The months of August and September have been PAINFULLY slow. September has seen a whopping FOUR trades. In a volatility-based trading system, volatility is required for significant profitability. To give you an idea of how the current pace stacks up against the norm, let me share with you some stats from past years.
Over the past 12 years the MultiStage Trading System has triggered an average of 36 trades per month. this varies quite a bit along with volatility. For example, during the years of 2000 and 2001 the average was 67 trades per month, and during 2008 the average was 57. But these were extreme levels of volatility. Conversely, during the quiet years of 2005 and 2006 the average was only 17 trades per month.
So far, 2010 has been quite typical. The first six months of the year averaged 35 trades per month and were quite profitable. But the last two months are really testing my patience. We had only 14 trades in August, and 4, yes ONLY 4, in September... BORING!
That's the nature of the system, however. Now is the time for sitting on our hands, following the trading rules, and looking at a big pile of cash doing nothing. Ugh! One of the great benefits of a volatility system, however, is that in times of low volatility we are in cash. I'd rather be earning, but there's something calming about being in cash at times too.
Good Trading...
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