The Official Kicking Myself Thread

[grems8544]

I actually think that this thread will be successful, provided people feel "comfortable" with an entry which has their name attached. Here's the rationale:

Many of us, myself included, despite years of "doing this", still are learning/following/adapting. This game constantly changes, and that theme is the only constant that I think I can acknowledge. I think we all can learn from each other's mistakes, and to this end, it will identify common areas that need to be discussed and rationalized away so that we can become better surfers ...

For me, with a system that is not of my creation (e.g. the Robots), I always am suspect at

1) back tests that I did not run myself,
2) analysis that the authors performed but which has not been acknowledged openly (not because of hiding anything, but simply because of the desire to present clear, concise data and sometimes other analysis detracts from the main message),
3) how much capital should be committed

#1 arises because I am a voracious backtester; I have my own methods, and I know my methods are the best <you're supposed to grin here>. This is a terrible bias that must be overcome within my head, and it isn't easy.
#2 arises out of pure communication -- teaching requires conciseness and clarity, and a thorough understanding of the subject matter. This means far more information is processed before it is communicated, and this is a natural step in dissemination. Again, "playing catch up" always leaves me feeling exposed, and when it's my capital at risk, it's hard to cross this particular chasm.
#3 is an ongoing battle for me -- all I can say is that I'm starting with a few hundred shares and I'll increase the amount as my confidence goes upward.

So, with this latest round, I had multiple positions on with IWM in multiple accounts. If you recall, we had several days where the signal was strong, and correspondingly, I picked up 100-sh block entries each day (6/10, 6/11, 6/15) using a combination of the levels recommended as well as my own discretion. On 6/22 I decided to sell for modest gains @ 80.46, leaving only 100sh each in my various accounts. There was no "reason" to sell, I simply had been hit hard with other mean-reverting strategies in the plummet from 6/1 to 6/13 and I needed to recover (fractions) of those losses.

Of course, with hindsight being 20/20, had I *strictly* followed the Robot trades, I would have made back a good portion of my 6/1 - 6/13 losses.

The lesson learned for me: Follow the Robot signals mechanically. The monies allocated within my Robot trades stand alone, and they cannot be influenced by the entire portfolio positions. So, for a $100K account, if 50K is allocated to the Robots, then the other 50K stands alone. I know this, I've practiced this, but in reality, it has been a hard rule to internalize.