"Does My System Catch Big Winners?"
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This week we're talking about a Three-Part Plan.
Part I is automated trading, Part II is dividends, Part III is turbo trading.
In the next two Newsletters, we're focusing on the turbo trading part--the part where we try to grow an account quickly.
People ask me testing questions all the time, and I think they're missing the most important question.
The question isn't about what indicator I'm using or what timeframe is best. The big question is:
Does this system catch big winners?
I'm always surprised at how many complicated, thorough systems miss the most essential part. They have a ton of cool rules but they missed the current run on NVDA.
What good is that?
If a system doesn't get us in on the massive winners, then we need to find another system.
In the last Newsletter I mentioned a huge hypothetically winning trade on TQQQ.
(Well, it's not really hypothetical. If we entered according to the rules of the system, it definitely would have happened for us. But it's an old example.)
The Incredible System definitely would have worked on TQQQ. But is that blind luck? Would this "incredibly" simple system have caught the current hugely successful stocks?
Let's take a look.
Here's NVDA:
The system would've entered NVDA a year ago at $231. NVDA is now at $822. How about SMCI?
Whoa, the system would've entered back in 1/1/2021 at $31.80. It's still in and would hypothetically be up 2,700%.
But here's a shocker: a lot of the current big winners weren't tech or in the Magnificent 7. (Gasp.)
Here's ELF:
It would've entered during the Bear Market on August 2022 at $33.56. ELF is now at $217. And here's retail stock ANF:
The system would've entered one year ago at $29.10 and ANF is now at $131.
So, it seems this system is a good candidate for a turbo account. It catches massive winners in several different areas.
But, as always, there are two problems.
The biggest one is: we can't trade any of these examples right now. They've already fired off a long time ago and are way too extended to consider a current entry.
The other is that, like SMCI, the system creates stoplosses. SMCI would have stopped out many times before the big winner happening now.
Not every trade works.
In our next Newsletter, we'll address both of these problems.
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.
