Investments and the Unger Method with Debora Rosciani from the Main Financial Radio in Italy

by Andrea Unger

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This is a tough time for those who want to invest.

The introduction of highly volatile new instruments such as cryptocurrencies, the effects of the pandemic, and the ever-increasing efficiency of traditional markets are posing new challenges to investors and traders.

We're convinced that to face these challenges in the best possible way, it is essential to approach the markets with proper preparation and adopt a serious and rigorous method that allows for diversifying investments and managing risk properly.

In this interview with Debora Rosciani, a journalist for Radio24 (Sole24Ore group), Andrea explains the fundamental principles of the Unger Method, that is, the trading method that let him win the World Cup Trading Championships 4 times and live off trading for over 20 years.

Enjoy! 😉

P.S. This is the final part of our series of interviews with Debora Rosciani in which we talk about investments. If you missed the previous ones, you find them all here on our blog!

 

Transcription

DEBORA

Hello everybody! Today we are going to be talking about an extremely important topic: how to invest, how people invest, what's their idea of investing, what's their approach, their strategies, and their methods of investing. 

We'll do this with the help of the protagonist of a success story that represents a model, a goal, an objective for many people. However, we really need to say that often, the ambition to replicate other people's successes is not enough, because today we're talking about success in a very special field. A field that arouses a lot of curiosity but to which people often approach with illusions, and so they often end up in disappointment. 

If you're watching this webinar, you already know who I'm talking about. Today I have the pleasure of speaking with Andrea Unger, a professional trader who's the only one in the world to have won the World Cup Trading Championships in the Futures category 4 times.

Let me introduce you to him. So Andrea, here we are! Welcome! 

ANDREA

Thank you, Debora. Hello everyone! Good morning!

DEBORA

So, why are we talking with Andrea today? First things first, Andrea's not here to give us the recipe or the secret to achieve the same results as him. Today Andrea will explain to us, in a simple but very clear and strong way, that investing is about method and patience. It's a matter of being professional. 

Contrary to what many people believe, there are no tools that can make you rich. They believe that taking a one-month course in trading - so to trade the markets - is enough to make ends meet and solve their family's budget issues. But trading is an extremely complex thing. It certainly offers many possibilities and many opportunities, but it's also necessary that you're prepared and have the right mindset. It's essential to have strong psychological and emotional defense mechanisms, as well as a method and a lot patience.

So Andrea, if you were to describe and sum up in a few points how your method works, so what the Unger Method consists of, what would you tell us? You must have probably done it a thousand times, but how would you describe it? How could you explain it to those who approach this world for the first time and have heard about your Academy, and want to know what kind of guide you are in this field and in this market?

ANDREA

Well, first things first, I don't want people to confuse the Unger Method with an investing trick. Because you know, there are no tricks here. As the word itself says, the Unger Method is a procedure that consists in studying the markets and then building trading systems that perform well. 

So what does the Unger Method do? It takes the data of a particular market and studies them methodically... I mean, it studies them with method... Okay, it's difficult to explain it without repeating 'method' all the time! But it studies them methodically, following a predefined process. First of all, it checks what the best times are to open the positions. And how does it check that? Well, it does it by testing historical data, running simulations, and identifying the most promising times for a market entry. Never enter as soon as the market opens. Never enter in the last few minutes. Enter during specific time windows. And this is one part of the method. 

Then, it also studies the type of market. So for example, does this market tend to run, or does it tend to bounce? And it does it by using a very simple script I've shown to people several times. 

Then, based on the market characteristics, it takes some pre-built scripts and says, "Ok, since this market tends to bounce, it'd be better to use a script that tries to buy on the lows and sell on the highs, rather than a script that follows an ongoing trend because if the market tends to bounce and I follow it, the very first position I open may end up in a loss. And so on. I use the right script, and starting from that script, I begin to develop my system. I define the times when it's better to open the positions, and I also ask myself, "is it better to trade at all times, or is it better to do it only under certain conditions?”

And conditions are another part of the Unger Method. So I take a series of market conditions that have already been coded, and of course, I share them with my students, and they can also add their conditions if they want. And those conditions help me identify the current market situation. They read price trends, the conformation of pieces. For example, during the day prices may have continued to rise from morning to evening. The market opened halfway. It went down, it went up, then it went down... 

These pieces of information can all be coded in short scripts. And then I ask myself, "in these conditions, does this market tend to follow the trend better after a quiet day or after a turbulent day?" I use statistics to know what works best, let's say, and then I use these kinds of filters to say, "enter between 10 and noon, but do it only if yesterday the market was quiet, because if yesterday it was turbulent, then after 2 pm things get worse." And so on and so forth.

These are some very simplified examples that may help you understand the method a little better. With this method, the final system is built one brick after another, and all the bricks are built by studying the behavior of the market. 

There's an analogy that I often make when I explain it. Suppose you fell in love with a girl and wanted to contact her and talk to her. Perhaps you'd start studying her behavior, you'd start studying her movements to know where and when you can meet her. You may learn that in the morning, she tends to be in a bad mood because maybe she sleeps badly because there's a train station nearby, and so if there's a train strike, she could be more rested that morning.

Starting from these pieces of information I can say, "Ok, I'd better meet her after she's eaten the first course because after the second course she starts to hurry. She no longer wants to talk because she has to clock in" and so on... and also, I should offer her a dessert because she has a sweet tooth... 

I collect information the same way I do with the markets. In this case, I ask her friends and acquaintances what she usually likes to do. And then, I put all the information that I gathered together and I decide what to do. But of course, if on the day I meet her, she’s just argued or she's just won the lottery, her character will be completely different from the standard, and I’ll end up in trouble.

DEBORA

The "black swan" of each of us, here it is.

ANDREA

Well, it's just one of those things... But in those cases, there's the stop loss. You pay for the cake and go home. 

DEBORA

Okay, so you've just explained the most important criteria that could identify and explain what you do, but the way to go must be very long for sure. 

However, for now, let's hope we haven't discouraged too many people, but that instead we directed them towards a prudent, responsible, and conscious approach to this world because as I said at the beginning of this interview, and as we said together, this is an extremely complex world in which we need to move with great caution, but that is also full of opportunities and possibilities. 

Possibilities that - let's end with this, Andrea - have multiplied dramatically in recent decades. So my last question for you is this: has it become easier to trade - since you can now use your systems to analyze a much wider range of instruments and investment assets - or has it become more difficult and complicated for you and your trading approach?

ANDREA

Probably both. Because yes, there are more instruments and assets now. For example, going somewhat against everything we've said, now cryptocurrencies offer new opportunities for those who trade the markets with a certain approach. And so, I’ve decided to allocate a part of my capital on crypto because I've seen that today, I can trade this market the same way I trade other markets, thanks to the technological improvements that have been introduced. On the other hand, things have also become more difficult because mass participation in the markets has made them more efficient, let's say, and efficiency obviously means that it's more difficult to see the prices run in a certain direction. The cryptos are not efficient yet, because seeing their excursions you don't know what the right price is.

The most efficient markets, such as Mini S&P and Dow Jones, respond well to a type of approach that I call "pim pum pam, up and down trading", and in that case, one way or another, one understands what to do. But in the case of those markets that are going from inefficiency to efficiency, they’re in a transitory phase, a bit like teenagers, so you don't understand what they want. And very often, you need to adapt your analyses and try to figure out at what stage of their transition they are, which makes things a bit more difficult. When they were more inefficient, it was a bit simpler to trade them because you just had to jump in somewhere, and everything was fine. Now you need to study more. 

The good thing is that the experience I’ve gained through the years helps me deal with every situation, and so I'm prepared today. This should be an additional invitation to those who want to approach investments because even a simple investment such as, "I'll put the money somewhere and then I'll get it back in 10 years" should be thought of. Because we've seen that stock indexes are skyrocketing, bonds are skyrocketing, so what should one do? The fact is that everything now requires study and logic, and only then can one decide and say, "Yes, that can be fine for me." Because you know it, there's no formula, no secret recipe. One says, "This may suit me." And then he may ask you, "But how much can I earn?"

DEBORA

Exactly. Now it is objectively a hard time for investing. Many listeners on Radio 24 tell us about it. And that's why there are 1,800 billion euros in the deposits of Italian people. We’ll see in the future if someone will take a small portion of that money to try and invest it according to the Unger Method, which is very wise, and serious, and is a rigorous approach. 

Great, thank you, Andrea, for sharing your experience with us and explaining your approach to us. Of course, we hope we did something useful - but we've certainly done it - for all those approaching this world and are willing to do it seriously. Thanks again, see you soon!

ANDREA

Thanks to you and thanks to everyone. Goodbye and see you next time!

DEBORA

Before saying goodbye, one last piece of service information for all those interested who would like to further explore the concepts we have explored in this conversation: you can order Andrea Unger's book on the Unger Method on the Unger Academy website. You'll receive it at your doorstep, it's free, and you only need to cover the shipping costs. So happy reading everyone.

 

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We’ll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.

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Andrea Unger

Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.

I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems. 

In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.

Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.

Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.