Thanks, But No Thanks

Oct. 11, 2020

Maybe, in a way, he was trying to be helpful.

Years ago, I was watching my student play a match and a local pro was telling a group of parents why my student was never going to be a top player.

My student was on the rise and was starting to beat people who used to beat her. But her success would be short-lived, according to the pro.

Why? My student was too short (she was a generous 5’2″). Short girls don’t win at the top levels of junior tennis.

My student hit too soft (she mostly hit high, looping balls). The top girls hit hard and flat.

No, as soon as my student turned 18, she would be overwhelmed by the bigger, stronger, flat-hitting girls.

Maybe, in a way, they was trying to be helpful.

My student had somehow defied the wisdom of the local pro and had become a Blue Chip recruit. That means she was one of the top 10 players in the nation.

And she was on a recruiting trip to her local big-name college, which will remain nameless.

My student was trying to make a final decision between Northwestern and the local college program.

The Ohio State coaches told her it was an easy decision.

She could play for Ohio State. She’d never make the lineup at Northwestern. Northwestern had won the Big Ten nine years in a row and had been ranked in the top 5 in the nation.

She could be a star at Ohio State or sit the bench at Northwestern. It was an easy decision.

She chose Northwestern. And never sat the bench. And won the Big Ten every year. And ended up playing #1 singles.

Maybe the failure-predictors meant well. Maybe they were trying to save my student from heartache.

Or maybe they were full of $%&#.

The trading world is the same.

There are all sorts of people telling us we can’t beat the market and grow a small account to a big one.

We could listen and give up.

Or we could act as if we’re not going to fail.

My student heard all the Resistance and then chose to operate as if everything would work out as she dreamed.

Remember all the reasons an automated account can’t grow?

We can’t optimize. All settings must be the same for Long and Short. Automated systems don’t work. The biggest drawdown is right around the corner.

I entered a real-money World Trading Contest anyway. The portfolio I wanted to use broke all those rules. How has it done from January 1st to today?

It’s done okay.

So, while I appreciate the academic studies and the backtesting warnings and the stimulating trading conversations online, I think I’m going to try my Experiment anyway.

Thanks, but no thanks.

We’ll talk about the details of the Experiment in our next Newsletter.

Talk 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.