We are throwing away hundreds of strategies that made us a LOT of money.
Seriously.
When I launched my hedge fund a few years ago, it was with a big database of exceptional, high-quality breakout strategies (all built with the framework I share in the Breakout Strategies Masterclass).
We used these strategies to create portfolios to launch our hedge fund.
But now, some 4 years later, all these strategies are TOO OLD already.
Although many of them keep making money, some of them still a lot, they still belong to the strategy graveyard. Because here’s the sad truth:
In today’s markets, even the very best trading strategies have a shelf life.
And that shelf life is getting shorter and shorter every year.
So, from time to time, we simply have to throw all the strategies away and start over again, with better strategies that are fresher and more suitable to the current market condition. In fact, I should have done this in my hedge fund at least 2 years ago. But I wanted the new generation of strategies to be significantly BETTER, so we implemented some cool new stuff and it took more time than I anticipated.
But now it’s all done (and they’re gone). Hundreds of spectacular strategies are resting forever (RIP) and all the portfolios are being upgraded with new strategies from our database (currently around 700+ strategies and new ones are being produced every single day).
In fact, here’s a combined equity curve of the 700+ new strategies (red line before commissions, blue line after commissions, all are Out-Of-Sample compiled data, no In Sample included). I always say that if we could be at least half that successful in live trading them, we can call it a huge victory.
But only the future will tell.
For now, I’m very happy we finally did it. All our CTA portfolios are going through this serious upgrade, and brand new CTAs are in the process of assembly too.
And the biggest lesson for anyone, including beginning and more advanced traders?
| 1. | Strategies have very limited longevity and it’s getting shorter and shorter every year. |
| 2. | The only way is to keep producing new, powerful, robust strategies all the time and keep updating your portfolio frequently. |
| 3. | Fortunately, all these can be automated too, so there is no stress, no rush (if you want to know how I personally create my powerful breakout strategies, watch the free 14-day breakout strategy challenge). |
Happy trading!
Tomas
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