The Long-Term Portfolio Destroys the Market

The Long-Term Portfolio Destroys the Market

Apr. 26, 2024

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This week we’ve looked at two strategies that have shown good testing going back to the 1980s.

Does that matter?

That depends on the trader.

But remember, the reason that index funders are so blindly loyal is because the data they’ve seen goes back many decades.

We can take the same mentality and put it into our system trading.

If our testing goes back forty years, we can feel confident during the drawdowns. 

In our first two Newsletters, we looked at Daily systems on Sugar (SB) and Orange Juice (OJ). Why those? Because only a handful of instruments have data going back that far.

Today, we’re going to put those two together.

But we’re going to add one more.

We’re going to add the 120-minute Gold strategy we talked about recently.

Two is fine for a portfolio, but my testing has shown that three is an excellent base number. Two is okay. Three seems to be a lot better in many cases.

And we’ll only go back to the early 2000s because that data is more reliable and also because Gold only goes back that far.

Here’s the portfolio of 3 using Portfolio Architect on a sample $20k account since 2001:

It shows a 1200% gain, which beats the market by a very wide margin.

Here are the Annual Returns:

A few small losing years, but an index fund would do worse.

Last, here’s the Report:

Even with costs built-in, we see a nice profit factor and profit amount. The win rate is not very high, but that’s what trend following produces.

All in all, it’s a combination that could hypothetically destroy the market and it has data going back multiple decades.

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.