Interview with AlgoFlows
Neural Network, Taylor Swift, Chess & Trading
Between scalping the US indexes, programming, vaping (note: we both stopped), playing bullet games, writing, and a secret passion for Taylor Swift (yes), I have a lot in common with today’s guest.
Ladies and Gentlemen, please give a warm welcome to the one and only AlgoFlows.
I will give a free 30-minute 1:1 coaching to a reader who shares this post on Twitter (tag me so I know who did).
Take advantage of APEX’s 80% promo code to start the new year.
Listen to the series of episodes ‘How to start building your framework’ on Spotify, Apple Podcast & Amazon Music (Trade with Retail)
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Hi
, thank you so much for doing that interview with us today.The goals of this interview are:
Learn more about someone who is successfully using Python/stats in his daily trading.
To show you what is possible when you work hard.
Q) First of all, could you post a picture of your trading setup and one of your trading charts to show the readers your trading environment?
My chart has my levels (a fellow subscriber to the substack made the indicator where I input my daily, overnight, and weekly levels).
I also use the Volume profile before the start of each session to analyze the shape and participant volume. During the session, I have a live stream of bookmap/jigsaw running on my TV.
Q) When did you start your trading journey and why?
I started trading in 2012-13 and primarily to make more money. I did not have a “trading is my passion” story at all, I wanted to make money and I was able to code decently.
Q) What does a typical day of grind look like for you? I feel like I see you post on Twitter at literally every single hour of the day. Do you sleep?
I wake up at about 7-8 am EST, glance through the news(mostly useless and priced in but it’s a habit), get in a quick workout, and start trading at or before RTH open. During the day I aim to take about 5-6 trades on ES/NQ mostly. I sometimes trade CL and GC but not too often. In the evening, most of my time is spent trying to optimize my model and I sometimes put on a few Globex trades here and there. But I have cut down trading all the time. It's not sustainable.
Q) You share a lot on Twitter, and you’re pretty vocal about the use of Python in your trading. Could you describe your atypical trading style in a few words to us?
My trading style can be summed up as fading short-term trends for the longer-term trends in a nutshell. This makes it look like knife-catching (and it probably is), but I use neural networks to identify key levels where I attempt mean reversion trades. In 2023 I had a long bias so I had to manually exclude a lot of short trades (this is the discretionary part of my trading).
In my daily levels, I try to long at supports and short at resistances (not a huge fan of shorting since 2023 Feb, as I explained in my Newsletter)
Q) Can you show the evolution of your equity curve from 2023? Can you explain how you dealt with the sustained drawdown during the year?
My equity curve had a drawdown from the September end. I have a long bias in my investing and I kept dollar cost averaging into my long-term portfolio.
Shorting is not lindy1, no matter how you put it, shorting individual stocks is just putting negative energy into the universe, someone is trying to sell a product or a service and you want to see them fail not by creating a competitor but by betting on them failing.
Q) With everything that you achieved in 2023, what is your plan for 2024?
Honestly, to trade less. Take fewer higher conviction trades and explore the world outside of trading.
Q) I always ask if people have a mentor. On Twitter, you always mention yours. Can you tell us how you found him and what is the most valuable lesson he taught you?
My mentor is my grad school professor who loved to trade using operations research techniques(back then it wasn’t called data science ha!) and I think the best things he ever told me are these:
There are no bonus points to make money the hard way.
When people tilt, they abandon everything and just want to be in a trade. Any trade. Profit or loss doesn't matter. All they want is to be in a trade. So having a checklist before every discretionary trade is mandatory
Survival is success. Hitting your max daily loss/weekly loss is fine. Variance is natural and is to be expected.
Enjoy life, trading is after all a very boring job that adds practically no value to society
[Note from Retail: The first quote hit me hard the first time I read it from you. To this day, I still think about it every day.]
Q) You often seem to fade the market. Can you please share with us why you mostly picked that style as a scalper? (or at least, that’s the feeling from reading your tweets)
I have stats on indices wherein I know with a higher degree of probability of mean reversion in certain scenarios. For example, last week, I mentioned a couple of those:
If the edge is good enough, I do not care about short-term price movements, especially with options.
For NQ and ES futures I will have to be precise so that is where I use my levels.
[Note from Retail: if you’re interested in this approach, you can go through Algo’s feed on Twitter. His pinned tweet has a lot of information. You also have my free Python course to get started here.]
Q) Do you remember your worst and best trading day ever? What did it look like?
The best was shorting Solana during the FTX crash. Holding on to winners there was the key I believe. The worst has to be the December 2017 crypto crash where I was boorishly long BTC and ETH and pretty much nuked my accounts.
Q) Do you have one piece of advice for the readers who are struggling in their trading journey?
Quit after 36 months.
All the resources are available and you can become profitable in 36 months if you follow all the risk parameters and develop a 1.2 sharpe plus strategy. There is more to life than learning to trade.
Salary has an infinite sharpe2.
Q) Where can we find you/read more about your work?
I would love your readers to subscribe to my substack and read the letter, 80% of the letter is free and has my general feel for the market. The levels and telegram are paid but no pressure to join and no substack will make you profitable, it is all you.
[Note from Retail: this is not affiliated, I simply love Algo’s work]
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Guys, thanks for reading this interview. If you have any questions, Algo & I will meet you in the comment section.
Here’s a summary of my most actionable content of the week
Risk is dealt with by doing business at inflection points Trade management/exit is dealt with by understanding rotations and ranges.
Two podcasts on How To Start Building Your Framework (Part I and II). Part II has a much better audio quality now that I received my microphone. Give it a listen & a 5-star rating.
Remember that it's far easier to see where Price doesn't want to go rather than where Price wants to go.
📈 What’s coming up
Interview with [SECRET]
Dead Dreams, Part II
How I Trade (10h+ of video)
One setup to rule them all
📚 If you missed it, here are the latest articles
Be kind. Do good.
Cheers
RC
> Take advantage of APEX’s 80% promo code to start the new year.
The Lindy effect is a theorized phenomenon by which the future life expectancy of some non-perishable things, like a technology or an idea, is proportional to their current age. (Wikipedia)
The Sharpe ratio is one of the most widely used methods for measuring risk-adjusted relative returns