SCOTT WELSH TRADING BLOG

Who Needs A Stoploss When You Win All The Time?

Who Needs A Stoploss When You Win All The Time?

May 8, 2019

I’ve never met a trader who likes a stoploss.

Some learn to deal with them, but none have learned to like them.

Trading without a stoploss, though, can be so much fun.

The winners come in droves and the losers can be filed away.

They’ll come back one day.

Of course, if the trades don’t come back, then it’s time for a difficult conversation.

But that conversation is for another day, for today we bathe in the warmth of winning all our trades.

On 3/3/19, we talked about a system that has won 100% of its trades over the testing period (2003-2019). It doesn’t trade very much, but it still hadn’t lost a trade when we discussed it in March.

How has it done in all of 2019?

It’s up $191.38. On a sample $6,200 account (the minimum amount we need to trade this instrument), that’s a 3% gain for the year. That’s trailing the market (but maybe not for long!), but it’s positive.

Considering the max drawdown for this system was only $812, and it wins all its trades, and it beats buy and hold over that time, it might be worth considering.

Here are the details once again:

  • System: The Heron Style
  • Philosophy Behind It: Buy with the trend on a pull-back
  • Need Special Indicator? No.
  • Chart: 15M
  • Instrument: @ES
  • Long or Short? Long Only
  • Long Entry: 1) Price must be close above the 56 SMA; 2) Price must close in Oversold (-100) on the CCI (length 21); 3) Enter at Open of next bar
  • Start Time: 16:00 EST (no later than 19:15)
  • Hypothetical Portfolio Profit: $6,402
  • Hypothetical Portfolio Max Drawdown: -$812.50
  • Stop Loss: $870
  • Take Profit: $87.50
  • Trade size: 1 contract
  • Hypothetical account size: $6,200
  • Test Period: 2003-2019
  • Percent Profitable: 100%

One last thing to keep in mind.

Even though this system is the ES and is Long Only, it was profitable in 2008 and 2009. It does well in market meltdowns.

So if the market does start to tank like so many people say it will, this system should hold up. We’ll check back into later and see how it’s done.

In our next emails, we’ll switch gears and move to a new system.

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.