“In using my Simon Sez III as a Swing Trader, we would have had 32 out of 32 successful trades [on CRWD] with zero losses other than a minor Head Fake or two.”
Quill,
You made that claim on Mar 21 in a reply to gatorswamp, and don’t even think about trying to backpedal on it or to erase it, because I made a screenshot of it. That’s what you said, and you’ve made similar, equally unbelievable claims that few who visit this forum have the means --or even the interest-- to challenge. I’m willing to bet money you can’t prove that claim to be true even in a back-test where hindsight is 20/20. Let’s negotiate the size of the bet later. But let’s settle the terms of the bet right now.
For each of those 32 trades:
(1) You need to state the time, date, and price for both the entry and the exit.
(2) The entries and exits have to be done with exactly the same set of rules each time.
(3) The rules have to be so clear and explicit that they can be coded into a back-testing program.
In short, if you’re going to claim that you have a simple and easy method by which anyone who uses it could make 32 trades on CRWD with nearly zero losing trades, then prove it.
What I’m going to claim is this. ‘Simon Sez’ is a trend-following system of which there are dozens if not hundreds. It’s a good system that I’ve worked hard on. But it can only achieve what other trend-following systems can achieve, which is a right-wrong ratio that tends to average around 35% percent when tested across a basket of stocks and ETFs and statistically meaningful data samples.
For sure, for an occasionally stock or ETF, the right/wrong ratio will hit 100%. But that typically happens only when a single trade was done. As the number of trades on that stock or ETF increases, the right/wrong ratio tends to trend toward the right/wrong average achieved across the whole data set.
Since you take pride in being math-challenged, let me use an example even you should be able to understand. If I claim to you that I can flip a fair coin and make it always land on heads, would you believe me? If I flip heads ten times in a row, should you believe me then? What about 32 heads in row? If you don’t say to me, “You’ve had an unusually lucky day. Come back tomorrow and repeat that feat”, then you’re a fool and/or it wasn’t really a fair coin.
‘Simon Sez’ (and its variants, some of which I’ve contributed to) is an easy and effective way to vet stock tips. That is beyond doubt. How good ‘Simon’ is when it used as the sole basis for making dozens of investing/trading decisions is a whole 'nother matter that you’ve made no effort to prove. Instead, you’ve made self-promoting claims that dishonor what you could rightfully claim to have achieved, which is that you can pull enough money out of markets that you can support yourself. Probably less than one in twenty who attempt it can make that claim. For that, you deserve praise and respect. But don’t tarnish that achievement by over-stating it. Your win/loss ratio isn’t significantly better than any successful trader with a long-term track record. Why? Because losses are just a fact of investing and trading, and they cannot be excluded from ever happening except by not investing or not trading.
Consider a non-financial example. You’re on a small, brushy creek, throwing #10 Madam Xs (or maybe a Skwala Stone) to native cutts or redbands. Do you really expect to end the day with the same fly tied on? It happens, but not often. If you’re high-sticking with a nymph rig on the Pit, then for sure, you’re losing gear, or else you’re not fishing aggressively enough. You’re not a timid trader. Therefore, you’re suffering losses in numbers that your ego won’t admit to publicly. But your broker knows, as does your tax accountant, as does anyone who trades for their own account. Losses happen. It’s how they are managed that matters.
Arindam
