Market Beaters

returns to a different outcome to the point where you start to develop a true distribution on your return stream, not merely the one actual occurrence. It’s a way of simulating more data. What results then is that your maximum drawdowns go out because there will be one simulation in there where those bad months hit together. What it really does is

They go counter to your human nature. We had an example of that a couple of years ago when interest rates were really low. We had been stopped out of our long bond position. We got a re-entry signal to go long again, and I looked at Rob and he

like it, but again, I’m limited

is what will result in the future. Not always. but historically, these moves off these conditions have existed so often off these highs and lows that I’ll want to go with them. On top of that model, I bring in a timing tool. I don’t think a market will bottom the same way every time, so I have an arsenal of four or five ways to identify bottoming a

You always have to underestimate performance in order to stay sane because we all know that our worst drawdown is ahead

where you don’t take profits. Then the market goes sideways or maybe down for a month or two. Then you’re in jail. You’re in prison. Then it starts to take off again, but gosh, you probably

the markets, really beat up on them. Day traders tend to be really technical and want to catch every little move. I’d rather catch a large trend within a day as

low volatility period. The key to profitability is to find when you’re going to be in one of those periods,

” said Louis, “you get into the role of trying to write Excel spreadsheets, and then mixing this with that, and at that