Confident, Consistent and Quantified: More on Trading and Investing with The Machine

Another day, another reason why more and more investors are looking to manage their own money using resources like The MachineĀ®.

This weekend in the Wall Street Journal, Jason Zweig noted that professional investment advisors have a bad habit of “buying higher and selling lower.” Read “The Intelligent Investors: Why Your Advisor is Scared to Set Your Straight”.

Zweig observed: “Those who use TD Ameritrade had an average of 26% of clients’ assets in bonds and cash on Oct. 9, 2007, the day the Dow Jones Average hit its all-time high of 141164.53. By March 9, 2009, the day the Dow scraped rock bottom at 6440.08, the advisors had jacked up bonds and cash to 51%.

This isn’t meant to take a poke at investment advisors. Managing money is hard work. But a large part of the problem lies not in how hard the work is, but in how difficult it can be to overcome psychological hurdles – for both investment advisors and their clients – that tend to encourage the wrong way of thinking at the wrong time.

As Zweig notes, the proper frame of mind for the short term trader and the long term investor alike has been summed up by no less than Warren Buffett, who urged that “we should be fearful when others are greedy and greedy when others are fearful.”

The problem is that even when money managers and investment advisors understand this, their clients often do not. And in the tug-of-war between what the client wants and what the investment advisor might prefer, too often emotion wins out.

SPY Chart

So what can we do to help us help ourselves when it comes to making the right trading and investing decisions at the right time – especially when emotion, noise from the media and market volatility itself begin to cloud rational, objective decision-making?

One of the benefits of quantified, systematic trading is that the right decisions at the right time are made every day by a trading strategy that has been quantified and backtested over time. Systematic traders don’t need to worry about how they “feel” about a given trade. Instead, they are able to rely on historical edges and objective statistics to make the kind of decisions that may be difficult to make, but have proven to be the winning decisions time after time in the past.

This has been the experience of a growing number of traders and investors who are using The Machine to manage their own money in an objective, data-driven way. Using The Machine to combine objective, high probability trading strategies into quantified, high performance portfolios with low drawdowns, high reward/risk ratios and high per trade win rates, more and more traders and investors are freeing themselves from the world of bias and emotion and instead are focusing on what really matters: finding the biggest edges in the best markets every trading day.

EquityCrv Chart

Whether you are a short term trader or a long term investor, having an objective, backtested trading system that can give you specific instructions on both how and when to be “greedy when others are fearful” can go a long way toward making you a more confident, more consistent, and ultimately more successful trader. It is why more and more professional traders and investors have turned to the quantified, systematic trading of The Machine as a way to both grow and manage their own money and that of their clients.

To learn more about how using quantified trading strategies can help make you a more confident, consistent and successful trader and investor, be sure to click the link below to sign up for the free, live presentation on The Machine by Larry Connors, founder and CEO of TradingMarkets.

Building a Balanced High Performing Portfolio with The Machine

David Penn is Editor in Chief at