What's Your Trading Style? by josephsavage

steemleo · @josephsavage · Jul 10 '19

$3.48

What's Your Trading Style?

My first exposure to Finance was when I was 13. We spent 30 minutes each day in homerun reading anything we want. After exerting my religious rights by bringing the bible to class every day... I started in on biographies. Martha Washington, Julius Caesar, Warren Buffett... and that was as far as I got. I was hooked and pivoted to reading every popular finance book available at the local library.

I read a lot of personal finance, a lot of high finance, a lot of finance-related drama (Barbarian's at the Gate, Liar's Poker). While I loved all of it, I found myself in the Value camp, reading a lot of Buffett, Ben Graham, Howard Marks... and there I stayed for 20 years.

Now, I don't know if you're aware of this, but factors trend over time, and Value has underperformed in the last 20 years. In fact, the last 20 years have been the *absolute **worst*** time period for Value... ever. In all of recorded financial history.Which is only 500 years, and the first 350 have terrible data and record-keeping, but still...

Throughout that period, I was a terrible undisciplined investor and while I occasional had big wins, I inevitably gave it back. My personality is not a good fit for a long-term value-oriented approach. Maybe I will share some of those stories down the road.

A couple of years ago, I finally got around to reading one Jesse Livermore. Now, you may or may not realize that Jesse Livermore is about as opposite to value investing as you can imagine. He follows trends, pyramids his entries, lets profits run, and reverses direction whenever he closes a position. He's a speculator's speculator. It's all very erratic... anathema to a value investor... and extremely effective.

18 months ago, I put together a trend-following strategy that's a blend of Jesse Livermore and Turtles (which I may cover in a future post). I tracked every single paper trade for the past 18 months and it proved extremely effective in some very difficult market conditions. I even did a few actual trades with it, and those have been mostly okay too.

Maybe I will give more detail later, but I don't want to give away the secret sauce, now do I?

![image.png](https://files.steempeak.com/file/steempeak/josephsavage/QL85OOaf-image.png)
The average position size in this sample is $800, and the average holding period is 15 days. Trading every entry to attain the Total Profit shown would require notional buying power of $150,000, representing an annualized return of roughly 19% This is a long-short strategy and there is slippage in the paper-trades tracking (actual trade execution would likely be different than documented). This strategy has never been properly back-tested.

Honestly, I'm finding that entries are the **least** important aspect of any trading system, though I'm already getting better win-rates in the more recent portion of the sample by improving my entries.

The holy grail is in risk management and discipline, and that's where the strategy excels.

## What's your trading style look like? Does it fit your personality?

<sub>(Everything included here is personal opinion. It is not financial advice. It is not legal advice. It is not even advice.)</sub>

👍 steembasicincome, sbi2, sbi3, sbi4, asgarth, steem.leo, sbi5, sbi6, sbi7, map10k, steem-ua, sbi8, sbi9, roleerob, sbi10, theghost1980, masoom, retinox, jk6276, brasan, achatainga, team-cn, steemitportugal, dylanhobalart, feedyourminnows, rishi556, theplayersclub, quintaesencia, trenz, accelerator, steemusa, alexjay, thedailysneak, hdu, ezravandi, votes4minnows, katysavage, stevenwood, man-o-war, dtrade, mastergerund, bluengel, muksihs, derangedinvestor, egginc.org, trailmakers, imisstheoldkanye, josephsavage, zmx, dlikeguy, marina007, minloulou, greenunion, pc-rewards, bunnymoney, lebey1, leothecat, downunder-doctor, grandmamomio, elviento, vaporrhino, tanlikming, jk6276.leo, frugal-fun, and 15 others

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@team-cn · Jul 10 '19

Thanks being awesome NBC holder! Your 3.00 NBC earned you 2% team-cn upvotes！

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@tts · Jul 10 '19

To listen to the audio version of this article click on the play image.
[![](https://s18.postimg.org/51o0kpijd/play200x46.png)](http://ec2-52-72-169-104.compute-1.amazonaws.com/josephsavage__what-s-your-trading-style.mp3)
Brought to you by [@tts](https://steemit.com/tts/@tts/introduction). If you find it useful please consider upvoting this reply.

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@steemitportugal · Jul 10 '19

re-josephsavage-what-s-your-trading-style-20190710t224859982z

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@roleerob · Jul 10 '19

$0.04

Love the "fine print" here @josephsavage ...

> *"(Everything included here is personal opinion. It is not financial advice. It is not legal advice. __It is not even advice__.)"*
>
> [emphasis added mine]

... as it made me smile.  It's been a long day, so I appreciated the opportunity to smile ... &#128522;

Seriously, it was interesting to read a brief bit of history about you and your investing experience.  In response to your question, I *want* to be a long-term, value investor, but ...  There seems to be so much going on in the world which undermines this conservative approach and all but forces us all to be much more speculative ... Far too much for this "old war horse," but ...  What can we do?

Fundamentally, "the system" appears to me to be *systematically* destroying the value of our money, hence the commonly referenced phrase in the "cryptosphere" to "fiat money."  And with our money's steadily advancing decline, seems we have to "run" faster and faster just to try and break even.  Let alone get ahead a little ...

Will this new asset class somehow be the answer?  Don't know.  But, along with you and many others, I suppose we are all "on board" to find out!

👍 sbi6, josephsavage

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@josephsavage · Jul 11 '19

$0.03

Thanks, I'm glad I could make you laugh. I originally wrote that disclosure in a comment at one point and I really liked it so it stuck with me. I'll use it whenever I write anything that could be construed as advice.

> There seems to be so much going on in the world which undermines this conservative approach and all but forces us all to be much more speculative

One of the things I like best about my trading style is it allows complete agnosticism. I'm trading with tight stops and don't have to hold strong opinions. Gold is breaking out? Great. Buy gold. Hold until it stops out. Move on. Now it's oil and Amazon and Pepsi? okay. Oops, pepsi stopped out, but Amazon is on a tear... 

From there it's a numbers game. Each win nets many more profits than each loss and allows a decent overall return, although the returns are very lumpy.

👍 dustsweeper, rishi556, elviento, osso

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@steem-ua · Jul 11 '19

#### Hi @josephsavage!

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Your **UA** account score is currently 4.452 which ranks you at **#2136** across all Steem accounts.
Your rank has dropped 9 places in the last three days (old rank 2127).

In our last Algorithmic Curation Round, consisting of 181 contributions, your post is ranked at **#61**.
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@improv · Jul 20 '19

What about the strategy helps you manage risk?

Posted using [Partiko Android](https://partiko.app/referral/improv)

👍 josephsavage

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@josephsavage · Jul 20 '19

Gradually revealing more about the strategy as time goes on...

👍 ezravandi, elviento

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