October finally showed some activity in the Greed and Fear model portfolio.
The month started with a losing trade, which was an unfortunate one. Getting stopped out and then seeing the market going your anticipated way is always tough. The market pulled back big and then recovered. So trading execution was absolutely correct, it just wasn't rewarded. The same way incorrect execution is sometimes profitable. This is one of the most difficult aspects of trading and not get tempted to ignore trading rules and move stops.
If you use any search engine and type in the phrase "How to become a successful short term trader" or anything similar, you will find roughly 70 million(!) websites that will help you in achieving that goal, or so it seems. While in reality, there's only one right and honest answer which is more like this: "There is an extremely low probability you will ever be successful in short term trading, and you will most likely lose all funds in your account".
- Written by Raoul Suurmeijer
- Category: Results
In 2017, a start was made with verified actual trading results, all through a difficult but still profitable 2018. Now we continue doing so for the year 2019. The result is based on trading only 1 E-mini S&P future with a (minimum) $10.000,- base amount. This is the Greed and Fear model portfolio. With the accumulated profits, the value of this portfolio stands at $17185,50 at the start of 2019.
Every now and then when I'm reading an article from the world of behavioral economics discussing a particular phenomenon, it makes you realize once again how much trading and investing is about human behavior.
First, autotrading is a great development for the trading community, both for investors as well as traders. It gets rid of all the fluff and ambiguous analysis that float around the internet, that whole crazy circus feeding the modern gold-rush.
Early visitors of this blog have seen my daily posts for years now with the so called Greed and Fear indicator and to which direction it was pointing. This was my initial attempt to expose the indicator to the public. Along the way, the performance was measured of course, to see if it was any good and useful in trading. The most honest way to measure this performance was by counting index points 'it called right' subtracted by 'index points it called wrong', as I've explained here in more detail.
But during all those year, I never explained in some more detail what the Greed and Fear indicator really was, while this is probably one of the most fascinating subjects today: a neural network! The more widely known terminology would be machine learning, artificial intelligence etc. There are subtle differences, but it all comes down to 'intelligent software'.