Here are the results for the 2017/2018 challenge.
1st place: Dennis G with +325% (Dennis you need to email me your address so I can mail out your prize).
2nd place: Miika K +159% (consolation prize 6 month subscription to the SMT, or $100. Email me your choice)
3rd place: Bob S +110% (consolation prize 3 month subscription to the SMT)
4th place Troy S +102% (consolation prize 3 month subscription to the SMT. As far as I know Troy is the only person able to control greed and actually make some money from the bitcoin bubble).
The SMT metal portfolio came in 5th with +100%.
Alexandru P came in 6th with +95%.
Next challenge starts on Monday. It will run until July 1, 2019. Here are the rules.
No penny stock trades. There’s too much risk of pump and dump scams in these things. Only stocks $5 or higher, I will accept ETF’s below $5 as some of these decay down to that level over time.
No options or futures. Leveraged ETF’s are acceptable.
You must email me ([email protected]) your trade entry or exit within one minute of taking it so I can verify.
I will respond back with confirmation by the end of the day. If you don’t receive a confirmation you need to resend me the trade in case it got lost in cyberspace.
You must include the percentage of your portfolio for each trade. I will only accept percentage, not # of shares. I will calculate the number of shares from the percentage.
No day trading. You can stop out for a loss on the same day but you can’t exit for a gain on the same day. I simply don’t have time to try and keep up with frantic day traders and realistically no day trader has any real chance of winning the challenge anyway.
The prize will be the same as this year. $500.00 to the winner, and consolation prices for the next 4 runners up.
I started the challenge to level the playing field. I got tired of the trolls taking shots at every short term wiggle that went against us and then going into hiding weeks later after the trade paid off. Now everyone has to play by the same rules. Make your trades in real time, no more of this hindsight trading BS that the trolls are so fond of. That crap no longer flies. If you want to criticize someone else’s trades then you better be prepared to make your own real time trades. What I’ve found most amusing as the challenge has progressed is that the most vocal and antagonistic traders on the blog have for the most part turned out to be the worst traders when they actually had to compete by the same rules as the rest of us that live in the real world. The best traders rarely ever posted on the blog. They just calmly went about the business of trying to make money.
The winning percentages for the top 5 traders were between about 65% and 70%, dispelling this myth of magical winning percentages in the 90% range. Seriously folks when someone tries to claim they win 80-90% of the time run as fast in the other direction as you can. They are trying to sucker you into buying a subscription to a newsletter. Probably one with “multiple scenarios” like most of the Elliot wave letters, or the vague maybe this, maybe that type of analysis you get with just about all other services. As long as one covers all bases they can always claim they “called it” when in fact they called both sides and then chose the correct one after the result became known. Not one newsletter writer except me had the balls to enter the challenge this year. I wonder if any of them will grow a pair for the next challenge.
It will be interesting to see if the winners this year can make it back to the winners circle next year. Consistent winning years are extremely hard to reproduce as what worked one year often doesn’t work the next. Strategies that performed well during one environment often fail miserably during a different environment. The traders that can adapt rapidly to changing markets are the ones most likely to continue making long term, sustainable gains. Those that fail to recognize when the market environment changes and can’t adapt are doomed to failure in the long run.
Since the bear market bottom in 2016 the SMT metal portfolio has adapted and stayed ahead of the market and in the process racked up consistent profits. Starting with $100,000 in January of 2016 the metal portfolio is now worth $480,000 and currently at an all-time high (remember the emails recently chastising me for a minor 3% draw down as we tried to get our contrarian trade entered? How stupid do these fleas look today?). The Quest portfolio is up 1360% in the last year (option trades are not allowed in the challenge though).
We don’t win every month. Sometimes we even go multiple months without making a dime (this is the period where the trolls crawl out from under their bridge, only to disappear back down their hole when we start making money again), but over time we are consistently growing the portfolio. And in the end that’s all that matter’s: Is the portfolio growing over time, stagnate over time, or losing over time.
For the vast majority of traders it’s the second or third. Most traders win big, then lose big, over and over and over. Ultimately they make no long term gains. Or they win big and then lose it all. Most dumb money traders lack the patience and focus to stick with a strategy that makes consistent long term gains. They usually just chase the current momentum fad. That kind of strategy just ends up getting them trapped at tops (or bottoms) when the momentum fails. To really make consistent long term gains you need to become a contrarian. But as we’ve seen over and over that is a very tough strategy to maintain in real time. It requires a different kind of person, with a different kind of mentality. One who can ignore the herd as they chase the last few penny’s of a trend and then get caught at the top or bottom. A contrarian needs to ignore the short term and focus on the long term game plan. I’m often early to a contrarian trade, sometimes by weeks. But in the end contrarian trades are what have grown the SMT portfolio’s consistently over time.
So Monday morning we’ll start over again. Everyone will have a fresh $100,000 and we’ll see if any of this years winners will be able to make it back to the winners circle next year.