In my directional trades, which might be taken in shares or options, I use a combination of short and long systems, and use several systems. Hopefully, this will describe why that makes sense to me. The first table you see here is one of the strategies I use... it happens to be a short strategy. While its a pretty profitable strategy, you'll notice a fair amount of red in the table. There are quite a number of losing months, and many of the drawdowns are hefty... perhaps beyond palateable.......
This second table shows what I call my "Blender". It takes several systems and blends the results into something which is far more consistent and far less volatile. In reality, I trade more than the four systems shown here (usually about seven), which causes things to be even flatter; but this should give you the idea. By trading a blend of systems that do well in different market conditions it's possible to produce reasonably steady results from your trading portfolio.Good Trading
Are those actual results, or backtested? They are very impressive!
ReplyDeleteI am going to be visiting here more often to see if I can't learn more about your option strategies, about which I have a lot to learn.