Author and Trading System Developer from Vasteras, Sweden
Program(s) Developed: Chicago Systems
Interview Date: May, 2006
Interviewed by John F. Gallwas, Founder of Striker Securities, Inc.
An interview with Thomas Stridsman, author of numerous articles on trading for Futures Magazine ™ and Active Trader Magazine ™ , as well as two highly acclaimed books for McGraw-Hill Publishing Co. ™ " Trading Systems that Work" (2002), and "Trading Systems and Money Management" (2003). A native and current resident of Vasteras, Sweden, 66 miles West of Stockholm, he has recently formed ThomasStridsman.us, to research and market trading systems.
He is also registered with the CFTC as a Commodity Trading Advisor (NFA #295130).
John Gallwas: Your interest in the markets dates back to your college days in Sweden, where you majored in macroeconomics with a special interest in the derivatives markets. What is it about the markets that brought you to this point in your career?
Thomas Stridsman: To me there are two elements that keep pulling me back to the markets. The first is the intellectual challenge to interpret what is going on. What causes the ebb and flow of a system's performance, and what can you do about it? And once you think you have an idea, you have to figure out how to formalize that in to some kind of strategy that can catch that process. Notice that I say ‘catch the process', not catch the money or something similar. My research is focused on the process, and if successful, the profits will flow. The second reason is the risk taking. Although I identify myself more as researcher than a system developer, I like to take my own risks; if not always in trading, then certainly in other areas of life. I mean just having moved between two continents numerous times demands a certain willingness to take risks right there.
John Gallwas: We know over the years, because of your work as an analyst as well as the author of two books on trading systems that you have been encouraged by many to become a system developer yourself, but haven't attempted it until now. What caused you to take this exciting step forward?
Thomas Stridsman: To be perfectly honest, as a financial reporter, I have seen many charlatans in the systems trading industry, and it seemed to me that at least every other systems developer was willing to climb over his dead mother to make a buck at the trader's expense. I was terrified to associate myself with that group in any way shape or form. That's why I wrote the books, out of anger if you wish, to help my readers see through or step through the thought process. Whether you're about to build a system on your own or buy from someone else, if you have read one of the books and it hasn't helped you become a much more critical examiner of trading systems and systems trading, you have no one to blame but yourself. Now that the books are published, I feel I can offer trading systems to the public, because with the books I have given the reader every honest, objective tool I know of in order to evaluate my systems. With this preparation, I believe I have earned the right to market trading systems, but had I not earned the right, which is very important to me, I would not have formed ThomasStridsman.us.
John Gallwas: In your book "Trading Systems That Work", you wrote that a trading strategy is like a "process machine". Please tell our readers what you meant by this.
Thomas Stridsman: To best understand this, we need to separate a trading strategy in to two parts, the actual system part, with the buy and sell signals and the money management part with the logic and math for how many units (shares, contracts, etc.) to buy and sell. Now, for every signal the system generates, the number of units to trade can vary between zero and some reasonable amount in relation to your account equity. The exact number depends on a lot of things, such as the universe of instruments from which you are picking trading candidates, how many trades you already are in, the direction and open performance of those trades, what instrument category those markets belong to, which system generated the signal, how many signals were generated simultaneously, what is your total value at risk, and so on. All these relationships are strongly interlinked and dynamic, meaning small changes in one part will have significant effects elsewhere. This holds true both during the research process and during real-time trading. Making a decision and acting on it seldom means the end of something, but usually results in the start of something new, with still more decisions to make on a never ending and continuous scale, all of which are factors of proper money management.
John Gallwas: Describe your new service and where can our readers go to get additional information.
Thomas Stridsman: Currently, I am marketing a stock index system I call "Chicago". As opposed to most other commercially available stock index systems, Chicago is unique in that the trader receives trading signals for all four e-mini markets, the S&P 500, Nasdaq 100, Russell 2000 and the SP400. In addition, a unique feature of this system is that it comes with two different entry signals per side and market, with the first signal (from a flat position) being slightly riskier than the second signal. The first signal is for aggressive traders, where the second is for the more conservative. Another unusual feature of my service is that to help traders with their money management programs, I post a weekly "discretionary overlay" on my website, with suggestions and comments on how to vary the level of aggressiveness with which to trade the different markets and signals. For additional information contact Martin Lembak at Striker Securities, Inc: 800-669-8838 or 312-987-0043 for non-US calls, email@example.com or go to my website at www.thomasstridsman.us.
John Gallwas: Do you have any projects in the "what's new" department that you can share with us at this time?
Thomas Stridsman: In addition to the research and development of new futures and securities trading systems at my Vasteras office, an associate and I have put together a series of lectures and seminars at the University level for algorithmic trading, money management, portfolio composition, and trading as a business. The classes will be conducted under the name of "Scandinavian Institute of Finance", an organization we founded for educational activities. The classes, which may well be the first of their kind in the world, will initially be held twice a year in cooperation with my old university, in Uppsala, just 42 miles North of Stockholm.
This interview is for informational purposes only and is not intended to be
a solicitation of any kind. Trade only with risk capital. The risk of
trading can be substantial and each investor and/or trader must consider
whether trading systems are a suitable investment.
There is a risk of loss in trading. It is the nature of commodity and securities trading that where there is the opportunity for profit, there is also the risk of loss. Commodity trading involves a certain degree of risk, and may not be suitable for all investors. Derivative transactions, including futures, are complex and carry the risk of substantial losses. Past performance is not necessarily indicative of future results. Please read additional risk matters on our web site, www.striker.com. It is important you understand all the risks involved with trading, and you should only trade with risk capital. This communication is intended for the sole use of the intended recipient.
About this report The information and links on this website are for informational purposes. The risk of trading can be substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Striker is a member of the National Futures Association ("NFA"), the Managed Funds Association ("MFA"), and the National Introducing Broker Association ("NIBA"). Striker is registered with the Commodity Futures Trading Commission ("CFTC"), and was formerly registered with the Securities Exchange Commission ("SEC"). Additionally, Striker is a former member of the Financial Industry Regulatory Authority ("FINRA"), and the Securities Investor Protection Corporation ("SIPC"). FINRA is the largest non-governmental regulator for all securities business in the United States. Please read Striker Disclosure Statement for the additional disclosure.
The trading performance cited throughout our web site is based on actual trading history, unless otherwise noted. The starting account balance is based on the system developer recommendation. Striker tracks actual performance by recording and maintaining each trade ticket for each system generated. The performance information assumes that no additions or withdrawals have been made. The rate of return for all systems disclosed in the Striker Report is cumulative from the day the system actually started trading at Striker. We maintain a "life" track for all 3rd party systems. We do not necessarily base our records on any particular client account. No one particular customer has achieved these results. The percentage returns reflect inclusion of commissions and fees.The actual percentage gains/losses experienced by investors will vary depending on many factors, including, but not limited to: starting account balances, market behavior, the duration and extent of investor participation (whether or not a client takes all signals for a system) in the specified system and money management techniques.
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