A few weeks ago I was in Saudi Arabia.
I was there for my Hedge Fund, and something weird happened.
See, in Saudi Arabia, they don’t allow short trading. It’s against Shariah law.
So we had to run an experiment…
We removed all our short trades from our portfolio.
The result?
Our profits dropped by 50% instantly.
But it gets worse…
Our returns became wildly inconsistent. Like a drunk guy trying to walk a straight line.
Here’s the thing about my expensive “long-only” lesson some traders don’t want to hear:
If you’re only trading “long” positions, consistent trading can be very difficult.
It’s like trying to box with one hand tied behind your back.
Many long-only traders claim they get excellent diversification, but when the markets get ugly, they tend to suffer with ugly drawdowns.
Traders who want to survive long-term need to include Short strategies too.
If you don’t, you’re missing a BIG piece of the puzzle for protection and consistency.
This is why, in the PROTEGE program, we focus on balancing both Long and Short strategies in a portfolio. When you do it right, you get:
- smoother returns
- more consistent profits
- less stress while trading
If you’re just starting out, focus on creating long-only strategies in indexes first because they’re the easiest.
But don’t stay there forever.
That’s how traders get wiped out.
If you can, include short strategies too.
