Debora
So Andrea, let’s talk about the main features of your approach, the systematic Unger Method applied to trading. The three main things to know.
Andrea
Well, I would like just to say one thing. You talk about the Unger Method and it sounds like a circus. Oh yes, here he comes… But the Unger Method is nothing but common sense applied to the development of strategies.
However, when I explained my approach to developing strategies and systems to other professional traders from all over the world, traders who have won world trading championships like me, so not just the last-minute improviser, they were all extremely amazed at my method from zero to a system. And they appreciated it very much, so this cheered me up because there’s actually something behind it, because I can see that even those who work and have experience in this field appreciate my method.
So, you ask what are the steps. Well, the steps are: I choose a market and study its general features with a software, so I can figure out if that market tends to follow the trends, or to make false starts and then rebound, and so on.
After that, I use other basic strategy models that I work on to come up with a final system.
And how I do that? By using a ready-made model. A ready-made script that, just like a dress, needs to be adjusted. I can add conditions – and I also have created a database of ready-made conditions that I’ve coded and sorted so development will be faster.
These conditions help me refine the results. Does this suit fit you well? Yes, look, you don’t look like a clown. Now let’s fix it. Let’s tighten it on the hips because you’re very thin. We’re going to raise your shoulders a bit because it makes you look more elegant. Let’s widen the end of the trousers because that’s trendy. Here all these things here, same thing. I’ll take the system, so does this system work well this way and at these times? Perfect. At this point we decide: do we want to work all the time or only when the market has been through a storm? Let’s test it, I have the “storm” conditions in one of my databases. So I run a test and see if the storm brings better or worse results. And then I decide. If I see that when there’s a storm it’s best to avoid trading, if there’s a storm tomorrow, I won’t do anything. And so on…
So this is a step-by-step, very schematic procedure. I start with the basic idea, like take the market and build a strategy on it. Then obviously you don’t go anywhere with only one strategy. So I build hundreds of them. And then, month by month I test these hundreds of strategies to see how they’re performing and decide what to do.
So what are the best performing strategies? I mean, it’s a bit like in a football team. You field the players who are in the best shape or who play the best for the type of opponent that you have in front of you. So, in the end, it’s all common sense. But it’s all sorted out. Although I’m generally a quite disorganized person, I did this in an orderly way because I have to be able to do everything quickly whenever I decide to do it.
This makes this method also replicable, because if I give it to you, you’ll have the same information as me. And at that point, you can use them to trade. However, to do it properly you need to know what you’re doing. I mean, I don’t feed it to the computer and it does everything by itself. I only use the computer to do the calculations. Because you know, if I do 2+2 on your calculator and it tells me 5, I say “No, there’s something wrong here” because I know it. There, same thing. You need a critical spirit. You can’t say, ok 2+2 = 5 simply because the calculator said 5. That can’t be right!
So the human being, you know we must always be there to use that information. And so the Unger Method is a common sense method, step-by-step, of building trading systems from scratch. Each trader system will be part of a portfolio containing several trading systems that the trader can put to the “battlefield” that is the market.
Debora
Thanks Andrea Unger and good luck with your work!
Before we say goodbye, here’s a last service announcement. For all the people who’d like to delve deeper into the concepts we have explored during our conversation, you can order Andrea Unger’s book, “The Unger Method,” which is available on the Unger Academy website. You’ll receive the book at your doorstep. It’s free, and you only cover the shipping costs: so happy reading, everybody!
