CMR Interview: Simon Ree On Trading Success, Trend Following And Trading Options

Summary

在这段访谈中，Jason Shapiro与交易专家Simon Re进行了深入对话，探讨了交易成功、趋势跟踪和交易期权的策略。Simon分享了他对于市场的看法，强调了技术分析在理解市场参与者情绪中的作用，并讨论了风险管理的重要性。他提出了“期望值”概念，并强调了避免大额损失对于长期交易成功的重要性。此外，Simon还提到了他的交易哲学，包括如何使用移动平均线和ADX指标来识别趋势，以及如何通过适当的头寸管理来实现稳定的回报。

Takeaways

• 📈 交易成功依赖于对市场的正确理解和分析，而非简单的技术分析或基本面分析。
• 📉 市场的价格由供需关系决定，基本面因素通过影响供需进而影响价格。
• 🤔 交易者常犯的错误是过度复杂化市场分析过程，而忽视了市场的基本规律。
• 📊 技术分析能够帮助交易者理解其他市场参与者的情绪，如恐慌或过度乐观，从而预测市场可能的反应。
• 🎯 风险管理是交易中最重要的部分，包括了解何时进入和退出交易，以及如何设置止损。
• 🧘‍♂️ 交易者应保持纪律和过程，不被市场的波动所左右，保持冷静和理性。
• 💡 交易者应专注于建立一个有优势的风险收益比，即使在亏损交易中也能保持整体盈利。
• 🔄 市场趋势的识别可以通过移动平均线来辅助，如彩虹逻辑（Rainbow logic）的使用。
• 🚫 避免在交易中全仓投入，应分散风险，合理分配每次交易的资金比例。
• 🌐 交易者应有长期的视角，关注多年的风险调整回报，而不仅仅是短期的盈亏。
• 📚 学习和实践是提高交易技能的关键，包括对市场心理、交易策略和风险管理的深入理解。

Q & A

Jason Shapiro 是谁，他在采访中扮演什么角色？

Jason Shapiro 是 crowded market report.com 的主持人，他在采访中扮演主持人的角色，与交易专家 Simon Re 进行对话。

Simon Re 是谁，他为什么被邀请参加采访？

Simon Re 是一位交易书籍的作者，他被邀请参加采访是因为 Jason Shapiro 认为他有关市场的观点和理念很有价值，且他们可能有相似的市场观点。

在采访中，Simon Re 提出了哪些关于市场分析的观点？

Simon Re 认为人们过度复杂化了市场分析的过程，他强调任何资产的价格都是由供求关系决定的，而技术分析可以帮助交易者理解其他市场参与者的情绪和可能的反应。

Simon Re 是如何定义趋势跟踪的？

Simon Re 将趋势跟踪定义为一种简单直观的交易方法，跟随最小阻力路径，通过识别趋势并在合适的时机加入趋势来实现盈利。

Simon Re 如何看待技术分析和基本面分析？

Simon Re 认为技术分析可以帮助交易者理解市场参与者的情绪，而基本面分析只有在影响供求关系时才会影响价格。他倾向于使用技术分析来捕捉市场情绪。

Simon Re 在交易中如何管理风险？

Simon Re 通过设置止损点和使用期权策略来管理风险，例如，如果期权的溢价下降到他支付价格的50%，他会无条件地平仓。

Simon Re 提到了哪些交易策略？

Simon Re 提到了趋势跟踪和反趋势交易策略，以及使用彩虹逻辑（多种颜色编码的移动平均线）来识别趋势，并结合ADX指标来确认趋势的强度。

Simon Re 如何确定进入和退出交易的时机？

Simon Re 根据趋势的强度和价格相对于移动平均线的偏离程度来确定进入和退出交易的时机，他会在价格回调到特定的移动平均线时进入趋势，并在价格远离移动平均线时退出。

Simon Re 对于交易者如何看待损失？

Simon Re 认为损失是交易的一部分，重要的是不要被损失所打击，而是要从中恢复并继续信任交易过程。

Simon Re 提供了哪些资源或服务来帮助其他交易者学习？

Simon Re 提供了名为 options Academy Elevate 的在线课程，以及名为 options Academy accelerate 的月度订阅辅导和指导服务。

Simon Re 的交易理念与哪些哲学或信仰有关？

Simon Re 的交易理念与佛教和武术有关，特别是他提到了李小龙的《截拳道之道》对他的影响，以及他在佛教寺院的经历。

Outlines

00:00

📈 交易成功与市场趋势分析

Jason Shapiro 在 CMR 访谈中与 Simon Re 讨论了交易成功、趋势跟踪和交易期权的话题。Simon 曾撰写《Tower Trading》一书，他的观点与 Jason 在市场运作理念上不谋而合，尽管他们的方法可能有所不同。Simon 认为大多数人过于复杂化市场分析过程，而价格最终由供求关系决定，这是市场分析中经常被忽视的简单真理。

05:01

📉 市场分析的简化与风险管理

Simon Re 强调简化市场分析的重要性，指出技术分析能够帮助交易者理解市场参与者的情绪。他介绍了风险管理的概念，特别是期望值和止损策略，强调即使在只有20%胜率的交易系统中，通过恰当的风险管理也能实现盈利。Simon 还分享了自己对风险管理的看法，包括如何通过管理损失来优化交易结果。

10:03

🔄 市场趋势与交易策略

Simon Re 讨论了作为趋势跟踪者的核心理念，他使用彩虹逻辑和一系列移动平均线来识别趋势，并用平均方向指数(ADX)作为趋势强度的过滤器。他倾向于在趋势中的回调时进入市场，并在价格远离均值时退出以获得利润。Simon 还强调了在交易中保持纪律和避免情绪化决策的重要性。

15:04

🌐 市场状态的判断与应对策略

Simon Re 描述了他如何使用200日移动平均线作为判断市场处于牛市还是熊市的简单工具。他认为，市场在200日移动平均线之上时表现出不同的个性，而跌破该线则意味着市场可能变得更加不稳定。他还分享了自己在不同市场状态下的交易策略，包括在熊市中如何进行交易。

20:07

🤔 交易决策的制定与执行

Simon Re 强调了在交易中不交易的重要性，他认为交易者应该避免在不完全符合自己交易标准的情况下强行交易。他还讨论了如何通过设置具体的止损和退出标准来管理交易，以及如何根据市场情况灵活调整这些标准。

25:08

🏆 交易成功的心理与哲学

Simon Re 分享了他如何将佛教哲学和武术中的'像水一样'的概念应用到交易中，强调了适应性、灵活性和心理韧性在交易成功中的重要性。他还讨论了如何通过保持纪律和信任交易过程来克服交易中的困难和挑战。

30:09

📚 交易教育与资源分享

Simon Re 介绍了他的交易教育服务，包括在线课程、书籍和社交媒体上的互动。他提供了关于如何开始交易、风险管理、交易心理学等方面的指导，并鼓励交易者通过学习和实践来提高自己的交易技能。

35:09

🎬 电影与文化影响

在访谈的最后，Simon Re 和 Jason Shapiro 讨论了电影《好莱坞往事》中的一个场景，以及它如何展示了 Bruce Lee 的影响力。Simon 还分享了他如何将武术和东方哲学融入到自己的交易和生活中。

40:11

🤝 结束语与联系信息

Jason Shapiro 感谢 Simon Re 的分享，并鼓励听众访问 Simon 的网站和社交媒体平台以获取更多交易知识和资源。Simon 也表达了对 Jason 工作的赞赏，并提供了自己的联系信息，以便有兴趣的交易者可以进一步学习和交流。

Keywords

💡趋势跟随

趋势跟随是一种交易策略，它基于跟随市场价格趋势的理念。在视频中，Simon re提到他是一个趋势跟随者，因为他认为这很容易也很直观。他通过识别强趋势和寻找高概率时机加入趋势来进行交易。例如，他使用彩虹逻辑来识别趋势，并通过ADX指标来确认趋势的强度。

💡风险管理

风险管理是交易中一个核心概念，指的是在交易过程中对潜在损失进行控制和预防的策略。视频中，Simon re和Jason Shapiro都强调了风险管理的重要性，如设定止损点和合理的仓位大小，以避免大额损失并保护交易账户。

💡技术分析

技术分析是研究历史市场数据，尤其是价格和成交量，以预测未来市场趋势的方法。视频中提到，Simon re采用技术分析方法来理解市场，并寻找交易机会，如通过识别假突破和假跌破来感知其他市场参与者的情绪。

💡供需

供需是经济学中的基本概念，指的是供给量和需求量之间的平衡，决定了商品或资产的价格。在视频中，Simon re指出，无论基本面如何，最终影响价格的是供需关系，这是一个经常被交易者忽视的简单真理。

💡期权交易

期权交易是一种衍生品交易形式，允许投资者对股票、指数、商品等资产的价格变动进行投机或对冲风险。视频中，Simon re提到他喜欢交易期权，因为期权提供了灵活的交易策略，如通过卖出信用价差来进行逆势交易。

💡纪律

纪律在交易中指的是遵循既定交易计划和策略的能力，不受情绪影响。视频中，两位交易者都强调了纪律的重要性，认为这是长期交易成功的关键因素之一。

💡期望值

期望值是风险管理中的一个概念，指的是一个交易系统长期平均下来的盈利能力。Simon re在视频中提到，即使一个交易系统的胜率只有20%，只要它有正的期望值，交易者仍然可以赚钱。

💡交易心态

交易心态指的是交易者在面对市场波动时的心理状态和情绪控制能力。视频中，Simon re和Jason Shapiro讨论了交易心态的重要性，以及如何通过佛教哲学和武术训练来提高交易时的心理韧性。

💡假突破和假跌破

假突破和假跌破是指市场价格短暂突破或跌破某个关键水平后又迅速反转的现象。视频中，Simon re提到他喜欢利用这种市场行为来寻找交易机会，因为这些情况往往会导致其他交易者的止损单被触发。

💡彩虹逻辑

彩虹逻辑是Simon re用来识别市场趋势的一种技术分析方法。它涉及使用不同颜色的移动平均线来形成类似彩虹的图表模式，从而快速识别趋势的强度和方向。

💡平均真实波动范围(ATR)

ATR是衡量市场波动性的指标，用于确定价格的波动程度。在视频中，Simon re提到他使用ATR来确定何时退出交易，当价格远离移动平均线达到2到2.5倍ATR时，他可能会开始考虑获利了结。

Highlights

Jason Shapiro采访Simon Rea，讨论交易成功、趋势跟踪和交易期权。

Simon Rea曾出版《交易塔》一书，分享市场运作的深刻见解。

讨论市场分析的过度复杂化，强调价格由供求关系决定。

技术分析可以揭示市场参与者的情绪和可能的反应。

基本面分析只有在影响供求关系时才会影响价格。

市场已经从基于分析的市场转变为更多机械和短期交易的市场。

风险管理的重要性，以及如何通过期望值和止损来实现盈利。

即使只有20%的胜率，也可以通过风险管理实现盈利。

Simon Rea分享个人交易经验，强调小亏损的重要性。

趋势跟踪作为一种简单直观的交易方法，跟随最小阻力路径。

反趋势交易在震荡市场中的有效性。

使用彩虹逻辑和ADX指标来识别和加入强趋势。

交易期权的好处，可以在不预测市场方向的情况下进行交易。

如何通过识别失败的突破来设置交易，利用市场参与者的困境。

200日移动平均线作为判断牛市或熊市的简单工具。

在不同市场环境下调整交易策略的重要性。

交易中的耐心和纪律，避免在不明确的市场情况下强行交易。

Simon Rea的交易哲学，包括东方哲学和武术对他交易风格的影响。

如何将佛教和武术中的概念应用到交易和生活中。

Simon Rea提供的教育资源，包括在线课程和交易指导服务。

交易作为一项长期事业，需要耐心和一致性。

Transcripts

[Music]

welcome to CMR interviews by Jason

Shapiro in today's episode Jason Shapiro

interviews Simon re on trading success

Trend following and trading options to

learn more about Jason and Simon check

the episode notes in the description all

right hello today is

um December 6 2023 I'm Jason Shapiro

with crowded market report.com

today I have joining me uh fortunately s

Rey um who is uh somebody who wrote a

book named the tower trading quite a

while ago I read that a few years ago

actually um and he just uh

always comes across my feeds um and I

always like the things he has to say

which is why I asked him to speak with

us because I think he has uh some very

relevant ideas about markets and about

how markets work and I think he um

is in agreement with me that uh 99% of

this is here um more than on the screens

um so uh a lot of times I like to bring

in people who have different views than

me um in this case I think we're going

to find somebody that has some similar

views than I do about markets although

his approach um to markets is somewhat

different than mine so um I think we can

see that again

and while we are both focused on the

bigger picture of what's important um we

approach it in a different way so I

think that could be interesting so with

that being said Simon welcome and thanks

for joining us thanks very much Jason

and uh yeah I see you on my feed every

day as well and I love your approach to

markets and uh the way you share your

Insight in a very very direct no

approach I think it's

refreshing thanks um no room for

in this game right right um

although there's plenty of it out there

there is plenty of it out there there a

fact um so tell us what are uh what are

we doing wrong how are we approaching

markets wrong from your point of view

and um how can we get better at it why

don't we start with that I think

people over complicate the whole process

of anal ing markets whether it's

technical analysis whether it's

fundamental analysis whether it's you

know sentiment analysis whether it's

quantitative whatever your approach is

or combination of approaches whether

it's macro um I think it's really

important for people to bear in mind

that the price of any asset in any

Market whether it's a stock a barrel of

oil or a bunch of bananas at the fruit

and veg Market is determined by supply

and demand all right so that that that

is what determines price people will

argue that price is driven by

fundamentals fundamentals only affect

price in as much as they affect supply

and demand all right so I think um

that's something that people can lose

sight of um what I like about technical

analysis why why I take a technical

approach to markets is because when when

you when you get into it and you

practice it you can really imagine the

the pain or the Euphoria or the fomo

that other Market participants are

experiencing when

certain setups develop you know one one

of the setups I I love to look for uh

you know false breakouts and false

breakdowns because you you can see where

where Longs are trapped or shorts are

trapped and you know there's either

going to be stop losses getting hit or

or there's going to be short covering

when when they fail and and that's one

you know one very easy example of where

technical analysis can really highlight

the pain that other Traders are in and

and what they they're most like response

is going to be and you know if there's

going to be a sudden flood of aggressive

new marginal buyers or sellers all all

of things being equal it's going to

impact price now it doesn't work out

every time which is why we're always

dealing with probabilities uh but it can

work out most of the

time yeah I mean I would say as well

um fundamentals affect markets only as

they're going to affect Supply demand um

and to me my big thing is um only as

those fundamentals are not discounted in

is the thing for me right like the

fundamentals one thing but if if it's

already discounted in then there's no

value in trying to make money off of

that fundamental to me right everybody

knows about it yeah yeah I think that

the market clearly is a discounting

mechanism and I think that's what people

forget you know um I I think it depends

on the

market like PE people say that about the

stock market and I reckon I reckon that

was absolutely true 30 years ago you

know during the the pinch era when when

markets were dominated by stock Pickers

and people who were performing DCF

analyses and really trying to forecast

future cash flows and value companies I

I reckon these days the market is so

dominated by mechanical passive Flows at

one extreme and zero DTE Traders at the

other um the markets the stock market

has lost a lot of that uh discounting

ability I think it's become way more

reactive than it ever used to

be interesting take um and I know you

you focus kind of more heavily on

commodity markets I I think that they

probably are better discounting

mechanisms because uh you know supply

and demand is is such a such an

important driver in commodi ities

right yes I mean I do trade the

financial markets just as much the stock

indices or the fixed income markets or

or stuff like that I I approach them all

the same

way but I I hear what you're saying uh

certainly corn doesn't have the one day

what do it call it odte thing or

whatever the zero data expiration

options yeah yeah probably also doesn't

have anywhere near as much uh day

Traders going on as as you do in the S&P

that's for sure um so the point taken

the stock market is is somewhat

different uh in that way then for for I

I think I hope I like to believe that

for my purposes it doesn't matter

because I'm not a day trader um you know

I'm I'm sort of picking two three four

month moves um so what happens Inay

well I watch and uh fret um it doesn't

affect my p&l so much over time so but I

do hear what you're saying so

[Music]

um you talk a lot as pretty much I think

anybody who is uh approaching this

Market from a realistic point of view um

a lot about things like process things

like

discipline um things like Risk

Management right um yeah which I think

you would agree are really the most

important parts of of this whole thing

over time absolutely so so a lot of

people including me um talk about that a

lot okay risk management risk management

risk management

okay but on a more practical

level what does that mean like I

understand you got to stop out of losing

trades okay great but I could stop out

of every single trade I put on at a

losing as a losing trade and that's not

going to help me very much either right

might say hey I have great risk

management I stop out of all these

trades but if I stop out of every single

trade at a loss then that's not going to

help me either so can you maybe try to

expand on on on your thoughts on that

risk management what does it mean I

think a great way to introduce somebody

to the power of risk management is to

introduce the concept of

expectancy and give them a give them a

very simple spreadsheet this this is

something I've done with with members in

my program and just show them how you

can make money on a system that wins 20%

of the time all right most people they

they get into this business thinking my

my my number one job as a Trader is to

be right all right I got I got to win

every trade no no no no no you can you

can make a lot of money if you lose 80%

of the time now that doesn't suit me

personally it's I I don't think that's a

fun way to make money I think it's would

be quite

stressful but you can make money on a

coin flip entry system where you win 50%

and you lose 50% provided you have a

system in place that enables you to

stick with your winners and cut your

losers and I would just say if you if

you assume that you've got a random

entry you try and take profit at 50% but

if you're doing that make sure you're

cutting losses at 25% and if if you do

that even with a random 50/50 win loss

kind of system you will make money and

by by teaching somebody the con cep of

expectancy they can see just how

powerful risk management is you know

when I look at my my trading performance

this year 2023 my most profitable month

was August and August I had a a 40% win

ratio all right and that was my lowest

win

ratio for the year month by month but

but I was up 13.4% that month uh I've

had other months where I've had a 75%

win ratio and my nlv is only increased

by you know 5 a

half% so having that um advantageous

risk or reward to risk ratio really

really can swing things in your

favor yeah for sure I uh I I clearly

preach that

that's the only thing that matters for

me um you know is you have to be

flipping coins and be getting paid you

know three for heads and paying out one

for

taals good analogy and then you want to

obviously if you can get that then you

want to flip as many coins as possible

get paid three lose one get paid three

lose one that's what I always say that

that's what trading is you know and I

think you're right that that's what

people least understand about this game

they want it to be about getting the

market right or wrong yeah um I try to

tell people that you're not going to do

that over time

okay because you're you're predicting

the future so the chances of predicting

the

future more often than not are are are

pretty much zero so you got to get that

out of your mind go ahead so yeah I I I

agree I I say I always say to people

your number one job as a Trader it's not

to be right it's to stop a small loss

from becoming a big loss because it's

big losses that will um demoralize you

psychologically uh but they'll also do

enormous Financial damage to your

account

for sure trying to trade your way out of

a hole uh almost impossible no it's hell

it's hell yeah um again I've said it

before if there's one

thing that I can give myself credit for

for doing well um it's taking

losses that's it my my ability to

predict the future is clearly no better

than any other person on Earth um I

think maybe what I have learned after 35

years um and therefore maybe do better

than most is uh is take losses that's it

that's that's that's my whole thing

right that's what that's why I'm still

alive here right yep um so yeah I I

agree with that 100% can we get into

um specific examples like do you

have a process that you follow one

process or more than one process or

around risk management no just around

trading and then maybe if we talk about

that then maybe you could give us the

exact examples of how you handle risk

management within that process yeah sure

so I'm a I'm I'm a trend follower at

heart um because Trend following is it's

kind of it's it's easy it's it's

intuitive uh you're following the path

of least resistance it's I find it

easier to um allow your winners to run

if you're following the trend um

because if you pick the right spot in

the trend to join the trend uh things

can move in your favor quite quickly and

and you tend to know fairly quickly if

you're wrong um but in in a choppy

market like we've had for the last three

or four months uh counter Trend trading

I find is is a really really powerful

tool to have in the Arsenal as well and

this this is where you are trying to

pick high probability tops and bottoms

you know you're fading the medium-term

trend uh with the idea that something is

you know it's going to form a bottom or

form a top and uh one thing I I love

about trading options is I can I I don't

have to trade directionally you you can

sell a sell a credit spread and then

normally I'll do a counter Trend trade

by selling a credit spread so if I think

a a counter is is bottomed and I'm

taking a counter Trend long trade I'll

usually sell a put credit spread because

I don't actually need the stock to rise

I just need it to stop falling I just

need it to not fall much further so that

that's that's very handy um but let's

let me just stop you there if I could

yeah sure if I think that a stock is

about to turn there's what you just said

right yeah so it's been going down and

you think that it's going to stop going

down yes what is making you think that

is this just a discretionary thing or

are you looking at systematic things or

is it a combination or what's making you

think that a market is going to stop a

stock or whatever you're trading is

going to stop good question what what

I'm really looking for is is failed

breakdowns I'm looking for a stock that

makes a new low and then reverses back

up and what I'm looking for is is trap

shorts

basically so it's similar in in certain

thought processes to what what I'm

trying to do which is uh it's a

positioning thing really is what that is

you've got all these trap shorts and um

and now they're screwed we had one of

the most unbelievable trap long trades

I've seen in a while and gold I'm sure

you saw the other day was uh yeah just

an amazing move made that new high

reversed and

like moved $100 in a day I mean the

reversal was was even more stunning it

was pretty breathtaking yeah um so I say

so you're looking for it makes a new low

I don't know what time period you're

talking about what do you generally

trade in what kind of time period so I I

anchor nearly all of my trades to the

Daily chart um sometimes I look at a 195

minute chart I I'll look at lower time

frames and higher time frames for Trend

confirmation but probably 90% of my

trades are anchored to the daily

chart okay so you're not day trading

these things no no are sort of Swing

more longer term trades uh swing it's my

average holding period would be anything

from 2 to 3 Days To 2 to 3 weeks it's a

new word that I've learned recently as

I've gotten into this whole thing and S

of the come across

uh other traders who I never really I

never really was involved with talking

to other people very much um it's my new

word swing um swing trading people say

it to me all the time now are you a

swing Trader I'm like I don't really

know what that is but uh seems like

that's more of a two three day thing so

that's not what I am as it turns out but

so you're doing sort of That Swing thing

thing makes a new low on a daily chart

then comes off that low and now you've

got all these trap shorts so you're

going to front run them getting stopped

out of those shorts essentially exactly

yeah yeah which is great to me because

it means that uh without knowing much

about your history um it would imply to

me that you have been on the wrong side

of that and you've seen what it's like

to lose you know I mean that's really

how I developed my whole process right

is if I'm on the wrong side of these

trades all the time well then maybe

flipping it around I could be on the

right side of them right so a lot of

people get caught on these false

breakouts because a lot of people like

to trade breakouts and a lot of people

like the trade Trends and um yeah

they've got they get caught on these

false breakouts and suddenly they get

they're going to get stopped out so why

not recognize when that's going to

happen to them take the other side and

make money off of them getting stopped

out rather than be on the on the bad

side of it which we've all been on

exactly so that's that's my my Brad and

but kind of C of trend

setup I like it otherwise you're riding

a trend otherwise I'm riding a trend so

Trends you know Trend following works

great in a market like you know 2020

from April onwards or 20121 was just a

trend followers Paradise in the equity

Market um bare markets are always

tougher because the bare Market rallies

are so severe right if if you're just

trying to short every every top you're

going to get cleaned out so when you're

in a bare market like 2022 you've you've

really got to be able to trade both

sides of the market um people people

think trading a bare Market is just the

mirror image of what you do in a bull

market and and it isn't they've got

quite a different

personality um certainly in the equity

markets to say the least yeah yeah and

then you know we had sort of you know

that period uh March to July was a was a

great great Trend just buy every dip and

then July to September was kind of

choppy that's where cter Trend trading

really proved its midal to me again

so yes trading in a bull market is

different than especially in the equity

Market is much much different than

trading in a bare Market I think we can

all agree with

that um the question is of course how do

we determine when we're in a bull market

or when we're in a bare

Market well uh I've got a horribly

simplistic way of doing it and and

really I just look at the 200 day moving

average uh I I call the 200 day moving

average the the jackan HD switch uh

because really you look at any any

long-term chart of an equity index uh

you can see that personality shift as

soon as you start getting closes below

the 200 day and as soon as that 200 day

starts pointing downwards um things just

become a little bit unhinged uh you get

big moves to the downside but also huge

rallies huge moves to the upside it just

becomes a lot more volatile you know and

you the markets the markets that are

trading under their 200 day moving

average they they tend to have a faster

scarier feel to them you know news

headlines are generally pretty awful uh

yeah you generally know when when you're

in a bare Market you know if especially

if you're trading one it does feel quite

different okay so that's a nice

simplistic way to look at it um which I

always believe as you said in the

beginning simple is

is better people like to complicate this

stuff so much sometimes um and it's hard

enough as it is right uh you're dealing

with what is essentially a random data

series and trying to predict a future

that you can't predict and so you can

put a thousand things on top of that to

make it complicated it's not going to do

anything I think so 200 day moving

average if it's above it it's a bull

market if it's below it it's a bare

market and therefore approach it as a

bull market when it's above and approach

it as a bare Market when it's below

pretty much in a in a nutshell

yeah so what do we do about times like

um recently where I would I don't know

because I don't look at moving averages

a lot but I would assume that coming

into the first week of November the S&P

was below the 200 day moving

average look I I think November was one

of the tougher months to trade because

the market just went up in a straight

line there was no real opportunity to

there was no high probability moment in

time to kind of join that train you you

just kind of had to you know close your

eyes and pinch your nose and buy it if

if that was your thing um November's

actually been my my worst month this

year I I I found it a tough a tough

month to trade sucks

sorry that's all right I'm having a

great year you know I'm I'm allow to

have a bad month no I hear just I just

always sympathize with

uh you know because I have them all the

time right and then bad months always

suck yeah um but but it's the total

right attitude you know it happens I'm

having a good year and and it happens

you know um that makes sense but yeah so

November was uh was an out of nowhere

situation for for sure

um so all these things become strictly

price I mean tell me if I'm wrong but

strictly price uh things to you like

trend is a price thing right yeah price

is is really what I focus on I mean I I

look at I look at things like uh the put

core ratio you know I I look at

statistics like a zcore you know I I

will look at kind of sentiment

indicators and overlays and that type of

thing um but but price is is key for me

definitely right because that's what

again that's what trend is so it's a

price thing so you're either doing these

counter Trend trades as we spoke about

or you're doing a trend trade and are

you willing to tell us a little bit more

about how you approach the trend side of

things is it based on moving average

crossovers or is it based on making a

relative new high or or yeah look it's

it's it's more um it's more about

identifying a strong Trend and then

identifying a high probability moment in

time to join that Trend so

to find the strong Trend I look for what

I call Rainbow logic so I use a series

of moving

averages I use an 8 day EMA a 21 a 34

day EMA and then I use a 50-day SMA a

100 and a 200 SMA and I color code them

so they're red orange yellow green blue

violet so they look like a rainbow on my

chart so when I see a rainbow I know

I've got a strong Trend in

place and when I see an upside down rain

I know I got a strong downtrend so in in

a split second I know whether I want to

be trading from the long side or the

short side so that that that Maps out

the trend and then it's a case of well

how you know how how How likely is this

trend to continue and then I I use adx

it's just as a as a very simple filter

the 13 period adx is 20 or above that's

that's a trend that's likely to continue

sorry what's adx average directional

index I think it's stands for yeah okay

it's just a measure of of trend strength

and then really all I'm looking for is

is a pullback to say the 21 EMA or the

34 EMA or or maybe even the 50 SMA but I

I I like stocks to hold the 50 50-day

simple moving average uh once they get

below that uh the trend is is weakened

enough that I'm I'm happy to just stand

aside and leave it as someone else um I

always say you know if a if you're

trying to force a trade if if you're if

you're pouring over a chart for 10

minutes figuring out whether you should

take the trade or not don't take it I

think you've probably already spent you

know way too long on it um that the

trade should be fairly

obvious and and if they're not then I

just put them in the two hard basket and

I I don't trade every single day you

know there there are some days where I

might peruse a dozen stocks and all of

them are you know there there's they're

just not quite right uh and I I really

prefer to take a setup that ticks every

single box than try and force something

where you know only seven out of the 10

boxes are

ticked oh I think that's such an

important

concept the concept of not trading um

which I know are things that I've said

I've seen you speak about as well which

really like I said drew me to you

because a lot of the things you speak

about are things that many people don't

speak about even though they they should

be super obvious um and not taking a

trade um is one of the most important

things I I believe I I

I I I I try to walk away from trades all

the time if they're not exactly what I

want and clearly sometimes I'll miss

something um but over time um I believe

I will it it will be beneficial to me um

I think that's just such an important

concept that that people have and look I

have a hard time with it too I'm I'm

totally

slave

95% to my process right um and I have so

many ways to ensure that I follow that

process going straight down to what my

business is you know that's the the the

the best thing that I have in terms of

my process is I have sold to my

clients the idea that what this process

does is provide a negatively correlated

return stream to what you guys are doing

right to to Trend following to most of

the things that are going to be in their

portfolio and that is why they give me

money to manage right so because of that

that's what I have to provide them right

so that keeps me slave to my process

because I know my process will provide

them that right but even within

that just like every human

being it's a struggle you know it's a

struggle

um but again to your point so important

I

had

from September through

now um I've had two

trades you know I got my monthly uh

statement the other day I one I had one

trade on my monthly statement wow okay

it's been

extremely um it's rare for that to

happen and in fact I don't think that's

ever happened you know certainly I know

for a

fact um since I've come back I I I

retired for a year and a half or so but

since I've come back it's been seven

years that hasn't happened in seven

years I know that for a fact all right

okay so that's pretty rare it's very

rare yeah and so and

listen it worked you know what I mean I

had

a for most of it it was just one trade

right and and it worked and it put up a

nice return for me you know and that's

all great but it's so hard to sit here

every

day and not put a trade on the the

discipline of that is is is so very very

hard you know um so anyway back to your

point which was that if it's not per you

you your Rainbow says the trend is up

you get a pullback to a moving

average that you like so you go with the

trend you're Buy a pullback in the trend

that's your that's sort of your

discipline for entry is what I'm

hearing and if that Trend then fails

goes through the 50-day moving average

or something like that right and I

assume that's where you're just cutting

out of it and saying okay yeah so I I I

trade options almost exclusively and so

let's say I've bought a call option or a

call debit spread I'm I'm looking for a

directional bullish move uh I have what

I call my my OMG stop-loss level is if I

lose 50% in premium so if I pay 10 bucks

in premium and it drops to five I cut

the position no matter what but I'm

trying to get out of positions well

before that happens all right and um I

can tell you a story about that in a

minute but what I'm looking for is is

any doubt that I've got over that

position and and I'm out of the position

right I always say I need three or four

reasons to get into a trade I only need

one reason to get out and it could be a

swing low being taken out it could be a

close below the 50-day moving average it

could be the 8 EMA Crossing out the 21

EMA these are all early warning signals

that uh the trend or you know what I

thought was going to happen is

considerably less likely uh and if I

stay in that position I'm I'm hoping

rather than you know working a

probabilistic edge right very different

things yeah so I would much

rather oh yeah for a word for

sure uh yeah I'd much rather I'd much

rather be out of a position wishing I

was in than in a position wishing I was

out and the thing is you know

transaction costs these days are zero or

or negligible if I if I still like the

position after I get out I can always

get back in

again it's a

fact so basically you're getting out

you're stopping out you have a defined

stop out at 50% of whatever the premium

thing um or whatever a price thing

that's not working you're out otherwise

you're riding it for the most part right

and I used to take the approach of kind

of right there's my profit Target

there's my stop loss and I'm done you

know and then I'll just just wait and

see what what gets hit uh but I found

that by being far more proactive and and

cutting positions well before my stop

loss gets hit that is the that is the

loow hanging fruit in terms of

increasing your nlv month to month and

year to year you know trying to trying

to extract another 15 or 20% of upside

out of a trade is is actually quite hard

to do but saving yourself 15 or 20% a

downside that that's actually really

easy to do so cutting losses sooner and

earlier I I find is is actually the

easiest way to improve your results G

such a good point such a good point man

that that people don't think about you

know that they're trying to maximize

their gains and they don't realize that

they can maximize their gains by cutting

their losses better just making the

losses smaller relative to Gams yeah but

trying to I love it I love it extract

all the you set of your Gams is is

really

tough it is um but again if your losses

are small then you don't have to you

know I mean that's just a fact it's just

a mathematical fact you know I get

ripped

on a lot because my draw Downs are so

small and so people tell me I should

lever up

more um because if my draw Downs are so

small then my gains can be obviously

that much bigger

um and uh I don't agree with that

concept but um because people forget the

the math and the psychology of it all

right

right um you know what I mean just

because I draw down 3% and make 10

doesn't mean that I'm going to draw down

9% and make 30 because it's gonna get in

my head you know what I mean yeah big

time you know and so you know I suggest

to clients that they can lever me up if

that's what they want to do without me

even knowing um but I'm I'm sort of in a

Zone where I'm comfortable with my draw

down so um but that's the key like I

said say to to my game is is keeping

those draw Downs small it helps your

overall gain clearly because you're not

making back losses all the time right um

You have a I had a like a three month or

almost a four month draw down this year

and the total drown ended up being like

60 basis points so like you know one day

or one week right and I can make that

back right now yeah sitting through four

months of nothing and nothing and

nothing you know what I mean just

whipping around and making and losing

and slowly kind of sucks um when you're

in the middle of it but when you come

out of it in a week you know it's

awesome and I think you'll agree this is

what it gets to a bigger concept of the

time frame in which you're thinking

right um I I think a lot of people are

thinking in the time frame of

today um how am I make money today and

the time frame you need to be thinking

about is you know to me 10 years how am

I going to make good risk adjusted

returns over 10 years which means this

particular trade and I know you've

spoken about this but this particular

trade really means

nothing what happens today really means

nothing right yeah that's such an

important Point too yeah yeah it's it's

just trading uh trading trading like a

business like a job I mean if if you're

if you're sitting in a a normal desk job

you know what you do today is really

that important it's it's the work that

you achieve over the you know the next

quarter the next year the next five

years whatever um trading is no

different it's a fact and I think this

is what people also miss for some reason

people believe trading is something else

um different than anything else in life

and

it's it's not it's just another thing in

life that takes all the good habits that

anything else takes right um

so we're getting in on the trend we're

getting in on the pullback of the trend

we're getting out on the failure of the

trend or we're stopping out on the

failure of the trend and then where are

we taking profits do you have a process

for that is this more feel or is this

more process oriented it is it is

process I mean what I'm really looking

for is typically I'm looking for a move

I'm looking for price to get from you

know I'm trying to ENT to near the mean

and and the mean for my purposes is the

21-day exponential moving average and

I'm looking to exit when price gets

extended away from the mean so typically

I'll look at the the stocks average true

range ATR and I'm looking to exit at say

2 to two and a half atrs away from the

mean and the mean is measured by a

moving average yeah exactly so I'm just

looking for Price getting extended away

from the mean at a point where a

reversion back to the mean become

statistically more more likely um I'll

also look at you know I'll look at

historical support and resistance I'll

look at you know Fibonacci extension

levels all of this will form a kind of

composite view of where I where I expect

price to go and and where I'm likely to

start taking taking profits and of

course if anything unexpected happens

then I'm liable to cut the position

sooner rather than

later so a lot of this is sort of um a

combination it sounds like of a

process within that process there's also

it seems like a little bit of a feel to

it as well a little bit of discretionary

feel to it as well there is definitely

discretion to it yeah it's it's not it's

not systematic what I do I mean it's the

systems provide guidelines all right so

I've got kind of Targets in

mind uh but if you know if we fail

before we get there I'm I'm not going to

stubbornly hang on and you know expect

that Target to be fulfilled I'll uh you

know I'll walk away with a smaller loss

than what I'd hoped for but uh it's

better than hanging on and letting a

small profit become a small loss and how

do you handle um position sizing is it

sort of every position that you put on

you have the same risk to your portfolio

or yeah yeah I mean I I I joke that

conviction is for

criminals and and saleside sales people

but uh yeah I mean the thing is if I

never all in I never load up on a

position all right because if if I do

that it it implies I know that this

setup is better than all the other

setups and you know how would I ever

know that and why would you just do

those if that was the case right if you

knew that a certain setup was better

than others then you would only focus on

those well let me ask you Jason how many

trades do you put on expecting them that

they'll be a loser all of them oh really

yes okay no I mean I I I expect every

trade I put on is going to be a winner I

I know they won't be but but I never put

a trade on that I think is going to be a

loser yeah otherwise I wouldn't put it

on all right but clearly that's clearly

yeah I say that as a joke although I

don't really say it as a joke I don't

expect them well in a way I do expect

them to be a loser I I like to be

surprised I guess is my point right so I

assume she's going to be a loser and if

she's a winner then I'm surprised and I

feel happy but anyway go ahead

so my my basic approach is I I'll take

uh two and a half% of my nlv risk on a a

debit position so a position I've got to

pay to put on and I'll easily risk 5% of

my nlv on a on a credit position so like

a credit spread any position where I I

get paid Inc come up front to put it

on

okay so you're risking about two and a

half% on certain trades uh two and a

half percent of your portfolio I think

on certain trades that's right and 5% of

your portfolio on on certain other

trades yeah that's right and how has

that uh Maj your return streams look if

I can ask what kind of V does your

return streams

have um if you want if you want yeah

look I look I Target a return of 5% per

month all right and wow you know nearly

nearly every month I make that and some

months I do you know substantially

better than that

um but what I what I used to do but

before before 2020 all right I was

risking 5% on every trade sometimes even

more than that and then when things got

kind of volatile during covid I I I cut

my risk right back and I I found that

you know even with even cutting my

position size in half I can I can still

make my returns and so I I just kind of

left the position size there I I never

I I always thought you know when when

things go back to normal in air quotes

uh I I'll increase my position size

again back to what it was preco but I

found that I just never needed to do

that I can still generate the my my my

target monthly returns with what I

consider to be a fairly small position

size some people have a fit some people

think oh you're mad if you risk more

than half to 1% of your position on a on

a trade but I think so long as you you

managed them carefully and and you've

got some asymmetry um you're selling

yourself short if you don't take a bit

of

risk yeah I'm definitely doing that um

everyone keeps telling me I'm doing that

but whatever um so are you telling me

that you're putting up 50% a year on

your uh on your account yeah that's

awesome how long you been doing that

for uh well I've been doing that since

uh

2017 17 18 19 20 21 22 23 for so for

seven

years you've averaged 50% a year on your

yeah well more than that I mean I I was

up 3 163% in

2020

geez that's awesome and what kind of

draw down does that entail if I can ask

uh I I have a risk management rule that

if I if my portfolio draws down to 15%

low a high water mark I sell everything

and go to cash

St you have to get in again at some

point so yeah but I I haven't had one of

those since uh October

2019 so you're putting up over 50% a

year return without a 15% drawdown yeah

that's

awesome and this is all

um your PA I guess are you managing

outside money or no I I don't I I I

don't manage money for other people I

mean I I had a Fred and I had a a very

serious look at setting up a fund back

in

2018 uh we met all of the prime brokers

in town in Singapore and you know we we

met lawyers and custodians and and we we

really kind of did a lot of due

diligence on it and I I just realized

that a it was going to take me away from

what I really love which is trading and

and teaching I I love teaching people

how to

trade and B it was going to be very

expensive to set up and it was going to

be a very very lean three years while we

you know established a track and and all

of that so uh and the other thing was I

I left the corporate

world with the realization that I'd

spent my entire corporate career helping

people who were already incredibly

wealthy either stay that way or or get

even wealthier and I wanted to put the

skill set that I developed to use to you

know help people who could really

benefit from from from the skills and

knowledge that I've

developed and if I set up a fund I'd

only be helping the the super wealthy

again Amen to that so on that note where

can these people find you to so that you

can show them how to uh how to do these

in in fact where can I find you so I can

make 50% a year but even besides that

where can can people find you I assume

it's to Toof trading.com or something

like that yeah that's right so yeah the

homepage is Toof trading.com that's t a

oof t r a d i n

g.com uh I've got a a book on Amazon by

the same name costs nine bucks for the

Kindle version and uh yeah I'm I'm on

Twitter Simon re Simon

re I'm on LinkedIn as well uh same name

Simon

re so they can go there and you offer I

assume some kind of your mentoring

service or some courses or or yeah so

we've got a we've got an online course

the flagship program is called options

Academy Elevate which will really teach

you everything that you need to to get

started all right everything from

technical analysis to setups to what is

an option to risk management and trading

psychology right getting getting your

mindset right uh it'll teach you

mechanics like debit spreads and

diagonal spreads and you know what is

Delta what is Theta um and then we offer

coaching and mentoring service called

options Academy accelerate uh where for

a monthly subscription uh people get to

see what trades I'm I'm placing each day

how I'm managing them you know the

winners the losers uh where I'm taking

profit where I'm cutting losses uh we

offer a bi-weekly

webinar so yeah that that's for people

who are yeah as the name implies really

looking to accelerate their

development cool well I would encourage

people to check that out um is there

anything else you could tell us maybe

just I'm just curious

because you name your thing the tower

trading I think that's a function of you

having a a dee rooted

um belief system or understanding of

sort of Eastern philosophy which from

what I can tell comes from and maybe I'm

wrong about know this but comes from

your involvement with uh with the

martial arts it sounds like to me right

that's right so I'm a in addition to

being a Trader I'm also a G condo

instructor and so CH kundo is the

martial art that Bruce Lee developed and

Bruce Lee wrote a wonderful book one of

my favorite books called the Tower of

jundo so really the the title of my book

is a an homage to Bruce Lee and and his

work so yeah I um had a big I would say

uh change in my life

um when I started to get into Buddhism

um and spent a long time at a

uh at a Buddhist Monastery um and it

really sort of changed me completely I

would say um yeah I read about that in

your interview with Jack schwager yeah

yeah

so without spending too much time on it

I guess but before we wrap up I do have

to ask you can you just give us some uh

some Les on that and and how that has

helped your trading and how that how we

should approach some you know is it be

like water or you know something to to

that effect that that that will help us

as people and as Traders yeah I mean be

water is I mean it sounds really really

simple but it's actually incredibly deep

and it can be interpreted so many ways

but I I think yeah just being

open-minded fluid adaptable don't be

rigid don't be locked in um yeah just

just always be able to uh adapt and

change and and you the way the way water

does I think the parallels between

martial arts and trading are numerous

but probably one of the one of the

clearest parallels I can think of is you

know in in in martial arts you you learn

to you learn to punch you learn to kick

you learn to block you learn to Grapple

but what happens when you what happens

when you take a hit you know do you does

does the does the motor die do you do

you crumple in a heap do you lose

confidence do you give up uh and look

it's the same in trading you learn how

to buy you learn how to enter you learn

how to exit you learn how to manage risk

you learn how to read charts but what

again what happens when you take a hit

is that that hit's going to come uh and

multiple hits are going to come along

the way and how do you respond to that

are you going to crumple are you going

to give up are you going to lose

confidence or you going to pick yourself

back up and Trust the

process beautiful it's so damn true in

life and in everything and in trading

but so damn true it's so easy to trade

you just open a brokerage account and

make a trade and there's maybe let's

call it a 5050 chance that your trade's

going to work right um and anybody can

do that you know but how do you respond

to the downside I mean it's just that's

to me that's the test of a human being

across the board right um

and um getting to

uh getting to how trading is is no

different than anything else in life I

think

that's it it's just it's just so damn

true I I love that I love that um I've

had to pull myself up by my bootstraps

on numerous occasions in this life and

that's really kind of made all the

difference and it's not like I didn't go

through the period where I you

know you know got in bed and got under

the covers and pulled the covers over my

head and and never wanted to get up

again you know but um at the end of the

day you got to stop crying and and get

back on your feet you know be it trading

be it anything um and and and even on a

micro basis of be it an individual trade

right like you said and like we know

you're going to have losing trades and

as disciplined as you stay there's going

to be times where that losing trade is

even bigger than than you expected it to

be for whatever reason liquidity dries

up something happens you know hesitate

for half a second on your stop and all

of a sudden the thing collap you know

who knows what right yeah but you

still you gotta come back man you know

what I mean you gotta come back is so I

love that I appreciate that

um I just saw that movie

uh Once Upon a Time in Hollywood one of

the great oh great movie yeah one of the

funniest Bruce Lee scenes and obviously

it's not really him but um to me just

funniest T Bruce Lee that that I've ever

seen I just was on last night I love

watching that scene anyway Simon it's

been a great pleasure to hear from you

um I hope that people will will visit

your site because it sounds like you

have a lot of knowledge um and it sounds

like you're having a lot of success and

um if there's anything else you'd like

to say please say it otherwise we can uh

we can say goodbye for now and um and

and and I really wish you the best you

sound like uh even know what you're from

Australia I'm from Australia based in

Singapore but I trade the US market y

even though you're from Australia uh you

seem like a really good

guy and uh and it's been great having

you on so it's been a real pleasure

talking to you Jason lovely to meet you

and uh love your work and yeah just keep

doing what you're doing man awesome

thanks man thank you subscribe to

crowded market report by Jason

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Shapiro

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