Blast Off the Rest of 2018?
Twenty years ago this July, I started a little website giving out stock picks.
Back in those days it was the Wild West.
I didn’t have the luxury of sophisticated software for back testing, so I hacked together some code written in PERL and the now defunct Quotes Plus quote engine. I didn’t have the R&D budget we do now, but you have to start somewhere right?
What amazed me was how backwards the trading community was on the truth about how the markets work. I thought MACD was the coolest thing ever…
…until I tested it with a computer.
You’re better of buying your sell signals, and selling your buy signals. It’s that bad.
Reading some of the old trading books reminds of the old poker saying: Trust everyone…but always cut the cards. Fast forward to today, and I’m still seeing the same problems. Traders aren’t doing their homework.
I think the key word here is “work,” and that tends to repel a lot of the get rich in your underwear crowd from making good decisions.
In last week’s updated, I talked about how the Commitment of Traders report went from nasty to amazing literally overnight. Well, today confirms it: We’re getting back into stocks via the S&P 500 ETF, SPY.
I never know when I will see a signal change (That proof was pretty clear last week), and I don’t know the duration of these moves.
I will say that the average position lasts 63.8 trading days, so right at about 3 months. A lot of work went into this strategy. It’s been coded into a computer and traded with real money since 2006.
Users of Portfolio Boss have done some really cool things with it, including swing trading S&P 500 stocks in a particularly devious way.
I love passing the torch to my fellow traders. Enjoy your weekend.
Dan “Prince of Proof” Murphy
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