Friday, January 08, 2010

Past and Future

Happy New Year!

Every once in a while, I wonder who is included in the "they" of the "they say" school of reinforcing a statement. You know, "they say" the market has been due for a retracement. Or "they say" that 2010 is going to be a good year for the market. In fact, they say the past is destined to repeat itself. That is why we may rely on certain chart formations like a head and shoulders or a double bottom to signal an entry (bearish with a head and shoulders, bullish off a double bottom). However, we need to remember that the formula is fallible. Not every double bottom is followed by a move up or every head and shoulders where the neckline is broken will be followed by a further decline.

While what they say about the past repeating itself may be true, we can never tell when the repeat may occur. That is one of the reasons I always try to approach statements about good results in the past with caution. I make that preface before I set out the results of my paid subscription services for the percentage of closed trades that were winners in 2009. It was a good year for me. In terms of percentage of winners of closed trades in 2009, the following were my results:

Trend Trader 92%
$10 Trader 80%
Option Trader 77%

The specific trades appear on the Trade Tables for each of the services. Does that mean that I will do as well in 2010? Of course not. Well, the past several years have also been pretty decent in terms of percentage of closed trades that were winners, so does that mean I'll do as well in 2010? Of course not. I could do better, or not as well. Past performance, as they say, does not guarantee future results.

What works in the markets, I am convinced, are those things I write about and speak about regularly. They are the basic foundation upon which we try to build good trading plans and good trades. Things like cutting losses, letting profits run, managing money, having an exit strategy and actually following it, etc. Most of us have heard or read about these fundamentals, but as I have seen with seminar attendees and sometimes with personal mentoring students it is a failure to understand and adhere to the basics that results in disappointing trading.

Incidentally, for those of you who may be local to the Scottsdale/Phoenix area, I will be speaking to the Scottsdale/Phoenix Trading Group on the evening of Wednesday, January 20, 2010. Please say "hi" if you're there. Also, I will do some additional private coaching again in 2010. I try to limit that to one student a month so if you ever have an interest, please let me know as early as possible.

by Bill Kraft, Editor
Copyright 2010, Makin' Hay, Inc.
All Rights Reserved

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Anonymous said...

Hi Bill,
Great performance for Year 2009. Congratulation.
Appreciated that you could post the overall return for each services rendered.

Thank you

Bill Kraft, said...

Thanks, Anonymous. I definitely was not disappointed with the 2009 results.
Bill Kraft