I received a great question from a subscriber that I want to share with you. Below is the client’s question and my answer.<\/p>\n\n\n\n
The question:<\/p>\n\n\n\n
I have been wondering if it might be a good idea to buy another contract of ITV. The first half of 2019 has been tough for that system. However, it\u2019s overall track record is quite good. Now may be the low point for the system as it goes on to return to it\u2019s normal performance. Every system seems to have occasional losing streaks. The only reason it would not return to normal performance is if something in the markets it trades has fundamentally changed. This is something that you look at all the time and I don\u2019t recall you mentioning anything along those lines.<\/em><\/p>\n\n\n\n I would be interested in your opinion. If you don\u2019t want to give one, I understand. I am 70 years old and have been slapped around and kicked around enough by life to know that the outcomes are always my responsibility and not someone else\u2019s.<\/em><\/p>\n\n\n\n My answer:<\/p>\n\n\n\n First of all, I would say that adding now versus adding\nwhen the portfolio hits new equity highs is the better choice in my opinion.\nOne big frustration in this business is that clients start after a good run and\nthen quit when there is a bad period. This is a virtually guaranteed way to\nlose money over the long run. It can be very hard to do but starting when there\nhave been losses is much better with one caveat, that the strategies are still\nviable. I think you understand all of that and ask exactly the correct\nquestion. Kudos to you! It’s very refreshing to hear the right question being\nasked.<\/p>\n\n\n\n For swing trading, since Trump became President, it does\nseem something changed in the market. It may just be a coincidence though\nbecause the FOMC also became more hawkish around that time too. Either way (or\nbecause of both), the level of mean reversion in the stock market changed. The\ntypical pullbacks weren’t the same amount or duration as before. This\nobservation is what led me to make the swing systems dynamically adjust. I\nthink this alteration greatly improves their robustness. The one caveat is that\nwhen Trump tweets, all bets are off. For instance, May would likely have been a\nprofitable month if he hadn’t increased tariffs out of the blue. On the flip\nside, the FOMC has turned more dovish, which likely increases the likelihood of\nmean reversion trading improving.<\/p>\n\n\n\n For day trading, Trump and the FOMC were beneficial since\nthey increased volatility. With trade wars likely to persist, the global economy\nnot exactly booming, and Trump being unpredictable, volatility will probably\nremain higher than it was in 2013-2017. If that is the case, then day trading\nshould continue to be profitable. Also, I am especially happy that I’ve been\nable to replace older underperforming systems with new ones that also provide\nmore diversification. Spring ES has so far proven itself in live trading, and\nBandwagon ES looks very promising based on testing and my personal live trading\nbefore releasing it.<\/p>\n\n\n\n Looking back, there have been fundamental changes in the\nmarket (FOMC and Trump). These changes were detrimental to performance for the\nswing systems the past couple of years and beneficial to the performance of the\nday trading systems. One change going forward (FOMC becoming dovish) should\nbenefit the swing systems. Trump is likely not changing, so volatility should\nhelp the day trading systems. Although there is no way to say this with\ncertainty, my view is that the foreseeable future looks like a good fit for\nthese trading systems.<\/p>\n\n\n\n Thanks,<\/p>\n\n\n\n Gary<\/p>\n","protected":false},"excerpt":{"rendered":" I received a great question from a subscriber that I want to share with you. Below is the client’s question and my answer. The question: I have been wondering if it might be a good idea to buy another contract of ITV. The first half of 2019 has been tough for that system. However, it\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"sfsi_plus_gutenberg_text_before_share":"","sfsi_plus_gutenberg_show_text_before_share":"","sfsi_plus_gutenberg_icon_type":"","sfsi_plus_gutenberg_icon_alignemt":"","sfsi_plus_gutenburg_max_per_row":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/posts\/8033"}],"collection":[{"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/comments?post=8033"}],"version-history":[{"count":1,"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/posts\/8033\/revisions"}],"predecessor-version":[{"id":8034,"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/posts\/8033\/revisions\/8034"}],"wp:attachment":[{"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/media?parent=8033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/categories?post=8033"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/trendfindertrading.com\/blog\/wp-json\/wp\/v2\/tags?post=8033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}