A topic we haven’t discussed, but should discuss —
[U]A Prerequisite for [I]successfully[/I] Trading the MG99 Portfolio Methodology[/U]
Summary: In order to be successful trading a [I]portfolio[/I] of swing trades, I believe you must first become successful trading [I]individual[/I] swing trades, one at a time.
Several months ago, I got a PM from a friend here on the forum asking my opinion on the MG99 Methodology. I think the answer I sent him might be of interest to others on this thread. So, rather than write a new article on the same subject, I’ll copy-and-paste his question and my reply to him.
[B]Q:[/B] I am almost through the MG99 24/7 trading methodology thread where you appeared for a short-time with some trading results but then disappeared. Can you please tell me your opinion on it? Do you use the method?
[B]A:[/B] You asked about the MG99 methodology. Yes, I believe that methodology is sound, and I continue to trade a portfolio of swing positions. I would recommend the MG99 methodology to any [I]successful[/I] swing trader or position trader. The key word in that recommendation is “successful”. If you are a consistently profitable swing trader, or position trader, then building a portfolio of your typically-profitable trades can leverage your overall results, without exposing you to unacceptable risk.
I don’t think that point has been made in the MG99 thread, and it needs to be made. It’s my impression that many of the participants in that thread think that the MG99 portfolio methodology is some sort of magical shotgun approach that will capture the winners and avoid the losers. But, it doesn’t work that way. If you can place [I]a string of winning trades,[/I] one-at-a-time, then combining a bunch of them in a portfolio is a good thing. But, if your individual trades are mostly losers, then lumping them together in a portfolio will just accelerate your losses.
So, the take-away message is this: First, develop your skill as a swing trader; then, take your swing trading to the next level, by employing the portfolio methodology.
For many years, I was strictly a day-trader — I wanted to get into and out of every position during the London session, trading the 1-hour, 15-minute, and 5-minute charts. But, after years of staying up all night to trade that session (from 3am until noon, my time), I was tired of it. Swing-trading, based on daily charts, started to appeal to me more and more. Now, it’s the only way I trade.
When Mastergunner99 introduced his portfolio methodology, I was skeptical about the potential for over-exposure and over-leveraging. But, after seriously studying the risk factors involved in his methodology (which I detailed in his thread), I became a believer.
For a while, I played around with posting my portfolio trades, but I found that trading “in public” really didn’t suit me. I guess that’s why I drifted away from the thread. Almost everyone else has drifted away from it, as well. And that’s a shame, because Mastergunner’s methodology can be a great tool in the right hands — and his thread is the only place where such an approach is discussed.
If your swing trading is ready to move to the next level, then give the portfolio methodology a try.
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Glad it was only play money. It would be a bummer to lose a lot of real money right before Xmas.