This week I’m in Prague, the capital of the Czech Republic. The place where I was born and lived for many years.
Walking the streets of the Old Town brings back a lot of memories, some of them related to my former Czech students.
For a long time, I used to co-own the biggest trading website in the Czech Republic, where every week I used to contribute with practical trading articles, tips, and advice.
But sometimes, I also wrote controversial articles to challenge the reader’s mind and to inspire traders to think out of the box.
One of the most controversial articles I have ever written started more or less like this:
“Dear losing traders, I would like to truly thank you for giving me your money.
I am, with all my honesty, tremendously grateful that you haven’t done your homework properly, didn’t assemble a thorough robustness testing procedure to match today’s highly challenging markets, didn’t learn about proper capitalization, and took naive and fool steps in blind belief that you would make a lot of money fast, and with no effort.
I highly appreciate you, because it is your money that is ending up in my pocket and is allowing me to live a truly luxury life.
Please, continue with your foolish efforts and keep losing as much money as you can. I promise you that I will spend it well.”
Now, let me tell you that we, Czech, LOVE black humor (very similar to British humor). So, while some nationalities found it hard to swallow, many Czech readers took this with humor and clearly understood the underlying message – which, of course, was the importance of taking trading extremely seriously, pushing your boundaries and doing your homework better than anybody else.
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But bringing these memories up, while here in Prague, made me think how timeless this article was. Although it was written a few years ago, it could most definitely be published today, or even in a year from now, and still keep its legitimacy.
So, dear Better Trader Academy reader, let me use this memory to remind you once again of the single most important point for any trader out there:
Make your strategies extremely robust.
And I really mean it!
Today, markets are more challenging than ever – 99% of strategies fail.
Many well-known robustness testing methods don’t work anymore, or need to be used in a new, clever way.
The chances of failure of a systematic strategy are extremely high.
You need to push the robustness testing procedures way beyond everything publicly accessible (publicly available information is usually old information when it comes to trading).
You need to be creative, inventive, and smarter than the rest – if you want to beat them in markets.
It is the MOST ROBUST trading strategies that will prevail and beat the LEAST ROBUST ones.
Algorithmic war is a war of robustness.
The weaker one will always be outperformed by the stronger one.
It’s as simple as that – as in sports or any other kind of competition.
Robustness is the #1 reason why the winner takes it all – and it’s important to always remember this.
Now, if you still don’t have or use an ABOVE AVERAGE robustness testing procedure, you can use the procedure form the legendary trader Robert Pardo, that he shared in his Masterclass.
While Bobs publicly accessible book contains some good info, it was released in 2010 and markets have changed since then. As a result, Bob has continuously improved his process over the years, and his masterclass reveals his latest, and much more robust and viable approach, with crucial details – details that literally decide if your trading strategy will soon be dead or if it’ll last for quite some time.
And if you’d like to know my own proprietary robustness procedures (definitely one of the toughest in the industry – and to be honest, I haven’t yet met a trader with more demanding robustness procedures than mine), I share them in my Breakout Strategies Masterclass.
Happy trading and many greetings from sunny Prague!
Tomas and Andrew
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Episode 013: Listener question – “What’s the best software for executing and monitoring strategies?”