On Friday I commented that my recent run of good fortune probably won't last. 14 winning trades in a row, and 18 winners of the past 19. I'm not saying this to boast. I'm actually in a precautionary mode, trying to lower my (and to some extent your) expectations. All good things come to an end, as the cliche goes. I should probably just stop trading the rest of the year, but what fun is that?!! :)
An admirable suggestion was made that I track the recent performance of each system and bias my trading decisions toward the better performer. I've tossed this idea around in my head the past few days and have decided not to do that at this time. The main reason for that is the JT Composite system. The purpose of the JT Composite is to hedge bets and reduce risks. When you start pitting the JTS up against the CCI trying to find which one may perform better in the future, you're right back at square 1. There is no guarantee that recent performance has any bearing on the future.
I will offer more support for strictly following the JT Composite. The chart below represents the daily balance of my actual trading account. (It doesn't go back to Jan 1, 2012 because I'm not using my trading computer right now and don't have the numbers.) The % gain/loss does go back to Jan 1. I did not have the best January so the chart starts below 0%. I've marked where the CCI and JT Comp systems went live. Until the JT Comp system came online, every good stretch was followed by an equally depressing drawdown. As soon as I recovered all my money for the year, I went right back down. Now, I'm not saying the JT Composite system is perfect, but results so far have been outstanding.
The biggest reason for the increased returns has probably been a mean reversion environment vs a persistent trend. It will be interesting to see how my systems (and specifically the JT Comp.) perform when stocks move in just 1 direction. That has to happen sooner or later. For now, I'll enjoy what appears to be a 3rd wave up in my account. (Shout out to all the EW'ers!!) lol
Final thoughts: I went heavily short Friday so I'm back in the bear camp. It's odd flipping back and forth so quickly. It can really screw up your thinking. Just days ago, I wanted desperately for the market to rally.... Now I have to purge all those thoughts. Anyway, have a good remainder of the weekend. I'll be pulling for Tyson Gay tonight to take down The Bolt. Cheers!