Trading Strategy of the Week: ConservProfit
Any results mentioned or shown are based on simulated or hypothetical performance that have certain limitations. See bottom of this post for full disclosure and important warnings. Past results are not necessarily indicative of future results. Most people lose money when trading. These results are based on statistics that were current as of January 23, 2017, when this profile and article were edited.
Update: As of May 15, 2017, this trading strategy is no longer being managed or accepting subscribers.
For the first TSOW of the new year, we spoke with Collective2 Trade Manager Glenn Grider, discussing his strategy “ConservProfit.” View summary statistics, including hypothetical monthly returns and subscription costs, inside Collective2.
Trading stocks is so boring, it’s one step away from being dead. For Glenn Grider, forex is where the action is.
How he trades
“ConservProfit is a forex trading strategy. I use a combination of manual trading (based on fundamentals and technicals), and automation (using MetaTrader4 software). I chose a few high performing technical strategies, and combined them with manual trading based on my own experience and research. It’s just me — no team of researchers — no other traders helping me.
There’s nothing fancy here. I watch support and resistance points, trend lines, and other technical indicators. I study the news avidly — both political and financial — anything that might affect currencies. I do a lot of internet research. In forex trading, volatility is your friend. I’m always on the lookout for events that will create large spikes and dips in which to set up my trades. If a pair is trading sideways, there’s not much point in trading it, unless I think that is about to change.
I typically trade only the major pairs (GBPUSD, EURUSD, AUDUSD, EURJPY, USDJPY). The “majors” offer more liquidity and tighter spreads than the exotics. And of course there’s also a lot more information out there regarding the majors. If you believe that your edge is being able to process information more accurately than the majority of other traders — as I believe about myself — then having more sources of raw information rather than fewer works to your benefit.”
“ I don’t think it’s an accident that older people in their retirement years focus on investing in stocks. Maybe it’s a subconscious thing — like you’re preparing for eternal sleep by trading sleepy, boring financial instruments. But that’s not for me. I want excitement. ”
“I was born in Allentown, Pennsylvania. I have degrees in Biomedical Engineering Technology and Mathematics.
I began by trading stocks, but — honestly — trading stocks is about as exciting as watching grass grow. Mutual funds… index funds… stocks… maybe they are appropriate for retirement planning, but there is not much action there.
I don’t think it’s an accident that older people in their retirement years tend to focus on stocks. Maybe it’s a subconscious thing — like you’re preparing for eternal sleep by trading sleepy, boring financial instruments. But that’s not for me. I want excitement. I don’t remember how I discovered forex trading, but once I found it, I was hooked.
I like the fast price movements and the quick developments. Of course there’s more risk — lots more risk — but I welcome it. Risk is what allows me to potentially achieve better-than-boring returns. Risk means I need to be prepared to lose money — maybe even all of it. In my case, I think the trade-off of risk versus reward is acceptable. It may not be appropriate for everyone; that’s for sure. You know how they say: Do not trade with money you can’t afford to lose? It’s true. If you’ll be hurt by losing money, forex trading is definitely not for you.”
About following well-known “rules”
“I don’t follow all the well-known trading rules because usually they’re wrong, and sometimes they backfire.
For example, everyone knows that natural disasters are bad for the currencies of countries where they take place, right? That’s a well-known rule. Except, it isn’t true. In fact, the exact opposite usually occurs. Repatriation of funds flow into the country to rebuild damaged infrastructure, and this causes a currency to rise. ”
Regarding stop-losses: I always use them. Any major news can spike any pair. (Editor’s Note: stop losses may not limit losses in all market conditions.)
Some managers say that a stop loss ultimately limits profits. I strongly disagree. Not having a stop loss inevitably leads to a Martingale trading strategy — that is, the continual doubling down on losses — and that, in turn, destroys accounts.
Now, look, just to be clear — sometimes my automated strategies do stack trades in the same direction, but without increasing lot sizes. Sometimes this group of trades will stop out in a loss simultaneously as a group, but the strategy survives. So far, anyway.”
What he like about Collective2
“As a forex guy, I’m familiar with some of the so-called “social trading” companies, mostly based in Europe. I prefer the Collective2 way of doing things. Collective2 lets me charge a flat monthly subscription fee for my strategy, rather than marking up spreads or charging extra commissions. This is the most transparent, fair way of doing things, and it doesn’t create perverse incentives for strategy managers. On those non-US platforms, strategy managers might be encouraged to trade no matter what, simply to make money for themselves from commissions, even if the trades aren’t in the best interest of the subscriber.
There are other aspects of the Collective2 platform I appreciate. I like the fact that you can trade almost any instrument class. I like that you can price your subscription however you want. I like that you can reach traders all over the world, and attract them to your strategy. When I came to Collective2, I started with zero followers, but once I began to perform, the C2 Platform did its job and brought me new subscribers every day, like magic. I recommend C2 highly.”
Past results are not necessarily indicative of future results.
These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.
In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program, which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.
Material assumptions and methods used when calculating results
The following are material assumptions used when calculating any hypothetical monthly results that appear on our web site.
- Profits are reinvested. We assume profits (when there are profits) are reinvested in the trading strategy.
- Starting investment size. For any trading strategy on our site, hypothetical results are based on the assumption that you invested the starting amount shown on the strategy’s performance chart. In some cases, nominal dollar amounts on the equity chart have been re-scaled downward to make current go-forward trading sizes more manageable. In these cases, it may not have been possible to trade the strategy historically at the equity levels shown on the chart, and a higher minimum capital was required in the past.
- All fees are included. When calculating cumulative returns, we try to estimate and include all the fees a typical trader incurs when AutoTrading using AutoTrade technology. This includes the subscription cost of the strategy, plus any per-trade AutoTrade fees, plus estimated broker commissions if any.
- “Max Drawdown” Calculation Method. We calculate the Max Drawdown statistic as follows. Our computer software looks at the equity chart of the system in question and finds the largest percentage amount that the equity chart ever declines from a local “peak” to a subsequent point in time (thus this is formally called “Maximum Peak to Valley Drawdown.”) While this is useful information when evaluating trading systems, you should keep in mind that past performance does not guarantee future results. Therefore, future drawdowns may be larger than the historical maximum drawdowns you see here.
Trading is risky
There is a substantial risk of loss in futures and forex trading. Online trading of stocks and options is extremely risky. Assume you will lose money. Don’t trade with money you cannot afford to lose.