Q2 2014 Strategy Report - Volatility Trading Strategies

Updated: Dec 6, 2018

Although we had another great quarter of trading, to be honest the trade signals were so consistently positive and easy to interpret that I can say with confidence everybody and their dog would have made a nice profit last quarter trading the XIV.  

The XIV itself was up a lot so of course many traders were as well.

You aren’t a subscriber because we make big profits when everybody else does as well.  You’re a subscriber because we reduce drawdowns when others don’t.  I know I’m probably starting to sound like a broken record, but the key to long term investing is not big wins.  Anybody can do that when conditions are right.  The key to growing our retirement funds over several decades is avoiding disaster.  Negative periods drag down fund returns far more than positive months help it.  Let me leave you with a basic math problem that will illustrate why avoiding losses is more important, and worth the small price of subscription to Volatility Trading Systems.

If you make 50% this year, and lose 50% next year, are you even?

No right?  10,000$ grows to 15,000$ after the big first year, but that 15,000$ is reduced to 7,500$ after the losing year of equal magnitude.  If you have a big drawdown you need a stretch of extra large wins to make up for it.  Our philosophy here is, why not just avoid the big losses altogether?

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