18 Aug Navigating Markets Over Time
True Greatness: Navigating Markets Over Time
Aug. 18, 2023
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Comedian Steve Martin once said that greatness is nothing special.
Having a great set one random night is going to happen by accident if you’re on stage enough.
It’s no big deal.
What’s really amazing, he said, was being good almost all the time.
Being consistent over many years is truly the rare, extraordinary thing.
And if he were a trader, Steve Martin would say one highly-profitable year when the market conditions are randomly perfect for a specific system is not that admirable.
Having multiple profitable years over many different markets–weird and otherwise–is the amazing thing.
This week we looked at a simple system that thrived in odd bullishness but failed miserably in 2022’s bearishness.
But, when we added a moving average filter to only trade in bullish conditions, our strategy did well in ’22 and ’23.
Was that just a two-off, though?
Let’s take a look.
Keeping the system exactly the same (15M chart, buy at 11 am ET, exit at day’s end, $2k stop), let’s go back to 2007.
Doing that will take us through the Armageddon of 2008, the 2020 pandemic, and many other periods.
And here’s the Equity Curve trading 1 contract from 2007-2023 (trading costs included):
Here are the hypothetical Annual Returns:
And here is the Report:
So, what are the takeaways?
Shockingly, this simple, bullishly-biased system holds up.
It does well in bullish times and doesn’t do badly at all during bearish times. The losing years are completely digestible (and could possibly be eliminated if used in a bigger portfolio).
It’s also capable of having massive winning years when the moment is right.
And it’s doing incredibly well in current market conditions. If things keep going like they’ve been going, how much hypothetical money could this system make in the next six or twelve months?
This system went through many wild and crazy markets and remained good.
And good, over time, is great.
Talk to you soon.
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.