What Would You Do If…
…your years of hard work finally paid off, you discovered your Holy Grail of a trading system, and your trading became so consistently successful that, with the compounding effect, your future income was virtually unlimited?
..you won the Powerball?
…everything you ever thought you wanted was suddenly available?
What would you really do?
***
This is a post title I’ve had collecting dust for years (unfortunately, every time I say “What Would You Do” I keep hearing that crazy song from Team America in my head). I guess it’s about time I tried to get this stuff onto paper, or pixels.
No sooner have I attempted to put pen to paper, however, than the post starts turning into a novel, as have so many ideas I leave on the back burner for too long. So the article itself will be separate, much longer, and may require that you ingest a good stimulant if you want to read all the way through it.
This post is more of an introduction.
The idea and the urge to write the article (novel) were brought back to the forefront of my ever-fading attention over the past week or so by a few things: one was a post by Bass Ackward Trader over at Move the Markets called Simple Question, which reminded me of the Schadenfreude phenomenon.
Another was a great email I got from a reader in Germany, suggesting I host a StrategyDesk Backtesting Contest, where I answered that I doubted anyone who had developed a really, really successful strategy would be eager to share the details publicly, although as you know, many of us exchange ideas regularly via email with each other. And as I wrote that note, I remembered the post I needed to compose.
Finally, a recent comment by Brett reminded me that I still owe everyone the results of that big backtesting study I did back in the Spring and Summer, which permanently changed the way I trade. With those changes, and the potential positive effects they might bring, I had to revisit the motives behind my trading once again, which- you guessed it- brings us back to that darned novel.
Where will I be going with the article? Here’s a teaser: I was at a good friend’s house for supper a year or two ago. This friend and his wife have the uncanny knack of inviting me to supper out of nowhere, just at a time when I need it most (the company, that is, although the food is excellent as well).
There were only a few of us there (as usual), and the subject of winning the lottery somehow came up. One guest hesitated, and when my friend’s wife asked him, “You would want to win the lottery, wouldn’t you?”, his reply was “Not Right Now.”
Silence. “Why not??”
Because I don’t think I’d like the person I’d become if I had that much money right now.
I’ve never forgotten that conversation, and that statement which struck me so deeply, and I wonder where that guy came up with it sometimes when I see him looking back at me from the mirror.
Dinosaur Trader said,
September 27, 2007 @ 7:01 am
Will,
What a teaser! Looking forward to more. I love the way you write.
-DT
LP said,
September 27, 2007 @ 8:04 am
Will,
Have you seen the thing on E about the curse of the powerball. Most of them either go broke or destroy their lives. It’s crazy to me how that could happen. Even a crappy CD at 3% a year could probably earn more than I’ve ever made in my lifetime. There just might be a lot of wisdom in what your fried said to you.
LP
HPT said,
September 27, 2007 @ 11:02 am
If you have too much money, donate 10k to me, and I will gladly lose it for you in the stock market.
BNJ said,
September 27, 2007 @ 11:58 am
Whut would yew dew…
Oh great, now I have that damn song stuck in my head.
Anyway, it’s a great question, and a good thought experiment. Looking forward to hearing more.
john said,
September 27, 2007 @ 12:47 pm
nice teaser….looking forward to the rest of it
SD Trader said,
September 28, 2007 @ 1:42 am
FYI: New Strategy Desk version 2.0 just out.
Soren from La Palma said,
September 28, 2007 @ 5:33 pm
Here is my setup for the Big Quest:
Find al StrategyDesk-Formular for FXI that beats the buy&hold-Strategy over 2 Years. The reason I choose FXI is, that is a highly volatile but rising ETF. The setup sounds like it is easy to beat, but the real world is something different. The best I could come up was a EMA 21- strategy. It got me only half of what a buy and hold strategy would have gotten.
And by the way: there is no reason not to share a winning formula: If as a result of sharing, many people are jumping on your “train” you can enjoy the ride, because you have been the first one to get a seat.
Will said,
September 28, 2007 @ 11:06 pm
Thanks for the comments, everyone, and the compliments- the checks are in the mail
I’ve been stuck working the day job so much lately, I barely have time to get on here and clean out the spam that Akismet doesn’t catch (thank goodness it catches about 99% of it). Slow going with the posting.
Maybe the testing of v2.0 is why StrategyDesk has been so exceptionally slow lately… I’m going to download it tonight and look it over.
HPT - too much money… with the 3 daughters headed through middle school, high school and then college, I imagine any surplus I might run will be spoken for for quite some time, but if I happen to trip over 10k extra, I’ll email you!
Soren - thanks for the visit. With FXI’s parabolic rise, we’d probably never come up with a formula that objectively beats Buy & Hold up to this point. The flip side is that if (when) it comes back to earth, almost any old formula that gets you out will beat B&H. Perhaps just the old loose trailing stop (?) But we’ll sure give it a look.
Léon R.G. DRUEZ said,
October 6, 2007 @ 4:35 am
Will’s strategyDesk formula page-May 2007
I try to establish a day trading strategy (scalping) using a movingaverage High 3 periods and a movingaverage low 3 periods + MACD histogram positive 2 periods in case of Long position and MACD histogram negative in case of Short Position.
Still, I need 2 formulas more which were not found in the StrategyDesk Formula and Syntax Guide version 1.3.1
1°/Entering in position Long if the first bar low 15 min. is greater than Bar open of the Day; otherwise no trade during the day.
2°/Due to the fact this strategy is a day trading stategy, exit position at the end of the day.
Many thanks in advance.
Merci beaucoup pour votre aide
Will said,
October 8, 2007 @ 5:10 pm
Leon,
Will try to get back to you on this soon. Sorry for the delay, I’ve been a little crazy lately. Not my schedule so much- me, personally, crazy.