Dear EURCHF: It’s Not Me, It’s You

July 28, 2021

I’m going to try to remain calm.

Anger is bad.

Last week, I came across another Expert telling us that the only way to trade is to be vastly diversified and that every instrument is exactly the same.

Every instrument has exactly the same potential.

Okay, I’m angry again.

What did you just say?!?

Every instrument has the same potential?

So Tesla (TSLA) is the same as, say, Baker Hughes (BKR)? Hmm, let’s see.

TSLA:

BKR:

My eyes may not be perfect but I think that’s a +17,000% gain on TSLA and a -66% loss on BKR in the past thirteen years.

We could trade BKR for another century and it would never reach the heights of TSLA. But we’re supposed to believe all instruments are the same?

Oh, but that’s stocks. That isn’t fair.

Okay, so, NQ (E-mini Nasdaq) is the same as C (Cotton) ?

Here’s NQ:

Here’s C:

Not. Even. Close, Bud.

But that’s Futures. That isn’t fair. [Actually it is fair because the Experts mostly talk about Futures when they say all instruments are the same.]

So, what about Forex? Should I put my systems on every currency pair I can find? Diversification is the way to go, right?

Here’s the Master Trend BB Breakout System on the GBPJPY from 2008-2021:

Let’s compare that to the EURCHF. Why EURCHF? Because I just read about how great this pair is.

Oops. Since 2008, the GBPJPY produced over 2,000x more profit with less drawdown.

Seriously? We should trade everything the same? Everything has the same potential?

Now, this assumes we actually want to make money by catching trends, which has only worked for multiple centuries.

Perhaps, it isn’t fair to compare EURCHF and GBPJPY on a trend system. Perhaps a pair like EURCHF would work with something else.

We’ll take a look at that in the next Newsletter.

Talk to you soon.

We’ll take a look at that in the next Newsletter.

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