SCOTT WELSH TRADING BLOG

Not Impressed

Not Impressed

Dec. 9, 2020

It was a cool-looking picture.

Last week, I came across a photo of a famous trader smiling as he stood next to an ultra-sleek $10 million computer.

The message was: Whew, boy, this is what regular people are up against!

The subtext was: An average trader doesn’t have a chance against this sort of firepower.

The big firms’ pockets are too deep, their computers are too fast, their employees are too smart, and the CEOs are too relentlessly ruthless.

Well, that’s depressing.

If it were true.

Yes, the big firms have all those things.

So what?

To equate amount spent to trading success is silly.

For example, as a teenager, I once beat a kid in a big local tournament whose family reportedly spent $68,000 a year on his tennis. I maybe had two racquets, one pair of shoes, and not enough money for regular private lessons.

Considering he only got 3 games, my question is: who gives a $#%& about his family’s $68k payroll?

I hit the ball in and he didn’t.

We don’t have to have $10 million dollar computers to make money.

We don’t have to have $10 million dollar computers to make boatloads of money.

For example, what if poor, ignorant people like us liked Tesla cars?

And what if we knew that all we have to do is trade breakouts?

If we combine our like of Tesla cars and our willingness to use simple breakout systems, here’s what would’ve happened in 2020:

We’d be up 140% on the year and would be up 22% on our current Long trade.

Do we need a multi-million dollar computer to get that result?

No.

Would Artificial Intelligence or close-proximity High Frequency Trading affect that result?

No.

It’s neat that you have a $10 million computer. Unfortunately…

$68,000 tennis budgets and $10 million computers don’t mean jack squat.

If you hit the ball in or have a fundamentally-sound way to trade that never goes out of style, you’ll do just fine.

In our next Newsletter, we’ll look at some very simple breakout methods that are tradeable on my new robot coming out in 2021.

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.