I have to share something with you that completely shocked me.
It was something that me and my hedge fund team never really considered much, but it had SUCH a drastic impact on our trading results in 2020… and I want to share it with you today because it could be hurting your trading strategies too.
You see, at the end of 2020 we did a full analysis of our trading results…
And to my unpleasant surprise, what we found was…
a SIGNIFICANT difference in theoretical performance compared to live performance.
Not just a small difference, but a BIG difference.
To give you an idea, this was how the performance of one of our CTA’s programs should have looked. (Including reasonable slippage and commission we currently have for our trades):
And this was the reality in LIVE trading…
Notice that flat period at the end of the 2nd chart? Live trading was almost flat for this CTA, when the backtested results indicate the results should have been much better.
So, we dug into the results more and discovered the issue was with a specific way our trades were being executed. It was like a “silent killer”, hurting our results without us even realizing it.
And what was even more shocking was we’ve implemented a specialized execution engine in our Hedge Fund that gives us much better executions than retail trading, but still, our executions were suffering.
For retail traders, this execution issue could be even worse. That means this specific problem could be hurting your very own trading strategies right now, and you may not even realize it!
So what’s the solution?
Firstly, make sure you compare your live trading results to your backtest results, to see how much difference there really is. And even if you’ve been lucky and not seen too much difference yet, consider how your trades are being executed and the potential pitfalls of that.
Secondly, make sure you get the Feb 2021 issue of the “Empowered Trader Club”, where I go into the exact details of this execution problem, and share some solutions to make your trade execution (and strategy performance) even better. I also include the simple solution we’ve implemented in my Hedge Fund that you can also use to improve your own trading right now.
Plus, we’ve included a special Bonus video training that goes into more practical details, so if you’re already an Empowered Trader member, look out for it in your mailbox in the next few weeks.
If you’re not an Empowered Trader member yet (or don’t even know what it’s about), you can find more details here.