24 Jan Watching 50% Per Year in Real Time
Watching 50% Per Year in Real Time
January 24, 2018
The universe is chock full of people saying it can’t be done.
There’s a never-ending supply of people pointing out your failures.
There’s an inexhaustible roster of volunteers seeking the exquisite ecstasy of being able to say, “I told you it wouldn’t work!”
But I’ve always been fascinated by a different question:
What if it’s true?
I know the experts say the market can’t be beat and we should all buy index funds and traders should just shut the heck up.
But what if it’s true? What if the market can be beat? What if there are systems out there available to everyone that can make more money than an index fund ever could?
Isn’t that worth a look?
The upside is that we all might have a tool that could change our financial lives.
The downside is that we look stupid for trying, make less than the market, and feel the wrath of the I-Told-You-So army.
Is it really worth all that?
Well, for me, the reward is worth the stretch (naughty word warning).
The research I’ve done for the past several years shows that the Heron can average around 50% per year at a very aggressive trade size, and the Hornet can do even better.
Anything even close to those numbers would blow an index fund clean out of the water.
But there are all sorts of problems.
The first is the aforementioned trade size. A trader has to be willing to accept a 50% maximum drawdown to go for those numbers. That’s not for everyone, and rightfully so (although 50% is exactly the drawdown an index funder would have to accept).
Another is that all backtesting isn’t real. Right, internet?
Backtesting never happens in real life and potential returns are always fake. That is something I-Told-You-So badge wearers love to point out.
What if, however, taking on that risk is acceptable to us, and we believe the testing isn’t fake?
It appears then that we’re at an impasse.
Those who believe in research and outperformance can argue their points all day long, but the naysayers will only counter with all the potential flaws in the arguments and then they’ll point to the graveyard filled with traders who died taking on this beat-the-market mission.
So there’s only one thing left to do.
Do it anyway.
And document it for anyone to see.
Starting now, I will be putting every trade that the Heron and Hornet robots take on my website on the Performance Tracking page (Breakout trades, too). Not only will the trades be listed, but I’ll also list what the testing shows we should have made.
We’ll be able to see if the backtesting is accurate in real time. And we’ll be able to see if the robots make any money.
Is having trading dreams a good thing? Or just foolishness? This year we’re going to find out.
If you’re interested in following along, once again, you can see all the trades here.
Tomorrow, on the weekly YouTube video, we’re going to talk about all the things that can go wrong when trading a robot (and what is NOT going to happen this year).
Hopefully see you then.