Trading the Tao of Matt McConaughey

If you are an American male of a certain age the words, “Alright, alright, alright” spoken in a slow Texas drawl, have special meaning for you.

Those are the very first words ever spoken in a movie by Matt McConaughey and it may be the most famous celluloid entrance of our generation. The words have become a kind of mantra, a reference point for a certain attitude towards life that can only be described as the Tao of Matt.

McConaughey, of course, is much more than an actor. He has become a sort of Philosopher Dude -- an unpretentious everyman whose view of life combines the very American traits of decency and rebellion. No one pushes McConaughey around.

My wife snarkily refers to him as the “Oprah for the middle age male” and there is certain amount truth to that statement, but whether you think he is a prophet or a poser McConaughey has a cultural pull well beyond his movie stardom and a recent video he shot certainly resonated with me.

I stumbled across the video while surfing Facebook and of course was unable to pull myself away. It’s a typical McConaughey monologue about the meaning of life and although I am sure many of you will find it to be pretentious New Age pablum -- the general idea in the video is really true.

In the video, McConaughey makes the point that in life it is often much easier for us to know what we don’t want rather than to be certain of what we do want. His argument is that by the simple process of elimination we can stumble often upon the true essence of our search.

Whether this works or not in life, I don’t know, but in trading that is really good advice.

Many of you ask me why I don’t backtest. I don’t backtest because its not only useless but actually counterproductive to developing a good system. Backtest will prejudice your view both ways -- it will convince you that a system is good if it tests well or it is poor if tests badly. But think about it for a second, if backtests were any good -- why does every single one fail in real life?

In reality, backtests make you trade a system that has succeeded in the past but will surely fail in the future and abandon systems that failed in the past but may actually be very profitable in the now.

Instead of backtesting, I prefer to just trade the idea and then through the process of elimination refine and refine and refine. Right now I am working on a short-term mean reversion system and as I eliminate currency pairs, eliminate times of day, eliminate indicator settings, eliminate complex money management structures the system is getting closer to consistent profit.

The other day texted Robbie Booker that I thought there were no bad trading systems, just bad traders. That’s probably my typical hyperbole. But the more I practice the Tao of McConaughey, the more convinced I become that it is much closer to the truth than you think.

Boris Schlossberg

One comment

  1. Femi says:

    Back testing traps the back tester because past data is a sequence of events and not independent observations. Likeness to truth is not same as truth. History repeat itself imperfectly.

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