This Old Strategy Has Had a Great 2022

This Old Strategy Has Had a Great 2022

Dec. 21, 2022

Traders are incredibly fickle creatures.

If a strategy doesn’t make 50% in 5 minutes, it’s over.

It “doesn’t work”.

And then it’s time to move on to our next 5-minute attention span distraction.

Of course, that’s a big mistake. And it’s why most traders don’t accomplish their goals.

Today we’ll look at a strategy that, naturally, I’ve ignored for many months.

Why did I ignore it?

It didn’t make 50% in 5 minutes.

Is there any other good reason I’ve ignored it? Not really. It uses timeless principles and has good testing over the long-term. It shouldn’t have been ignored as much as it has been.

To call it “old”, though, probably isn’t accurate. I developed it in 2021. It uses the Master Trend robot and uses a basic indicator, the RSI. And these settings have been added to the new Master Trend and Elite Membership spreadsheets. (Those sheets are free to Master Trend and Elite Members and are updated each year. The new version comes out in 2023).

Here are the free details:

Master Trend RSI 4H NO B/E SIMPLE (GJPY ONLY)

  • Entry: For Long entries, price must close¬† in Overbought on the RSI (length 8, 70/30 Overbought/Oversold). The opposite is true for Short Entries.
  • Long Target: 325 pips
  • Short Target: 325 pips
  • Stop: 130 pips

In summary, this uses a simple indicator to alert us to highly trending conditions and then we try to ride those trends to a nice reward to risk ratio. It’s a very simple strategy.

How has it done this year in the wildly volatile, neck-breaking whipsawing environment?

It’s done very well.

Here’s the 2022 Report (via Portfolio Architect):

On a hypothetical $20k account, that’s a 33.6% return in a Bear Market.

How has it done since 2004? Here’s the tested Equity Curve:

In our next Newsletter, we’ll look at two other forgotten strategies.

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.