Did Our Fix Fix It?

Did Our Fix Fix It?

Feb. 16, 2024

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This week we’re trying to figure out if we can use a system that reportedly made 800% for its author.

Using its original form from the book, we definitely saw 800% possibility in the in-sample period:

But that strategy then took a sudden turn downward after the book was printed:

Putting those together looks like this:

Profitable, but not great.

However, in our last Newsletter, we made some changes with the in-sample data from 1997-2017. And, going Long only with a target and stop produced this hypothetical Curve:

That looks way more stable. But I optimized.

So that means I probably over-optimized.

Did I?

Here’s the hypothetical Curve from 2017-24:

To the left of the red line are my optimized in-sample results. To the right are what might have happened had we traded it live.

On one hand, the Curve is still going up. On the other hand, it took a dip right after moving to out-of-sample and doesn’t produce that much money recently.

It’s definitely not an 800% system using only 1 hypothetical contract.

It’s a hypothetically winning system, though.

Takeaways?

One, we always have to trust-but-verify. Even well-meaning, good ideas can turn sour.

Two, optimizing doesn’t always mean over-optimizing.

Three, this system, like the author says, probably still needs a little more work.

Talk to you soon.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.