Reserving the right to be wrong, I think the strategy Found It on collective2 is extremely risky and likely won’t end well. Its equity curve looks perfect with only an 11% drawdown and 14 consecutive months of gains.
So what makes this strategy so risky?
Continue reading “Found It”Today my investments are down about $12,000. For months I have stayed mostly bullish because my algorithms have said to stay bullish. My intuition has frequently felt that it was a bad time to go long and my intuition is flaring up today. It may indeed be a bad time to be long the market and like a broken clock that is right twice a day my intuition may be right. But had I followed my intuition instead of my algorithms I likely would have been out of the market mostly starting at any or all of the red arrows shown below.
I think trading based on non objective analysis though is very hard and not something I am inclined to do. So when a day like today happens that is painful but my signals say to remain bullish I will remain bullish. This doesn’t mean that my systems couldn’t drop over the coming months then receive signals to exit, but generally I think I am way better off following my system rather than my intuition, gut, or non-objective chart analysis.
As always when in doubt it can help to zoom out on the larger picture. So if you don’t have a long track record yourself I would just say look at this chart of the S&P 500 with dividends reinvested to gain some perspective.
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