Trader Xiuxan Du, known as Steven Dux, discussed data-driven trading strategies and tips for succeeding in a competitive market in an interview with Benzinga.
'I Wanted To Do Something Creative'
Dux was born in China and moved to America for foreign exchange studies.
At first, Dux said he had a hard time assimilating: “it took me about two to three years to communicate with people.”
To support his passion for engineering and nanotechnology, Dux worked odd jobs and found it tough to earn money.
“I wanted to do something creative with technology or nanobots,” he said.
Dux then entered into the trading space to acquire project capital and a better lifestyle.
An Engineer's Approach To Trading
Du approached trading in a similar fashion to engineering.
“I looked at the stock market as a bunch of data and a couple of scenarios in which the stock can go up and down,” he told Benzinga.
Initially, he was interested in ETFs: they seemed big and tough to manipulate.
"I wouldn’t say they are fundamentally driven," he said.
"I was trying to figure out the range of bouncing back and forth. What’s the maximum range of spiking? What’s the average range of pulling back, so I can dip-buy or short back and forth? That’s where I started."
To get a basic understanding of technicals and market workings, Dux said he sought information from groups, chat rooms and online learning tools.
“I didn’t just follow one person," he said. "I went to Investor Underground, Tim Sykes, all types of groups, and I tried to test their strategy before I [invested] with bigger money.”
Dux attributes most of his success to studying and analyzing the market himself.
"The beginner level comes from Tim Sykes. The rest of it was inventing and modifying strategies."
Patterns To Watch For
Dux doesn’t gamble, he said — he takes calculated risks.
"I already [have] the data set. I know exactly how much I’m going to win."
The trader runs aggregated data sets through scenarios and said he asks questions like "what’s the winning percentage if I trade this pattern?"
Dux said he trades as robotically as possible to ensure that he can obtain the maximum reward.
Building Strategies
“If you’re just starting out in the market, you need to track. You need to manage how you trade stocks," Dux said.
He starts by segregating different market caps.
“You need to realize that different caps [behave] differently. The Level II’s will be different. People are reacting to the stock differently, [and] volume will be different.”
Dux only tracks statistics for market caps up to $200 million, he said. Once the caps are segregated, he looks for repeating patterns and similarities between charts.
Advice For Newbies
Education is key, Dux said. He recommends observing the market and learning from others.
“I ran into a lot of [educators] that give the wrong patterns and tell their subscribers to buy, then they sell, before they actually tell them to sell,” he said.
Preying on unsuspecting subscribers is a widespread practice, and it's highly successful in terms of stock manipulation, Dux said.
It's a reason why he began teaching trading on the side.
“Before you get into this market, you need to find people that are verified or legitimate, because people aren’t verified and they can post statements that are completely fake.”
Find Steven Dux on his YouTube channel and his website, stevenduxi.com.
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Screenshot from YouTube.
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