistently because my robots don’t have feelings. They will follow the rules without fail and work all day long.
My new pain is feeling bored every day. I don’t trade to look for excitement in the stock market anymore because I don’t need to. I get into the market to make money, not for entertainment. My trading robots will do better than me, and they don’t need to be paid, never get tired, and are more disciplined than even the best human traders.
And this is exactly why I can free up a lot of time to do other things, such as writing books, traveling, and spending time with my family.
I wrote this blog to share these secrets with you. I used to be like you, someone who lost badly and then became financially free through AI-powered trading systems.
Don’t be scared when you see words like “AI” or “quantitative trading.” They are even easier than you think. You don’t need to know anything about coding to make your own trading robots. You just need to know how to talk to AI.
Why Are You Losing Money?
Why does the market always drop right after I buy and rise right after I sell? It seems like an iron law. Is there something strange working against me? There has to be a reason for it.
I shall be rational as a trader and investor, so I tell myself that I don’t believe in metaphysics and there are no hidden forces at work in the market. The market is not to blame if someone loses money. If I lose money, I must have done something wrong.
It’s all my fault, but where did I go wrong?
Is it because I’m a fool? No, I don’t think so. I hold a master’s degree in economics and have read hundreds of books on investing. There’s no problem in my brain. Is it because I’m not experienced enough? No, because I have been a trader for decades. After thinking about it for a long time, I found the first reason:
I didn’t have a trading system.
What is a trading system? You can call it a set of rules for trading. For instance, buy 0.1 lot of EURUSD on a 1-hour chart when the MACD gives you one signal and sell when it gives you another. A trading system contains certain components such as the entry and exit signals, the size of the position, the instrument, and the timeframe. All of these rules come together to make a trading system.
A real expert has their own way of trading, which is essential for making money. Instead, people who lose money have no systems.
I used to trade based on my feelings. For example, I would buy when I saw a news headline and sell when someone made an offhand comment. I was pleased when prices went up and worried when they went down. There was no rule or logic behind almost every trade I made. I couldn’t tell you why I bought here or sold there if you asked me, because I made all of my trades based on how I felt.
I spent a lot of money on “magical” indicators from other people and even more money on their courses, but all of that was a waste of time and life. I took every course I could find, including price action and the Wyckoff method. I’ve analyzed at least a thousand charts. Look, I’m hardworking, studious, and experienced, but it doesn’t help. All I need is a right way that leads to success.
I eventually understood that these so-called indicators were like car parts. You can’t just toss a bunch of parts on the ground and expect them to combine together into a car. Indicators are like the casing of an engine. They are shiny and impressive on the outside, but they don’t make the engine more powerful. It is the system that combines with the engine, gears, and transmission that moves the car forward, but the peddlers only sell me the casings, saying, “Look how cool it is!” It doesn’t matter how cool it looks. A casing is necessary for a car, but it’s not enough. You can still make consistent profits over the long term if you build a system with clear rules, including entry conditions, strict stop-loss, take-profit methods, and the right position size, even if you only win 40% of the time.
I was shocked when I realized that.
The first step to making money is to have your own trading system, but how? Don’t worry. I will tell you in my blog.
After a lot of research, I finally have my own trading system. Did I start to make money? No. The second reason I ran into was that I couldn’t stick to my trading system. My system clearly told me to do one thing, but I just couldn’t do it because of my greed, fear, and anxiety.
Human nature again.
For instance, when the system told me to open a position, I didn’t do it right away, because I would doubt whether it was really the right place to enter. I hesitated because the chart didn’t look good at all, though the signal clearly asked me to take an action. Then, when the price went up, I would beat my chest in regret and promise to follow the rules next time. Guess what? When the next chance came, I hesitated again.
I also hesitated when my system told me to sell my position, but should I wait a little longer? Would it rebound and reach a new high? Then, the price quickly went back down, and what should have been a winning trade turned into a loss.
I tried a lot of things to fight my own nature, like meditation, but they didn’t work very well. I’ve also read in many books that a good trader had to be as cold as a machine. The more mindless and ruthless you are when you follow your system, the better your results will be. On the other hand, the more impulsive and clever you try to be, the worse you do.
But wait, why should I try to make myself into a machine? Why not let machines, which don’t have feelings, run my trading system for me?
We can’t get rid of all of our feelings because we are emotional beings. After becoming aware of this, I strongly realized that human traders will definitely be defeated by robots, and automated trading must be the future because people are born with emotions, while machines are not. I shall not train myself to be a mindless and ruthless trader; instead, I shall learn algorithmic trading.
The problem was that I didn’t know how to code. My major was economics, but not programming. I took some programming courses several years ago, but I did not learn anything from them. The last thing we had to do in programming class was to make a “Snake” game, but I couldn’t write even one line, so I didn’t get the completion certificate.
So how did someone with no coding skills build trading robots that operated on their own and generated more than 100% returns last year? My blog will reveal all those secrets to you.
What Will You Gain from Algo Chad Lin’s Blog?
I am now a full-time algorithmic trader. There are more than twenty employees in my fund company, and all of them are robots that never get tired. They don’t ask for pay, and their execution is better than that of the best human traders in the world.
More importantly, I don’t need to get involved with them most of the time, and I shouldn’t. The more I get involved, the worse they do. I only check my account once a week on weekends when most markets are closed except for cryptocurrencies, to keep myself from getting emotionally involved in the trading system. Even if I wanted to, I couldn’t interfere when the markets are closed, and I can calmly look at how my robots are doing their jobs.
Apart from that short account-checking time, I spend most of my time doing other things like writing, traveling, reading, and making friends. Otherwise, I would be so bored that I couldn’t stand it.
I no longer sit in front of the screen every day, blame myself for repeated losses, or suffer the nightmare of buying only to see prices fall and selling only to see prices rise. The robots will follow the rules and enter at the best points. They do better when I don’t pay them much attention because they really follow the system with no emotions. All I need to do is monitor their performance periodically. If I find that a robot isn’t working well, I will “fire” it and develop a new one to replace it. This costs me almost nothing extra.
Most importantly, I am once again in charge of my own life. I used to think I should have learned about software engineering so I could start my own tech business like Steve Jobs or Elon Musk, but now I’m very glad I studied economics, which gave me a solid foundation in trading and investing and helped me make progress faster than most people. I don’t need to program by myself because my AI assistant can do all the programming work for me.
I was able to write this blog as a gift for you because I had more time. You might still doubt yourself and be in pain, but trust me: if you follow what this blog says, you can make your own quantitative trading system, even if you don’t know anything about trading or programming. This blog will guide you step by step. All you have to do is follow along.
I have also made a portfolio. You can just follow my portfolio if you don’t want to spend time making your own.
The Next Article: The Myth of High Win Rate Trading Systems