31 Jul Simply Better Than Spy
Simply Better Than Spy
July 31, 2022
This week we’re trading our diversified “GBPJPY ETF”.
So far, it’s destroyed the SPY (the S&P 500 ETF). But, of course, the SPY ETF is authorized by the experts and our “ETF” is not.
Let’s try an even simpler system and see how that looks.
This time we’ll trade our “GBPJPY ETF” on a 4-hour chart using only the RSI indicator. Here are the details (we first talked about this system in the Newsletter from 3/7/21):
RSI Super Simple 4-Hour GBPJPY
Long Entry: When RSI closes into Overbought (8 Length, 70 Overbought)
Short Entry: The opposite of the Long entry (RSI into Oversold)
Long Profit: 325 pips
Short Profit: 325 pips
Stop: 130 pips
That’s it. Great system developers say that systems with 4 variables or less tend to be robust far into the future. This simple system has three variables (target, stop, RSI length).
How did it do?
From 2007-2022 trading 1 lot each time, it hypothetically produced $127k of profit. See the report here. Those results annihilated the results of SPY over the same time period.
This week started with a question about only trading the GBPJPY. I’ve made an argument that a Forex currency pair incorporates as much or more diversification than a blindly-accepted stock ETF like SPY.
You may or may not agree.
But the returns aren’t even close when comparing our systems to buying-and-holding the stock ETF. Our systems win by a mile.
And that’s maybe the better argument.
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.