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Ah, about a month ago, I kicked off this system right here on C2, and I took a moment to share my reasoning behind it all. You see, I had spent countless hours delving into research and backtesting, curious to see if all that effort would pay off in the real market. Honestly, even if it turned out just half as profitable as the model itself, I’d still consider it a major win.
Well, guess what? The initial results are in, and they’re looking pretty promising! Despite a few bumps in the road last month, the system held up almost exactly as I had anticipated based on the model. I’ve got to admit, I’m feeling pretty pleased with how things are shaping up so far.
I’m crossing my fingers this keeps going well. But you know what really grabs my attention? It’s not just about what’s happening now; I’m way more curious about looking back at past results or tests. If the system starts doing stuff that’s not on the expected track, I’ll lose faith in those backtests, you know?
Time will reveal, but I’m feeling more and more hopeful about the progress of things. I’m also thrilled to see that the same approach seems to be working well with groups beyond Small Caps, such as Mid Caps, and even sectors are showing potential. As things progress, I aim to introduce other systems.
Guessing here: yes? -10% for a fully invested equity strategy seems not unreasonable on the surface. A little analysis suggests currently there are about 11 trades held, with four currently profitable and 7 sitting on losses. Of known trades, avg loss only -$144, but with the unknown 7 additional losses that jumps to -$908, and known avg win is +$428 but with the unknown 4 current winning trades that rises to +$529. So the big unknown is the nature of the open losers. Are they mostly small with a couple big losers? We can’t know. Last listed trade ended May 23, and there’s a net loss of about $5000 since then, and if there is about +$3000 in unrealized gains, then there’s probably about -$8000 in unrealized losses spread over those 7 unknown losing trades. If the losses are spread about reasonably, and leverage remains around 1 or so, this seems on the surface to be responsible trading and I expect is within reasonable risk parameters. That said… this drawdown is happening within a time frame that the markets are reaching new highs, so that’s a bit more worrisome… what might happen if holding some losers hopefully and the market drops? As Sean said earlier, “Time will reveal.”
Yeah I see no big deal with having a 10% drawdown. But after 1 month of positive returns the outlook seemed to be great according to Sean.
I’m curious if after about 2.5 months if it is the same story. I’m also curious if the growth rate that he expects of 75-100% per year is still the target. As I expressed in previous threads I think the assumption of you needing to have 50% per year to make trading worthwhile or you should quit was harsh. I see no problem with a lower return than 50% annually and a higher drawdown than what there currently is. I would see no big deal with the current metrics except for the targets he set make me wonder if it’s still on track with them.
I agree with your more realistic expectations for strategies. Personally, if I had backtests showing 75-100% returns with low drawdowns, I would not toot the horn about it, I’d just show it with results and not raise expectations beyond what is reasonable.
Hello everyone. I’ve been abroad. How is everyone? So far, the system is doing as expected and adhering well to the backtested guidelines. After months of prep ( it’s all I worked on while gone), I launched my new newsletter based on how I trade called The Sean Kelly Trading Edge. Check it out and give honest comments if you would.
