Developer's Interview with Lincoln Fiske
From the December 2002/January 2003 Issue of Futures Truth Magazine

NAME: Lincoln Fiske
BACKGROUND: B.A. in Education, M.A. in English Education, Commodities experience - 15 years, Secondary Teacher - 20 years
CURRENT POSITION: TradingVisions System Developer; High School English Teacher
FAVORITE BOOK ON TRADING: Reminiscences of a Stock Operator by Edwin LeFevre, Computer Analysis of the Futures Market by LeBeau and Lucas.

To what do you attribute EarlyBird’s performance?

Versatility, volatility, adaptability, and simplicity. EarlyBird is composed of two separate systems, a trend and countertrend module. Given sufficient volatility and intraday directionality, these modules together are able to take advantage of the types of markets we’ve seen the last few years in the stock index futures, particularly the S&P. EarlyBird II adds a third system which exploits an additional market pattern. These three integrated components allow EarlyBird to adapt to a variety of market conditions. Also, the systems are discriminating about trading conditions: when volatility subsides, the systems generally do not trade. Lastly, a set of price-adaptive stops protects against losses and locks in profits. The EarlyBird systems rely strictly on price action and time, not indicators.

Is there anything that you would tell to those new to trading commodities or stocks that you wish someone had told you when you were getting started?

Yes, that it may take years to develop a sense of the markets, and that having years under the belt doesn’t guarantee anything. Also, that the markets don’t care whether a trade or a trader is winning or losing; the market isn’t going to be a friend: it is a dispassionate, evolving teacher. Thirdly, that “good” data is hard to come by, that it varies markedly from source to source, that it’s crucial to testing a system, and that just as you can curve-fit to a specific time-period, you can curve-fit to a specific vendor’s data. I had tested one of my first systems on about three months of 1-minute live-feed data (not nearly a long enough period, I now know), and thought I was ready to put money behind it. Fortunately, just before I started trading it, I ran the system on data from another vendor. Even though it was exactly the same period, the system blew-up. I’d curve-fitted it so closely to my data that it didn’t survive slightly different data, never mind a different time-period. A good system has to test well over data from different vendors. Lastly that it’s very important to have a systematic approach to the markets, or else your emotions become so governing that you don’t make clear-headed decisions. The worst time to be learning about the market’s twists is in the middle of a trade. A systematic approach entails having enough hindsight (observing, testing, backtesting) that you are able to generate useful foresight. A system puts experience into rules, and then rules your experience: once you trust the system, you need the discipline to stick with it.

What do you think the hot markets and stocks are this year?

Primarily I focus on the S&P and e-mini because they are reliably liquid and represent broad sentiment Because an index represents so many players and forces, you’re more likely to see purely technical moves rather than randomness at work, and this is where most systems seek their advantage, in exploiting technical patterns.

You can see the rest of this interview in the December 2002/January 2003 backissue of Futures Truth Magazine. Order your copy today!