Registered: Aug 2008
11-22-11 09:21 AM
Sad to hear that. Your journal was the most interesting one, not only because I follow a similar type of strategy but because you offered the most insight into the development process.
We've all had the "itch" to interfere and it's one of those things you just need to control. You have to be "perversely" disciplined about it, in that you have to have blind trust in your system. I guess since you were successful or at least a breakeven trader with your discretionary methodology, it gave you extra confidence which ended up hurting you when trading auto.
In my view, hedging is needed only in the following cases: drawdown sensitive fund managers who need to offset risk and are willing to sacrifice returns or when it's a part of the strategy. The proper way to hedge an RTM strategy is to use another trending one which more often than not wouldn't correlate, easier said than done.
Hope to see you going again in 2012.