05 Jan The Year in Review
The Year in Review
Jan. 5, 2022
As the new year started, I got exactly the present I wanted.
I just got an email saying that a reader had started trading a free Bollinger Band™ strategy from the Newsletter a few months ago and was up 30%.
Perfect! That’s the reason I do the Newsletter.
I’m tired of Backtesting Bullies and Index Fund Zealots and Sanctimonious Rule-Mongers. There’s so many people out there telling us regular people can’t trade. That no one beats the market. That robots don’t work.
I’m tired of that. I want to try to drown that out with strategies that help normal people outperform. Not for a month or a year or just long enough so I can hustle them for a sale.
I want strategies that last.
Hooray. But wanting something and achieving something are two totally different things (just ask tennis players who thought they were going to win a Grand Slam last year). I’ve said I want to develop long-lasting strategies, but did it happen?
Specifically, did anything work in 2021?
It’s taken a long time to compile the results and there even are more results outside of this report. But this is a pretty comprehensive list.
All told, I tallied the returns of 34 different fully-automated strategies for 2021. 30 were hypothetically profitable in 2021. 4 were negative.
And all 34 strategies were hypothetically profitable from August 2003 through the end of 2021.
These strategies were versions of the Dragonfly, Master Trend, 3-Moving Average, Moving Average, Turtle Breakout, Weekly Pivot, and Daily Heron (this list did not include the “regular” Hornet or Heron, which trades in the 15-minute chart).
Interestingly, I traded three of the four negative strategies live in my personal accounts. How did that happen?
One, all of the negative strategies in 2021 were profitable the previous year. Two, I don’t switch strategies in the middle of a year. I like to give strategies time. Three, some of these strategies were developed during 2021 and I was watching to see how they traded. Four, I didn’t have the comprehensive library list that I now have (and am talking about in these Newsletters). Five, I got unlucky?
The good news is that I traded some of the successful ones, too. It was a pretty good year overall.
But, as I mentioned, it’s time to get serious. We need to track things and trade things and make sure we’re using a scientific approach to this. We’re no longer using the Newsletter as an idea resource. We’re trying to produce a way to make money.
Here are the biggest problems. It would take a lot of money and a lot of accounts to trade them all. Obviously, if we traded them all, we would have caught all of the positive returns.
The other huge problem is the United States. Almost all of these strategies are using the GBPJPY, and we can’t trade multiple GBPJPY charts in the same account. U.S. traders would have to create over 30 different accounts to trade the list, and that’s not reasonable.
So, we’re going to have to choose. Is there a chance that we’ll choose and pick the one that’s down while missing the ones that are positive? Unfortunately, yes.
But the good news is that all of these strategies have shown hypothetical profits over 18 years. The ones that do poorly one year will probably do better the next year.
That’s just how trend following works.
In the next Newsletter, we’ll get down to business. We’ll talk about a free portfolio, I’ll give away the details, and we’ll track it all year. I want more emails telling me people are making money.
Talk to you soon.
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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.