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In this interview, Robert Carver, an expert in systematic trading, shares his approach to trading futures using automated systems. Carver, who has worked with top hedge funds like AHL and now trades independently, emphasizes the importance of removing emotions from trading by relying on systems that make decisions based on data, not gut feelings. His unique perspective comes from decades of experience in trading, economic research, and writing books on the subject, giving him deep insights into what works and what doesn’t in the world of trading.
In this blog post, readers will learn how Robert Carver uses a systematic approach to trading, focusing on automated strategies that take emotion out of the equation. Carver dives into how his systems predict price movements without relying on traditional technical analysis tools, such as chart patterns or Fibonacci levels. He also discusses the benefits of using simple yet effective trading rules and shares insights into how anyone can begin trading systematically—whether they’re a beginner or seasoned trader—without the need for complex algorithms.
Robert Carver Playbook & Strategy: How He Actually Trades
What is Systematic Trading?
Systematic trading is all about using rules and automation to make trading decisions, removing emotions like fear or greed from the process. Robert Carver, in particular, uses a combination of price data, basic indicators, and robust risk management techniques. The idea is to let the system run automatically, following predefined rules that Carver has designed.
Here’s what makes systematic trading effective:
- Rules-based decisions: No guessing or gut feelings.
- Automation: Less time spent manually managing trades.
- Data-driven: Decisions based on historical price data, not on opinions or predictions.
Key Rules of Robert Carver’s Systematic Trading
- Use price data, not charts or patterns: Carver doesn’t believe in using traditional chart patterns like Fibonacci levels. He focuses on price movements, specifically the range of prices over a set period, to dictate his trading decisions.
- Keep it simple: His systems are built on simple, easy-to-understand rules that anyone can apply. This simplicity reduces the risk of overfitting or introducing unnecessary complexity.
- Don’t over-analyze: The key is to stick to the plan, avoid tweaking the system, and resist the temptation to adjust your strategy based on short-term market movements.
The Breakout System: How Carver Finds Opportunities
Robert Carver often uses a breakout strategy where he identifies potential price trends based on historical price data. This method focuses on price ranges and how the current price compares to historical highs and lows.
Here’s how it works in plain terms:
- Look at the past price range: Measure the highest and lowest prices over a defined period.
- Identify breakout points: If the current price is near the top of the range, it’s time to go long. If it’s near the bottom, it’s time to go short.
- No action at the midpoint: If the price is somewhere in the middle, it’s a signal to do nothing.
Key Rules for Using the Breakout System
- Set your timeframe: Decide on how many days you want to analyze (the “N” value in Carver’s strategy). This will determine whether you’re focusing on longer or shorter trends.
- Track high and low: Find the highest and lowest prices within that timeframe.
- Go long at the top, short at the bottom: If the current price is near the highest price in your set range, take a long position. If it’s near the lowest, go short.
- Stay out of the middle: If the price is in the middle of the range, avoid taking a position.
Trading Indicators: Carver’s Approach to Simplicity
While Carver does use indicators, he doesn’t rely on complex or overfitted ones. Instead, he opts for basic, well-understood tools like moving averages. This makes his strategy more robust, as it’s not based on fluctuating or random market noise.
The goal here is to keep your tools simple, effective, and adaptable.
Key Rules for Using Indicators
- Use moving averages: Carver uses exponential moving average crossovers to spot trends. A crossover between two moving averages can signal the start of a new trend.
- Avoid overcomplicating: Stick to basic, well-known indicators like moving averages. Don’t introduce too many indicators, as this can overcomplicate your system.
- Monitor multiple systems: Carver trades using multiple simple systems (like breakouts, moving averages, etc.) to benefit from diversification.
Risk Management: How Carver Protects His Capital
Risk management is one of the most important aspects of Robert Carver’s strategy. He uses a system that ensures he’s never too exposed to any one market, and he carefully controls the amount of risk he takes with each position.
For Carver, knowing how much risk you’re taking and understanding potential losses is critical to long-term success.
Key Rules for Risk Management
- Limit your risk: Carver’s strategy involves defining the maximum loss a strategy can sustain before it’s no longer viable. By knowing this upfront, he can stay confident even when a trade is in drawdown.
- Diversify across markets: Instead of focusing on just a few markets, Carver trades across a wide variety of instruments. This spreads out risk and increases the chances of overall success.
- Position sizing: Adjust your position size based on the level of risk in a given market. If you’re trading a volatile asset, take a smaller position to limit potential losses.
Automation and Efficiency: Why Carver Relies on Code
One of the main reasons Robert Carver can trade so effectively is his use of automation. His systems are fully automated, which means they run without constant human intervention. This frees up Carver to focus on research, tweaking systems when necessary, and ensuring that everything is running smoothly.
Automation is a huge advantage because it removes human error and emotions from the equation.
Key Rules for Automation
- Automate as much as possible: By automating the trading process, Carver ensures that his systems run smoothly without requiring constant oversight.
- Don’t manually adjust positions: Once the system is set up, resist the urge to manually intervene in trades. The system is designed to make decisions without emotional bias.
- Trust your system: Carver doesn’t constantly tweak his system. Once it’s working, he trusts it to continue performing without interference.
Why Systematic Trading Works for Carver
Robert Carver believes that systematic trading is more reliable than discretionary trading. By following rules and using automation, he removes emotions from the process and allows the system to make decisions based purely on data. This is why Carver has found success with his approach, even when facing challenging market conditions.
If you’re trading for profit, Carver argues, systematic trading is the way to go.
Key Takeaways for Systematic Traders
- Discretionary trading is risky: The temptation to change your strategy during drawdowns can lead to poor decision-making. Systematic trading removes this uncertainty.
- The importance of patience: Systematic trading requires patience. Results come over time, not instantly, and you need to trust your system through periods of loss.
- Stay objective: Let the data and the system make the decisions. Don’t get emotional about your trades.
Building a Fully Automated System for Stress-Free Trading
Robert Carver emphasizes the power of automation in trading, allowing traders to remove emotions and distractions from the decision-making process. He believes that by relying on fully automated systems, you can streamline your trading and focus on the research and development of your strategies rather than the daily grind of manual execution. Automation, according to Carver, is key to scaling up without burning out. This approach removes the mental fatigue associated with constantly monitoring the markets and making real-time decisions.
For Carver, automation isn’t just about convenience—it’s about consistency and precision. His systems are built on simple, rules-based strategies that execute trades automatically based on clear criteria. By doing so, he eliminates human error, such as second-guessing or reacting to short-term market fluctuations. This allows Carver to trade across multiple instruments without being glued to a screen. The beauty of his approach lies in the simplicity and efficiency of the system—once it’s set up, it works independently, ensuring that his strategies remain robust and disciplined over time.
Breakout Strategy: How to Use Price Ranges for Entry and Exit
Robert Carver’s breakout strategy is based on the idea that price movement within a defined range can signal when a market is ready to make a move. Instead of relying on complex chart patterns or indicators, Carver focuses on a simple rule: track the highest and lowest prices over a set period and base your trading decisions on these boundaries. If the current price is near the top of this range, it’s a signal to go long; if it’s near the bottom, a short position is in play. Carver’s strategy is designed to take advantage of market momentum, entering positions when the price breaks out of its established range.
This approach is both intuitive and systematic. Carver’s method eliminates subjective decision-making by using purely data-driven criteria. He doesn’t need to analyze charts, patterns, or news events—he just needs to track the price and make decisions based on predefined rules. The simplicity of this breakout strategy makes it accessible to any trader, regardless of experience level, and it can be applied to any market with reliable price data. Carver’s breakout system is a great example of how a disciplined, rules-based approach can lead to profitable trading without the need for constant market monitoring.
Simplify Your Trading: Avoid Overcomplicating with Unnecessary Indicators
Robert Carver advocates for a minimalist approach to trading indicators. While many traders overcomplicate their strategies with dozens of technical tools, Carver believes that keeping things simple leads to better results. He suggests that relying on a few key indicators—such as moving averages and breakout levels—is far more effective than cluttering your charts with every tool available. By avoiding the temptation to use too many indicators, Carver focuses on what really matters: price action and risk management. He emphasizes that simple systems are not only more reliable but also easier to understand, making them more adaptable to changing market conditions.
For Carver, the key to success is not in finding the perfect indicator but in sticking to a system that is consistent and easy to follow. He highlights that many complex indicators, like Fibonacci retracements or Bollinger Bands, add little value and can actually increase the likelihood of overfitting a strategy. Instead, Carver uses basic, straightforward methods that anyone can apply without feeling overwhelmed. This no-nonsense approach makes his strategies more robust, as they don’t rely on the fleeting success of complex systems that can quickly become irrelevant in fast-moving markets. By simplifying his trading tools, Carver focuses on maintaining a strategy that is both effective and efficient.
Managing Risk: Position Sizing and Diversification Across Markets
Robert Carver places a strong emphasis on managing risk through strategic position sizing and diversification. He believes that controlling risk is just as important as identifying opportunities, if not more so. Carver’s approach involves spreading his trades across multiple markets to reduce the potential impact of a loss in any single position. This diversification not only helps balance out the risks but also maximizes his chances of capturing profitable trends across different asset classes. By trading a wide range of markets, from futures to bonds to currencies, Carver ensures that his portfolio is not overly dependent on one particular instrument or sector.
In addition to diversification, Carver is disciplined about position sizing. He adjusts the size of each trade based on the volatility and risk profile of the asset being traded. This means that more volatile markets will have smaller positions to mitigate potential losses, while less volatile markets may allow for larger positions. Carver’s ability to balance risk and reward through careful position sizing allows him to remain confident during periods of drawdown, knowing that his portfolio is built to withstand fluctuations. His risk management strategy is grounded in simplicity and logic, ensuring that each trade is aligned with his overall portfolio goals.
Trusting Your System: The Power of Patience and Rule-Based Decisions
Robert Carver’s trading philosophy centers around one key principle: trust your system and avoid second-guessing. He stresses the importance of sticking to the rules that have been designed for your strategy, no matter what the market is doing in the short term. Carver’s system is built on clear, data-driven decisions, and he believes that the most successful traders are those who can resist the urge to constantly tweak their strategies during periods of loss. He highlights that emotional reactions to drawdowns can lead to poor decision-making, which is why he relies on automation to eliminate those impulses. By trusting his rules and allowing the system to execute trades without interference, Carver has been able to maintain a consistent approach to trading over the years.
This level of trust in a system also requires patience. Carver notes that trading systematically isn’t about instant gratification or quick wins; it’s about understanding that success comes over time through disciplined execution. The power of patience, according to Carver, lies in the ability to allow the system to do its work, even when the market isn’t favorable. He points out that the real key to long-term profitability is resisting the temptation to adjust strategies based on short-term results. Carver’s approach is a perfect example of how a well-designed, rule-based system can lead to steady, disciplined trading without the emotional rollercoaster that often accompanies discretionary trading.
Robert Carver’s approach to trading is a powerful example of how systematic strategies can lead to long-term success. His focus on automation, simplicity, and risk management allows him to trade efficiently across multiple markets without getting bogged down by emotional decisions or complex indicators. Carver’s breakout strategy, based purely on price ranges, is a testament to how simple rules can be highly effective when applied consistently. By diversifying across a wide range of markets and adjusting position sizes based on volatility, he ensures that his risk is well-managed, while still maximizing the potential for profit.
One of the most important lessons Carver imparts is the value of patience and trusting your system. His use of automation removes the emotional rollercoaster that many traders face, allowing him to stick to his rules without second-guessing his decisions. Carver’s ability to balance simplicity with effective risk management and automation offers a blueprint that any trader, whether experienced or new, can implement for consistent results. By following his key principles of automation, risk diversification, and trusting in your system, traders can achieve greater discipline, efficiency, and ultimately, profitability in their trading endeavors.
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