Honesty
My goals for Etoro have changed. My singular focus of this trading account is to provide monthly income, and in doing so, help others achieve financial freedom.
Since I have joined the popular investor program, I promise, to be honest, and transparent.
With that said.
It is NOT good enough
The past 2 months the USDJPY system has been great for me! Till last week where my system didn't return anything for a week. And it lost me some money today.
So reality check, it is not enough for my goals of monthly income. I do not have all the answers and do not know everything there is to know.
I need to get better.
Dirty Secret of the industry
As a partial academic (I am perusing my masters in Finance), my understanding is different from most people when it comes to selecting managers.
Warren Buffet says it best (full article here):
Buffett begins by imagining a nationwide coin-flipping contest. Everyone in the country participates and calls the flip of a coin. Call correctly and move on to the next round, guess wrong and you're out.
After 20 days, about 215 lucky flippers will have correctly called 20 consecutive flips. They gloat in success, yet the nature of coin-flipping tells us they're just lucky. It's a game of random chance.
But what if all 215 flippers lived in the same town? What if they all hailed from the same school? The same fraternity? Then we'd get excited. The laws of probability suggest 215 winners after 20 days. But those same laws tell us that if all 215 belonged to an associated group, that almost certainly wouldn't be the product of random chance. These 215 flippers clearly would know something we don't.
The real flippers in Buffett speech are nine "superinvestors" -- himself included. All nine crushed the market averages over multiyear periods by between 8% and 22% per year.
In a world with millions of investors, such returns can occur by sheer luck -- just like the 215 coin-flippers appeared at first glance. But all nine superinvestors hailed from the investment school of Benjamin Graham and David Dodd -- Columbia professors now known as the fathers of value investing. That meant something big. It meant that their success wasn't the product of luck. It almost had to be attributable to the only common link they shared: the investing philosophy learned from Graham and Dodd. The "intellectual origin," as Buffett put it.
Credit: Photospin
Learning from the best:
I echo these thoughts and want to be part of the superinvestors. I have thus dedicated the basis of my trading on the best Macro traders and thinkers of our time and all of my systems have been based on these concepts.
Ray Dalio - Credit Cycle
Nassim Nicholas Taleb - failure of bell curve statistics and asymmetrical risk
Michael Marcus - Trinity of trades (Fundamentals, technical and sentiment)
George Soros - reflexivity
But for my 3 systems at the moment, they have to change because it isn't good enough to reach the goals.
I will choose hold on to nothing if it does not benefit this goal. And unfortunately, this includes my beloved 4hr system which has not failed me since I was doing my undergrad.
Rigorous Testing
Copiers and followers, do please know I do test my methods before applying and never risk capital to test anything. It either works or it does not.
I do not believe in eyeballing charts either, IT DOESN'T WORK! So anyone showing you past data with the benefit of knowing future movement. Like so many YouTube gurus. So please take it with a pinch of salt.
I have my own way of testing and if you would like to hear more, drop me a comment or write on my Etoro feed and I might do a blog post on it.
Stay safe people!