Tuesday, November 29, 2011

Very bearish action as stops are blasted...

We can see in the charts below that these very highly watched patterns have resulted in yet another highly frustrating result. In an era where people are continuously focused on managing losses rather than profits, this behavior is should be expected. The action in the euro was especially unhealthy…I have often referred to the over use or reliance on stops as a driver of sub par performance…people who are trading in this style are producing absolutely horrid results…which I have shown a sub sample of below. The managers in the list are trading systematically and are struggling mightily because they are approaching the problem entire from the wrong direction. Meanwhile, for this month alone, I am up significant double digits…I think this points to that when everyone trades the same and additionally when everyone wants to avoid risk…the create new risks.
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