Futures Micro and Mini Portfolios Weekly Update
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We had a mixed bag of results for the week. Three of the Model Portfolios made money this week and the new 5k Mini/Micro achieved a new high equity weekly close. The others lost money but gave back only about 33% of the prior week’s gains.
I rarely discuss individual markets, but there was movement in the stock indexes, yet we are still are long some and short others. Is this the top of the huge uptrend in stocks? If you think you know the answer to this question, you need to re-read the quote from John Henry above. You do not know and neither do we. The market knows and will tell us in due time. We simply follow the market-never lead it.
The key is consistency and discipline as always. Some ask what does your algorithm pay attention to? The best way of answering that question is what it doesn’t pay attention to. You see, the algorithm looks at significant chart points, price, and time. News, fundamentals, and all forms and variations of technical analysis are totally and completely ignored.
There are six (6) Mega-Trades in progress right now which is off the charts. Trading is mostly about psychology- not indicators and fundamentals, etc. Winning trend traders have willingly surrendered to the market to make money and have left their egos, opinions, and analysis behind.
We make money by surrendering to what the market is doing- if we are in an uptrend we are long and if we are in a downtrend we are short. How simple a concept- yet 97% of all traders are unable or unwilling to grasp it.
The algorithm does not pick “turning points” per se, but it does get aboard a new trend quickly because that is what it was designed to do. Remember, we are trying to “mirror the market” and we do that by doing what the market is doing. If we are long and the market is going down, at some point, we will get short, etc. You may not like the fact that at times it seems we are late to the party, but that is a misperception and all I can say to that is: stay disciplined and follow the rules.
Our performance is not based on “forecasting” or “analysis” but rather what a price of a commodity is doing right now. The words “too high” or “two low” are not in our dictionary because no one knows what “too high” or “too low” is in trading- although the multitude of foolish losing traders think they do.
We make big money by being long term position trend traders- nothing more-nothing less. You need to be 100% disciplined to replicate the Model Portfolios and the more you deviate from full discipline, the worse your performance.
***New Trade Alert***
Sell Sep NASDAQ 100 e-mini and sell Dec NASDAQ 100 e-mini (roll-over and reversal) (28k/17k/5k old)
Reverse to short from long Dec Crude Oil (16k/28k)
Trades can be entered during the electronic night session or in the morning. There is some flexibility in terms of when you enter a new trade and this is because our profits are not marginal. Trade prices shown on the Model Portfolio spreadsheet are what I get for my own trades. Yours can be better or worse.
Don’t be shortsighted and look at one day or one week, this is about the long run, our returns are the best in the industry, history tells us if we follow the model and the rules we make lots of money.