Algo Trading Talks with Goshawk
Algo Trading Talks with Goshawk
From idea generations to the automated strategies
Alright, folks, you guys are lucky. We had some amazing guests in the last 3 years, and the show must go on. Today, we have one of the biggest rising talents in our industry.
Something I absolutely hated when I was working corporate was people not taking me seriously because of my age. I was in my early 20s, but very good at what I did. I quickly became the lead of the team, and 30, 40, and even 50-year-old actuaries had to report to me. They didn’t like it. I promised myself that whatever I would do after, I would do my best not to be like them. Learn from people. Always.
Age is just a number, and today’s guest proves it with his amazing career. He is one of the hardest-working traders out there. He shares more than anyone else on algo trading on his Twitter account.
Ladies and Gentlemen, please give a warm welcome to Goshawk.
He’s been very professional, kind, and patient with me while I was preparing for the interview and doing the formatting.
There is a lot to learn from this interview, so buckle up folks, you’re in for a wild ride.
If you have a strategy you want to have automated, Goshawk is your man. Just have a look at the reviews he got. All the links and information are at the end of this interview.
Hi Goshawk, thank you so much for doing that interview with us today.
The goals of this interview are:
Learn more about someone who has successfully implemented algo trading.
To show you what is possible when you work hard.
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It took us hours to prepare this interview. Please, take 5 seconds of your time to like it and share it. To support the Newsletter, you can use the code GVXZJABB for 90% off with Apex or get my series of video with the one-time big discount code KITTY available until tonight for the first person to get it.
Q) Firstly, could you post a picture of your trading setup and one of your trading charts to show the readers your trading environment?
You shared on Twitter a year ago that this is where it all started almost 5 years ago:
Since all my futures trading is automated, I don't have any fancy chart setups. They all just run on NinjaTrader, some on local machines, and most now on an AWS1 EC2 server. I recently moved, so my desk setup isn't complete yet. However, here's a picture from my London setup with some volume indicators on a futures chart.
Q) You said that you discovered trading in late 2019. Firstly, your success in such a short amount of time is impressive. You lost half of your $4000 account in a day, which was a lot of money for you at the time. In a world where people give up very quickly, you didn’t. What made you stick to trading?
Every time I wanted to give up, I'd normally sulk for two days to a week, convinced I was a terrible trader who would never succeed. But then I'd reach the same conclusion: if I wanted to provide for my family and create the life I desired, this was the best path.
There was always the safety net of my low-paying accountant job, or even a software engineering position. I even created a tree diagram mapping out the different paths my life could take. It always pointed towards pursuing trading in some way, with the time to success being the biggest unknown.
It wasn't that I never felt like quitting. In fact, there were times I did give up for a day or two. But I always got back on the horse and gave it another shot. It's important to remember that trading can completely destroy your life if you don't know when to walk away. Luckily, I'm incredibly obsessive, so I always found myself drawn back to it.
Note from Retail: The tree diagram is a fantastic example. There are signs and little things that some people do, and you just know that they have it in their hearts. Awesome job.
Q) What does a typical day of grind look like for you?
I currently am involved in a lot of different things, but on a typical day I will wake up around between 6 and 7 hours before the market opens and make sure all my futures algos are working and no issues have arisen overnight, I then spend the morning focusing on two key tasks I noted down the day before.
This can be strategy ideas I wanted to backtest or finishing up a client’s algorithm. I just try and get my day started productively. One hour before the market opens I will also check out the equities markets for gapped-up stocks that I still trade manually using my systematic strategy and place or adjust any orders needed. I will continue to monitor these through the trading day.
The remainder of the day is a combination of modelling for my own strategy ideas, working with other traders, and spending time managing and developing AskEdgar. Overall by day's end, I have spent 11+ hours at my computer and then I will head to the gym for an hour with my girlfriend. As you can see it’s incredibly boring and repetitive but consistency pays off and leads to profits from my experience.
Note from Retail: I know I’m repeating myself, but this is what I say all the time. Full-time trading (manual or algo) is a lot of work. Day in, day out.
Q) You’ve recently moved from the sunny London to Dubai. First of all, congratulations! Our job is very lonely. Thanks to Twitter, it’s less. Did you connect to other algo traders there, and more generally, how will Dubai change your approach to trading/business?
I stand to make 40% more immediately by no longer having to pay such high taxes. Additionally, I've always been more productive on sunny days, and Dubai's constant sunshine is perfect for me. I've already met some amazing people here, both developers and traders.
However, my priorities remain the same. I'm not interested in the typical Dubai luxuries like yachts. I see Dubai as a place to exponentially grow my income, not spend it frivolously.
Q) You share a lot on Twitter, and you’re pretty vocal about the use of backtesting. If you had to summarize in less than 5 bullet points, what would be your best advice for someone who wants to get started with the algo path?
Focus on simplicity over complication;
It’s never about a single strategy but a portfolio;
Focus on variables you can model, forget the rest;
Algo trading doesn't remove your emotions, it simply takes it out of a singular trade;
Curiosity is the biggest edge you will discover.
Q) You have helped more than 150 traders over the years through your website. How did that help you become a better trader in your journey?
Seeing that many traders have a profitable strategy but can't consistently execute it or it doesn't generate enough profits for them, they overly tweak it, ultimately ruining its effectiveness. Additionally, many mistakenly believe they're systematic when their strategies aren't broken down enough. There's no fault on their part; this is exactly what we help with – identifying and quantifying their ideas to become automated.
It made it crystal clear to me that I had to focus on simplicity and trying my best to not touch the strategy once it was running.
Q) I believe you once mentioned that an algo you built for one of your clients manages more than $1m. Can you tell us a bit more about this?
Although the strategy's criteria are under NDA, I can share some takeaways from it.
I couldn't believe how simple he kept it. Just a trend-following system we slowly built a portfolio of strategies around. He showed me the power of a decade of market experience plus data, nothing comes close to it.
Once you get past a million in sizing, slippage and order routing are incredibly important, so we had to focus a lot of our time on the execution engine to efficiently break up orders and pyramid.
Q) It’s a question that my readers often ask: are you scared that your algos suddenly stop working? Did you ever ‘put to sleep’ one of your algo that was running live?
I've had to kill off a lot of strategies, many at the beginning of their lifespan, but I believe the hardest were the 3 I had to put to sleep after working for more than 4 months.
To me, it's like worrying about losing on a trade; it will inevitably happen, and you can't predict when.
That's why Jim Simons emphasizes the importance of constant research. You never know when you'll need a new strategy. It's part of the process, and in my eyes, it's actually a fun part! I get to keep researching (my favorite part) for the rest of my trading career.
Note from Retail: Here’s a great thread from Goshawk on Jim Simons (You can click on the image).
Q) I always ask if people have a mentor. I know you often interact with the goat TheShortBear. Do you have a mentor, and if yes, what is the most valuable lesson he taught you?
I've had a couple, and that's a big reason why I grew my Twitter and became so dedicated to posting as much value as possible. I often get the occasional comment that I'm sharing edge for no reason destroying the edge, but knowing there will always be new edges, I don't mind sharing some insights to get in front of some of the biggest traders on Twitter. The key lesson that applies to everyone is: It's the boring, non-fancy work that gets you success. It's the constant adaptation, constant backtesting, and hard work you put in every day. I know it's a hated answer because it doesn't provide a solution to all people’s trading problems, but it's true.
Q) Do you remember your worst and best trading day ever? What did it look like?
The worst day was being up nearly 100% on my account, only to end the day negative due to a small-cap halt. I ultimately shed a tear on the floor, muttering 'I'm done.' But as mentioned, three days later, I was back to journaling about my mistakes and trying again.
It might be disappointing, but I don't think I've had a single 'best day.' Looking back on past successes they often led to mistakes in the following days due to overconfidence. I believe the best days are the present moments where I can look back with immense pride at the work I've put in to get this far.
Q) With everything that you achieved in 2023 (and early 2024), what is your plan for the rest of the year?
Besides focusing on arbitrary PNL goals, my primary goal is to achieve continued consistency in my algorithmic portfolio management. This means avoiding quick changes to the algorithms due to drawdowns and gradually increasing their size throughout the year. Additionally, I aim to continue growing Unbiased Trading and collaborate with even larger traders or funds to automate some or all of their trading activities.
Q) Do you have one piece of advice for the readers who are struggling in their trading journey?
Pivot to your strengths. Instead of focusing on what you're bad at, focus on how your strengths can overcompensate for your weaknesses. In my case, I was terrible at reading markets, but I knew how to code and analyze data, making the realm of systematic and algo trading much “easier”. My terrible market reading skills were mitigated by my ability to analyze data and design strategies around the inefficiencies I found.
Q) What is your favorite trading podcast episode and book? [Note for the readers: Goshawk recommends a lot of books on his Twitter account, have a look at them if you need inspiration]
I love your podcast, but I will always love Chat With Traders (especially his older episodes), and for books anything by Ernest Chan or Timothy Masters is great.
Q) If the readers are interested in working with you on a project, what is the best way for them to proceed?
Be sure to visit my website to book a free 30-minute consultation where we see how we can help either backtest or automate your trading with a quant dev team.
Otherwise, I'll be hosting a one-hour strategy creation session where we'll go from idea to deployment-ready. I'll showcase the entire process. Be sure to follow my Twitter for more info.
Website: Unbiased Trading
Twitter: @Goshwak
Youtube: Unbiased Trading YT Channel
AskEdgar: Find Trade Opportunities
Thank you for reading folks.
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Resources
If you love the podcast Chat With Traders, give a listen to Band of Traders. Here is one of my favorite (recent) episodes. Good ones too with Slic Ric 2 weeks ago.
My recent episode on trend days from Trade with Retail.
You can find my series of videos here where I share my screen and walk you through my process.
In 2 weeks, if there is enough demand, we will meet for lesson 3 on market elasticity.
Amazon Web Services (AWS) is the world’s most comprehensive and broadly adopted cloud, offering over 200 fully featured services from data centers globally
Great interview.
https://open.substack.com/pub/emilyalexandraguglielmo/p/my-first-public-blogpost?r=2mtps5&utm_medium=ios