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DollarsAndSense Book Review: The Systematic Trader By Collin Seow

A good book for those who are new to trading and want to get an insight peek into how to trade the financial markets.

Since I began my investment journey back in 2009, the local investment landscape has undergone significant transformation. Today, we are fortunate to have a wide variety of personal finance events; the emergence of robo-advisory platforms simplifying investing; the proliferation of low-cost discount brokers lowering the barrier to trade; the adoption of alternative investment assets like cryptocurrencies and non-fungible tokens (NFTs). Amidst this ever-evolving environment, one name that has remained a steadfast presence in the local investment community is Collin Seow.

My first encounter with Collin occurred in 2011 at an investment talk organised by the investment club at the Singapore Institute of Management (SIM). For someone who was still finding his feet, Collin’s passionate sharing about his life’s journey and how he overcame a debt of $250,000 through his trading strategies captivated me.

I was then excited to find out that Collin had encapsulated all his knowledge, including the trading strategies that he uses, in his book The Systematic Trader – How I Turned A $250,000 Debt into Profits Through Stock Trading, which is now in its second edition.

Read Also: How Singapore Trader Collin Seow Turned A Debt Of Almost $250,000 Into A Lifelong Advantage

Who Is The Author, Collin Seow?

But before I go into the book, you might want to know more about the author – Collin Seow.

As mentioned, Collin, who was a former top Remisier with PhillipCapital, is a familiar name in the local investment community. Among his many accolades, he is a qualified Chartered Portfolio Manager (CPM) and holds a Certified Financial Technician (CFTe) qualification.

Collin is not only an acclaimed author of the best-selling book, “The Systematic Trader”, he also conducts an investment course – The Systematic Trader Programme (SMT), which is one of the most highly rated investment courses as listed on Seedly. With more than a decade of experience in the field and having mentored over 5,800 students, this sets him apart from many contemporaries.

What Can You Expect From The Systematic Trader Book?

The book is split into three parts, and I will touch briefly on what you can expect in each of them.

Part 1: Fighting The Outer War

The book gets straight into the meat, giving readers the trading strategies, that Collin uses as a successful trader.

He begins by introducing his proprietary trading system – The TradersGPS, which is a paid subscription tool. The system gives simple call to action (i.e., buy or sell) signals indicated by the arrows on the chart, which are used in combination with the other indicators such as the cumulation of momentum (COM) and trend impulse factor (TIF). The idea behind this trend-following strategy is to be mechanical with your trading process and remove any emotions that may affect your trading decisions.

In the following chapters, Collin discusses other short-term trading strategies that can be used without any paid subscription tools or indicators. For example, he shared about a simple swing trading strategy based on moving averages and the commodity channel index (CCI) indicator. For more details on the setup, you can get a copy of his book.

If you are unable to monitor the market daily, then you might prefer some of the position trading strategies like the cross-over and K39, also known as the Stochastic 39 strategies. For these trades, Collin uses the weekly charts, which can take two weeks or longer to play out.

While these strategies should be plenty for any beginner to get started, more experienced traders can look forward to the chapter on NR7 (narrow range) and NR4 + ID short-term strategies. These short-term trading strategies allow you to trade the market when there is a retracement, breakout, or volatility, thus allowing you to capture more explosive moves.

Though no trading strategy can guarantee a 100% win rate, Collin mentions that a strategy is good if it gives you a probability of win of more than 0.5 and a payoff ratio of more than 1.

To find out more about each of these strategies, including the trade setups and profit-taking techniques, be sure to get a copy of The Systematic Trader.

Part 2: Fighting The Inner War

Now that you have an arsenal of trading strategies, the second part of the book delves into the nitty gritty of being a successful trader, which is your psychology and money management.

In the three dedicated chapters, Collin explains the importance of position sizing and how you could accumulate or build up your position in a stock over time for long-term position trades. Essentially, you want to build or scale in a position when you are right so that you maximise your profits and limit your losses if you’re wrong initially. Therefore, it is important to also consider the risk that you’re willing to take on each trade. For example, you can limit your risk by having a fixed dollar amount, a percentage, or based on the Average True Range (ATR). The concepts are explained in more detail in The Systematic Trader.

The next part of the chapter talks about how to create your trading journal. It is easy to overlook the importance or need for recording each of our trades, but as someone who has traded (albeit not as successfully as Collin) for many years, I can attest to its importance and value.

As Collin shares in a rather simple and easy-to-understand diagram, the trading journal acts as a feedback loop, helping us understand what is wrong or right with our trades so that we can make the necessary improvements or adjustments. There is also an example shared of the exact parameters used by Collin to record his trades, which can be useful to any trader to calculate their payoff ratio.

Part 3: Bonus Chapters

The last part of the book is titled bonus chapters, which are newly added from the first edition of the book.

It includes chapters by Royston Tan on option selling and understanding cryptocurrency by Chris Long. Both chapters give an introductory account of the two different but popular asset classes that you can consider taking a closer look at once you’re comfortable with the stock strategies shared by Collin.

Who Should Read The Systematic Trader?

The Systematic Trader is a good primer for those seeking to become more profitable traders. The book, which is 256 pages long, is written in a simple, easy-to-understand and visually appealing manner.

Those who are new to trading or even experienced traders who are looking for more trading strategies can benefit from Collin’s generous sharing of both short-term and long-term trading strategies.

Additionally, the book also covers an important aspect of trading, which is risk management and trading psychology. In my opinion, this is the more valuable part of the book that new traders could take away from, though many may neglect it over trading strategies.

While the book does not promise quick riches, it gives readers some light on how to get started and do the right things to become a consistent and profitable trader. If at all, who better to follow than someone who has been in the trenches and traded his way out of the hole?

Get your copy of The Systematic Trader.

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