New Smart Money (Update)

Corona Del Mar, CA

 

Howdy Friend!

 

Last night I watched a Joe Rogan podcast, and I felt like he was talking about me...and perhaps you will identify with this too.

 

He was talking about Man's insatiable curiosity and how it's pre-programmed into us. We're constantly trying to figure things out. I don't know about you, but when I see a magic show, I'm trying to reverse engineering how they did it.

 

I bring that same curiosity to figuring out how the markets work. Cracking the code so to speak. I'm constantly improving, and even spent $4 million outta my own pocket on A.I to assist me on this never ending quest.

 

From time to time, I reveal what I'm working on behind the scenes...so let's revisit a potential replacement of the good 'ol Smart Money indicator.

 

Here's the Commitment of Traders report for the Micro E-mini S&P 500.

 

Pay attention to the blue line:

If it's behavior is anything like the E-mini S&P 500, then you trade against what these traders are doing.

They are currently selling like crazy. So I suspect we'll see the S&P 500 advance. Buuuuuut...there's a big J.Lo buuuuuuuut...there's very little historical data to go by.

 

That reminds me of a massive flaw in many traders' thinking. Let's say that there's an event that results in higher prices 100% of the time...yet there are only five samples. Do you make the trade?

 

No way!

 

That's statistically insignificant.

 

Here's an example: I read about a trader that ran a seasonality back test on a bunch of stocks. For ten years in a row, a certain stock rallied in October. Do you take the seasonal trade in the 11th year?

 

No way!

 

That's statistically insignificant, and you're very very very likely to be fooled by randomness. I'd rather see hundreds or thousands of trades.

Quick story:

I was on our weekly "The Boss" group call, and one of our new members was having trouble building a Profit Pair strategy on the S&P 500 (SSO/SDS are the ticker symbols).

 

So I built one live in about five minutes with The Boss SuperAi (easy fix...he was just missing a few things).

 

The Boss built this strategy from scratch on its very first try:

This strategy has 1144 trades over sixteen years.

 

See that greyed out area? That's data we leave out to verify the strategy works on unseen data (if you don't do this, you'll probably lose money).

 

In my 25 years of trading and system design, I'd have to say that building Profit Pairs is my greatest discovery. Profit Pairs allow you to make money when prices go up...and when prices go down. My greatest failure was designing strategies that could make money as markets fell.

 

It really bugged me because I spent all this time and money, and even the A.I was having trouble finding consistent trading rules.

 

That all changed with a new discovery.

 

Curious?

 

You can read about it here >>

Trade smart,


Dan "Prince of Proof" Murphy

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Wondering how to get started?

Step 1Looking for more consistent profits?

Get a free copy of my book: Artificial Intelligence, Real Profits here >>

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.

Watch a demo of The Boss "SuperAi" Strategy Builder as we harness the raw power of 3500 computer cores and strong A.I.

During the presentation, you'll learn: How to Generate Consistent Retirement Income Using "SuperAi-Designed" Trading Strategies. Click here >>

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

Online training to vastly improve your trading with A.I.

Watch the podcast >> | Read the blog >>

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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