Portfolio Boss

Do Markets Change?

Editor's note: Copy & paste this single line of code for up to 90.1% winners. This shockingly simple strategy is completely contrary to what the "gurus" teach. Over 4,781 trades as proof.

 Step 1: Click here >>

Corona Del Mar, CA

Howdy Friend!

Here's an interesting question: Do markets change?

Which of course begs the question: Do you have to update your trading strategies?

Yes and yes.

The best way to explain this phenomenon is with examples. Let's start with the Turtle Trader's N-day breakout system. As inflation declined, so did the "trendiness" of the commodities markets.

The "N" in N-day breakouts grew bigger and bigger, as did the size of the stop losses. In other words, it required more and more money to start trading similar systems. Here's another example: Stocks and bonds used to move together until the late 80's.

Now they tend to have negative correlation.

Another example:

As the pit futures were replaced by electronic contracts, there came a time where the Smart Money indicator completely flipped 180 degrees. It happened very suddenly in 2010. I could use the same simple parameters as before, but invert the signals. Participants had completely switched to the e-mini contract.

Speaking of futures...

The behavior of the S&P 500 completely changed with the introduction of those same pit futures contracts in 1986. It started to show severe mean reversion as traders took on too much leverage.

Within one year, the S&P 500 had an "impossible" decline due to these new futures contracts (marketed as "portfolio protection" at the time). We know it as the Crash of 1987. The public had start snapping up these contracts, and then sold for massive losses because the were leveraged to the gills.

Same thing in 1929 when you could leverage 10:1.

If you're using leverage in your trading, I highly recommend you stop. You're putting yourself in grave danger should these derivatives start gapping limit down. My buddy recently closed his feeder fund because he realized he'd be on the hook if his clients' accounts go below zero (which can happen).

Thankfully markets don't change very often, but it's a good idea to keep an eye out for new trading vehicles...especially anything using leverage. That's when you see the most abrupt changes in a market's behavior. These days, I've been seeing the biggest gains by recreating my old strategies with The Boss SuperAi.

It's pretty interesting to see how the A.I almost never focuses on "buy" rules. It focuses and "sell filters" and Ranking rules. And it very rarely will use regular price stop losses, which I found to be shocking.

The new intraday discoveries are probably the most shocking of all. More about that another time.

Editor's note: Copy & paste this single line of code for up to 90.1% winners. This shockingly simple strategy is completely contrary to what the "gurus" teach. Over 4,781 trades as proof.
 Step 1: Click here >>


Trade smart,

Dan "Prince of Proof" Murphy

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Wondering how to get started?

Step 1Looking for more consistent profits?

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Step 2Want to build a trading strategy in under 10 minutes?

Watch this free training video >> (Scroll down the page)

Step 3: Want A.I to build tailor-made trading strategies for you?

A.I is beating people at just about anything related to numbers and data. Nearly every billion-$$$ hedge fund now uses A.I to boost profits.

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Step 4: Looking to discover new trading ideas to help grow your nest egg?

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Step 5: Additional Resources

The Relaxed Investor (The simple strategy proven to work since 1926. Downloaded by over 200,000 readers)

The Ghost of Bernie Madoff is Not Yet Dead (Is your broker on the naughty list? Many traders have no idea they're being sold out)

The Ultimate Crash Detector (The strange weekly report that helps predict crashes. LIVE trading signals since 2006)

Portfolio Boss User Guide (Our flagship strategy building platform User Guide. See what it can do to help you on you quest for F U money)

Trading With Other People's Money - Coming Soon!

Bit-coin for Busy People (How to get started with Bit-coin in under an hour without the complicated new exchanges, high fees, and complicated wallets)

Disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.

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