I mostly enjoy reading posts by Steve Pavlina. His recent article, Setting Your Primary Focus, says to resolve to focus on one thing in the coming year, rather than making any resolutions. Read the article for his explanation.

I have decided that health is my one thing. I tend to think about money by default, so that's taken care of.

The truth is, Sharky has become a chubby bunny.

Steve says:

For example, if you’re 50 pounds overweight, that’s a serious problem that will negatively affect many parts of your life, including your health, your career, and your relationships.

I'm not quite 50 pounds overweight, but by the same token nobody wants to see my belly. Although, now I think about it, nobody really wanted to see it before :-)

So it's to the gym for me, as soon as I move cities, as soon as I get a job, as soon as v1.0 is out. Until then, I'm trying to walk 10,000 steps per day.

And, as Steve Pavlina said in a different post, it's all about turning up. You go to the gym, and you're going to do a workout. The more often you turn up, the fitter you'll become. It's the turning up that's the hard part.

Because I had said that prices were going up when v1.0 is released, and now that's not true, I thought I should give a gift of some kind to those that have signed up pre-v1.0.

That gift is free subscriptions to the Alerts functionality until 30-June-07 23:59:59 (GMT).

This has been done for pre-existing customers. And if you sign up before v1.0 is out, you can get the same deal. But only if you sign up for one of the Yearly Subscriptions or Yearly Packs.

I expect the release date will be around January 4 or 5.

With the impending release of v1.0 of Thinking Stuff (in about 2 weeks), it got me thinking about pricing of the subscriptions.

I've said that prices will go up when v1.0 is out there, so I had to think of what the prices will be.

So I'm looking at the current prices, and thinking of the possibilities, and the truth is I think I have the prices right at the moment.

The complete pack of auto-trading, alerts, and backtesting, costs US$600. That's $50 per month. If you think about it, you probably already spend $50 per month on things you don't need, aren't good for you, or are of no use.

For example, one can of softdrink per day, at today's prices, would come to around $50 per month. There are many other examples I can think of, but I'll spare you.

Needless to say, some software which takes the fear and greed and need to stare at charts all day away from trading, maybe it's just me, but that seems to be worth more than a can of softdrink.

So I'm a little surprised by the survey results (see bottom left of page). "Waiting for v1.0 to be released" (God bless you) is in a tie for first place with "It's too expensive".

It's too expensive?? With all of the features, how much do you think software like this is going to cost? I'm all for opening up the wonders of automated trading to as many people as possible, but I'm not a charity.

I'm surprisingly assertive though, even if it means refusing money. Recently I have:

• Knocked back a request for my phone number, even though the person would not subscribe to my software without it. Because my customers are spread throughout the world, people could call me at anytime of the day or night if I gave my phone number out. With email I can dictate when I work. That prompted me to update my Contact Us page with the available support methods, which include, I might add, live chat at a pre-arranged time, and Remote Desktop where I set up TS on your machine while you watch.
• Told someone that if they are so worried about my software being spyware (huh?), then they should just not use it. That prompted me to update my Privacy Policy to explicitly state the kind of information I do keep.
• Knocked back an offer of money in exchange for setting up a sub-account so someone could use the Oanda API for free. Even though the guy wrote back 2 minutes later to say, essentially "ok, well, what if I asked you exactly the same question one more time? Would you change your mind 2 minutes after I asked the first time?"
• Changed the text under the "Pricing Theory" on the Purchase page from "If you think the prices are too high, please let us know" to "If you think the prices are too high, you've got to be kidding."

I dunno - I guess the older you get, the less time you have for bullshit. And at 29, I am getting on.

Don't buy a diamond engagement ring. Get one made from your own bone instead.

Is the tradition of buying a diamond ring only 70-odd years old??

It's suddenly dawned on me that Christmas is just 2 weeks away.

I want to release v1.0 on Christmas Day.

I will now stop playing around with the historical data and backtesting, and get back to coding.

The Gain Capital data looks more messed up than I originally thought. Ticks like -0.0190, and 1965.0001 are obviously wrong and easy to spot. But for others it's a judgement call. News events cause spikes just like bad ticks do, and it's important not to delete news spikes from existence.

Anyway, it takes a while, and I'll have to get back to it after finishing the freaking software. I've decided to use only the data from 1st Jan 2004 onwards. This is where the Oanda data starts from as well, and I think it's far enough back.

p.s. Did I mention it's not so easy to find a profitable trading system?

Oh, one more thing. This whole software venture started when I couldn't get the trading system I had bought to work. I just kept losing money. So I decided to write some backtesting software to see if it was me or the rules that weren't working.

Going through the literature I was given, turns out there are about 60 variations on the trading system. I've punched in to my software only the 12 long-term ones, and preliminary testing has it that the rules suck.

But the trading system has a few catch-alls for any such problems. Firstly, you're not supposed to trade near support and resistance lines, and my software can't determine those. No trading in congestion, and my software can't determine that (anybody come up with a way to determine "congestion"?).

My favourite is "You need to get a feeling for the market, and learn when the rules will work, and when they won't."

Learn when the rules will work? Probably as simple as learning when the price is "obviously" going up.

With all the historical price data in place, and with some wonderful backtesting software, it should be pretty easy to come up with some winning strategies.

Actually it's not. And with good reason. Once you start backtesting, you should hopefully find that it's quite difficult to find a trading system that's profitable. Or at least decently profitable.

That's if your backtesting software works correctly.

And if you think about it, doesn't that fit with reality?

We don't have to make things incredibly complex to make money in forex trading, but then again it can't be so simple either. If everyone could make money buying when the close is above a simple moving average, and selling when it's below, well, everyone would be.

Then there is the fact that your entry rules are not the only thing you need to worry about when experimenting.

Your entry rules interplay with your stop loss management rules. Changing one effects the other. A trade is made up of both a buy and a sell.

Does your system lose a lot of money because your entry rules are saying to buy at the top of peaks, or because your stop loss is set too close to the price action? You'd really have to chart where your entries are, and how your stop loss is moved compared to the price. (Yep, TS can do this).

Otherwise you might throw away a trading system that was consistently buying at absolute troughs, but was never given enough wiggle room.

Then there's the differences in personalities between the different currencies (e.g. EURUSD vs USDCAD). And the differences in personalities between the different intervals of the same currency (e.g. 5-Minute EURUSD vs Daily EURUSD). That is, you can't just copy your trading system to a different currency or interval and expect it's going to work the same.

You'd need to alter the entry rules or stop loss management rules. And as I said before, when you change one, you'll probably have to change the other.

You also can't copy a trading system that worked for stocks and expect it to do well with currency. It might, but it probably won't.

So even with (a) a lot of historical price data; and (b) a magnificent piece of software :-) it's still not a walk in the park to riches. But those with (a) and (b) have leapfrogged those without in terms of probability of success, as long as those people with both (a) and (b) continue to think for themselves.

My software is called "Thinking Stuff", but it will only do exactly what you tell it.

I guess my best piece of advice would be to diversify. Not diversify like financial advisors want you to diversify - i.e. buy some stocks, some property, some fixed-interest, etc. Leave that for your retirement fund. No, I mean diversify in terms of trading systems. Don't get stuck to one. Looking around various trading blogs you can find multiple strategies, like Trader Mike and NR7, Chairman Maoxian and Trading For Dummies, I understand Trader-X has one, and there'll be others if you look. You'll have to experiment and adjust, but spend some time doing that and you'll increase your probability of success that much more.

There's also a myriad of e-books that you can buy offering "great" trading systems, but I've just about given up on them. If anyone finds one offering a purely mechanical trading system, please let me know.

Oh, and then there's the Real-life Examples page that I have, and that I will be updating once I've experimented. Who knows, maybe "Sharky's %b" systems will become as well-known as the Chairman's dummy style?

Over the last few days I've been loading the many text files of historical price data into Thinking Stuff.

All these files are freely available on the web. And here are the instructions on where to get them.

Oanda gave me tick data for 5 currencies going back to January 2004. And Gain Capital gave me tick data for 16 currencies, most of which go back to 2001.

Having loaded each and every file into my database, I can now report how much hard-drive space that takes.

50 Gigabytes.

That's just for the tick data. Now I have to create the interval data. Creating each and every interval for each and every currency will, I dare say, double the amount of hard-drive space required.

But once it's all done, some serious backtesting can begin.

My path to success has the following steps:

1. Buy new external hard-drive.
2. Load all the Oanda and Gain Capital historical price data text files.
3. Create the interval data.
4. Experiment and find 10 or so (seemingly) profitable trading systems.
5. Find a "churn" system, that trades really often and is somewhat profitable. This one is to get the monthly Oanda API fee waived.
6. Yada yada yada.
7. Have a lot of money.

So you see, having a new external hard-drive is the first step to success.

The reason I say "new" external hard-drive, is because (as you might remember) a cat knocked over my old one and now it sounds like how it would if you ran over a roller skate with a lawn mower. (Do people still remember roller skates?)

You're probably aware that the Oanda API costs $600 initially, and then after the first 2 months it costs $600 per month. But, it's discounted $50 for every $1m of currency you buy, so if you purchase $12m worth of currency in a month then it's free. I want to create a trading system which pretty much just buys and sells and buys and sells so that even with a couple of hundred dollars in their account, people can get the monthly fee waived.

I figure the high price of the Oanda API is a barrier to people buying my software, so if I can find such a "churn" system then it's good for everybody. Including Oanda who rake in the spread.

At first I wrote down "find a churn system that doesn't lose too much". Then it became "find a churn system that breaks even". And thinking about it a little more, I decided on "find a churn system that is also profitable."

The words we use are important, aren't they.

Oh, and don't forget this post of mine (but the theory taken from the Oanda forums) on how to pay a maximum of $400 as the monthly fee, not $600.

Oh, and don't forget that there is no getting around the initial $600 payment.

Success begins with an external hard-drive. Don't forget those words. That'll become the phrase that people remember me by, just like "I have a dream" or "Ich bin ein Berliner" or "Do the Bart-man."