Sometimes the weekly column writes itself
How’s trade copying going? Mine has finally stabilized
So funny just writing a column about it today
After flatlining for about 2 months I am finally back on the up and up but of course it involves NOT taking all my rules based trades and often getting out early.
It’s really about whether you want to be right or want to make money everybody who backtests a rules based system makes a huge mistake in thinking that future is just like the past when a 5% variance which is NOTHING can mean dif between profit and loss so the other day as I closed out a trade early I realized that just making 1 penny is still million times better than being “right” on your strategy and taking a loss.
Now this applies to my type of trading which is negative risk/reward if you are trading traditionally at 3:1 r/r than its probably not true but it was an interesting insight
and from now on I NEVER regret taking early profit no matter how much I leave on the table
because the flip side is that I rarely wipe out
So crazy. I just recorded two radio shows about this exact same thing. Some guy wrote me this message:
Same thought. Trading is fucking hard. You want to make it harder? Lol
People are always looking backwards
At what could have been or might have been or should have been. But every time I focus on ANYTHING besides the right now -- I get screwed
I think the key thing here is that trading is like quantum physics where all the rules of the universe are reversed but people think it’s like investing which is much more akin to Newtonian physics
It’s not linear. So true.
So good risk reward ratios, holding on for long term profits, and having low transaction costs are all completely opposite in trading
That why it’s so hard to teach this to people
It’s like saying that chain smoking, coke snorting and promiscuous sex all leads to a healthy lifestyle
Wait. It doesn’t?
Happiness is not linear either
The future is NEVER just like the past
It’s just different enough to really f- you if you don’t recognize that fact
The only lasting rule is stay alive
Haha so true
This is a jungle
Robbie I am stealing this whole conversation for my Memorial Day column ok?
I’ll steal it too
This is just too good
I never believe in anything but I actually really do believe in Carl Jung and synchronicity and today is just the most perfect example of that