Interview: Trading automation is a new holy grail
Program(s) Developed: Aquila EMD trading system
Interview Date: March, 2019
Interviewed by Martin Lembak
Martin Lembak: Hello Marek, how did your trading career get started? Can you tell also our readers a bit about yourself, where do you live, where did you go to school and so on, please?
Marek Chrastina: Hi Martin, thank you for this interview and space here in Striker Report. My base is in small city surrounded by the mountains in the middle of Slovakia, but I am travelling a lot and spend significant part of time on the roads. Regarding the studies – my specialization at high school was math. At university I studied economics, management and after that, psychology. It seems that this combination together with my talents creates strong advantage for the world of trading. My first contact with trading was at the university more than 15 years ago where I attended trading lessons at the faculty. That was the start of my trading education which has been continuing throughout all next years till now. After my university studies I devoted myself to other businesses which are still operating and are lead by my business partners. That is why my full time trading career started already in 2009.
My speciality from the beginning was (and still it is) – portfolio management, risk management and robustness testing and trading system evaluation. I started in OTC markets enviroment where I was working with few fund managers as risk and portfolio manager. After few years in this role in FX markets, I moved to futures markets and started to build automated trading systems in-house and applied all that risk and portfolio management know-how and experience to creating and trading own systems and portfolios.
Martin Lembak: I know you cooperate with a friend at Quantum Financial that is professional energy trader. Does he give you ideas that can be also applied for other markets?
Marek Chrastina: We are running the research project, applying of our directional algorithmic style of trading to some very specific energy related markets and induct this to their institutional environment.
Martin Lembak: Can you describe main points and philosophy that are your strategies based on? Indicators? Price or time action? Something else?
Marek Chrastina: Majority of our day-trading strategies are based on breakout principle. For swing systems we build breakout and trend following algorithms. And in the near future I plan to focus on building contrarian strategies.
For building I am using mainly price action. Sometimes are used some special “tools” as market internals. I am not big fan of indicators. I use few of them in my systems, but I choose them very carefully. There are still few very strong ones which can describe some characteristic or behavior of the market, so I use them to define specific entry or exit level.
Martin Lembak: I learned and was very pleased that you try to apply prudent portfolio approach. What statistics and, or characteristics are you mainly looking at when constructing the portfolios of quant strategies?
Marek Chrastina: Yes, for me is well desined portfolio absolutely crucial aspect of long term profitable trading. Synergy which provides good portfolio stabilizes equity, enhances performance, lowers drawdowns, protects capital in the case that some system stop to work or have larger drawdowns, increases NP/DD ratio and much more. This topic is suitable for a book.
During the years I used to apply more different approaches in portfolio design. In the past it was the combination of systems where each one traded different market move and used different logic. E.g. combination of trend following breakout system, mean reversion system and end of trend contrarian system. This approach can be used also to trade one market or very correlated markets.
But I moved further and now I design multisystem portfolios with the aim to trade different markets and market segments in combination with strict correlation analysis on different levels. Anyway, future belongs to the algortithm which will dynamicaly manage multisystem portfolio and switch on-off the systems and manage the position weight of each trade separately. The research of this tool is alredy in progress.
Martin Lembak: Do you have anything in the “What’s New” category you would like to share with our readers?
Marek Chrastina: Development of trading systems is still running and we are producing more trading systems that we are able to trade in our account. That’s why I’ve prepared well diversified portfolio consisted of well selected robust trading systems which we can offer exclusively at Striker (or Striker white label brokerage firms) to first-one investor for free (any license fees will be applied). Learn more about this option on our website (www.quantumfinancial.org).
Also we have in mind the idea of education institute (Quantum Trading Academy) where we want to share our knowledge and trading experience to help others. I think it will be established in second half of this year.
Martin Lembak: For other developers or traders reading this interview, what books or study courses do you recommend for someone to learn how to program trading systems?
Marek Chrastina: Continuous learning and extending know-how is essential to survive in the markets and grow. I also allocate big part of my time to increasing education and learning new things.
There is lot of good stuff on the market. I try choose few pieces of it. Good overview to system development can provide: “Trading Systems: A New Approach to System Development and Portfolio Optimisation”. Intermediate / advanced reading is “Evidence Based Technical Analysis”. For money management overview can be good choice to read is “Definitive guide to Position Sizing”. There are also nice books and training programs from some other traders / fund managers who were interviewed here in Striker Report in the past (e.g. Kevin Davey, Tomas Nesnidal. For sure I recommend to read all Nassim Nicholas Taleb’s books. And of course, I hope we will also deliver some interesting education programs in Quantum Trading Academy in the future.