Trading During Volatility & High-Yield Portfolio Program

Nov. 11, 2024

Two things this week.

The first one is a question I’ve gotten for many years.

“Should I turn off my automated strategies during big news events (like elections)?”

It’s a valid question.

And I hate it.

Not because it’s a bother or that it shouldn’t be asked.

I hate it because we shouldn’t have to worry about things like that. We should have ways to make money that aren’t so fragile as to break during a news event.

We should either be in or out–and be fine with it.

And comfortable.

So, the goal is to never have to ask that question again, to ourselves or to others. The goal is to have a system that makes us money whether it’s volatile or not.

That said, I’ve always tried to develop systems that trade through everything. If you test something over 20-25 years, that should incorporate tons of wild news events. If we’re fine with the 25-year backtest, then we shouldn’t have to worry about turning off our robots on Nov. 7th, 2024.

Right?

So let’s take a look at a few systems to see if it was a bad idea to trade last week.

The first is the Buy Monday system from a January 2024 Newsletter. This system buys the ES futures contract (ES.D 10M chart) after 1 pm ET on Monday and goes for a 1.3x ATR target and a 22x ATR stop. It also exits on Wednesday afternoon if the target or stop have not been hit.

This definitely feels like a system that should be turned off during big news events and in my infinite stupidity, I turned off my Buy Monday systems last week.

Big mistake.

All the Buy Monday systems thrived, including the Newsletter one:

And here’s that system for 2024. That gives us about 10 months of out-of-sample trading:

It’s done well. And should not have been turned off during a big news event.

How about the PPP (Performance Page Portfolio)? It would’ve been a mistake to turn that one off also:

Gold didn’t like the volatile news but the others had some big winners.

And how about the high-yield ETFs we mentioned last week?

They all went through the roof.

CONY has been soaring since last week–and the massive distribution payment is still to come this month:

Speaking of high-yield, I’ve been getting emails about creating a high-yield portfolio and/or a high-yield program.

If you wouldn’t mind, please email me a “yes” if looking into extremely high yields is interesting to you. You can also email “no” if you don’t want to hear about it.

All told, I’m not interested in worrying about my trading portfolio just because big events are coming up. This week is the last time I want to think about it.

If the system is tested and trusted, then it stays on. Period.

Or the portfolio stays on because of the huge distribution payments I never want to miss.

Either way, I’m hoping to put this dilemma behind us.

Looking forward to hearing from you.

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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.