Never Say Never

Feb. 6, 2023

A wise man was once asked, “What’s the secret to a happy and prosperous life?”

The wise man said, “Strong beliefs loosely held.”

And I agree.

Holding on to something when the evidence clearly shows otherwise can lead to a lot of trouble. Sometimes it can lead to disaster.

But it’s also not beneficial to be lukewarm.

Lukewarm doesn’t change bad habits or make the world better. Strong passions do.

So I believe in things very strongly until very good evidence shows otherwise.

That said, I’m not interested in trading trend following strategies on instruments that don’t trend. The evidence is clear on that.

But there also might be room for other instruments to sneak in there in some situations. And if they do, they deserve consideration.

It’s not wise to say never in trading.

And here’s a possible example of that.

In Forex, I currently only trade the GBPJPY. I use multiple accounts and trade only the GBPJPY in those accounts.

But looking at the Master Trend robot, as I often do, there is one group of settings that seem to work on the EURJPY.

(Gasp.)

But they’re weird.

This system enters Long on a 15-minute chart when RSI closes into Overbought and goes Short when RSI closes into Oversold, and it only takes trades before 12 pm ET. Pretty normal.

But the Long target is only 75 pips while the Short target is 200 pips. The stop is only 50 pips and it moves to break-even after 75 pips. The Long time exit is 940 bars while the Short is 570 bars.

Just about all of those settings completely violate every smart backtesting guideline.

Plus, it trades the EURJPY, which is also not smart. Right?

How did this EJPY chart do in 2022?

Trading 1 lot each time it hypothetically made over $2k when the stock market was down big.

How has it done since 2003?

It’s produced a lot of hypothetical profit with very little hypothetical drawdown:

So, am I making a mistake? My strong belief would say no. The strong belief says, “ONLY GJPY!”

It’s a good thing it’s loosely held.

In our next Newsletter, we’ll discuss this EJPY chart further.

Talk to you soon.

Join the free Newsletter list here .

Get Robot information HERE.
Visit my Performance Page HERE.
Buy my new book HERE.
The Inevitability of Becoming Rich is HERE.
My latest YouTube video is HERE.

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.