Q/A - Any suggestions on following the WPT system?

Kerry,

I am having trouble mimicking the results of the WPT system. I am profitable for the year but nowhere near the how the system performed. Any suggestions would be appreciated.

I realize part of my partial result I was not able to take every trade.

Thanks!

This is a very good question and there is no great answer.

Rarely will anyone duplicate any system results precisely. Remember that the reason for me posting the system and tracking a public portfolio is to help show how to trade a system and follow it in a discipline way. I prefer to teach how to trade not be followed blindly. Regardless of the system duplicating results is nearly impossible. However it is there to show the potential of a system and results could be obtainable within a margin of error. I do not have enough data to suggest what that margin of error is, but I have seen results from others that were within 5% - 10% on both sides.

One client has reported much better results and this was due to the fact he caught trades I missed although his largest drawdown is also larger than the Discretionary Portfolio. This particular client has a much deeper risk appetite than I. I have seen other results that are within a small margin of error. How close one mimics the portfolio is determined how exact one trades the portfolio.

For example if you were to miss the two largest winning trades, the results will have a very different look. This month if one did not take the re-entry on SQM, you make $2,500 less in the portfolio. If you scratch SNDA and do not hold it, one makes $5,500 less. If you attempt to only trade one of the picks, you may pick the one that lost money and not trade those that made the money. My suggestion is take the model portfolio and learn how to build and develop your own system that you are the most comfortable with so you are NOT trying to mimic someone else. I would much rather see you develop yourself into the type of trader you desire to be with a system that works for you. Some traders find that the WPT approach works for them and they produce results very similar. Make sure you are not expecting the same results but trading in a very different approach.

Not long ago I worked with a client that had a very similar question and thought he was following the WPT system. After analyzing his account, he realized he was doing everything but following the system. He made trades that were never made, did not honor the discretionary stops and was not honoring the system stops. This allowed much larger losses than system ever encountered. In the end he found he was only haphazardly trading the list of stocks showing up on the WPT buy list and not trading a system at all. He was also position sizing in the trades incorrectly. He has since corrected many of these issues and since has found better results. He continues to admit he has some discipline issues and allowing losses to be much worse than necessary. I am recapping his story with his permission, he only asked for his name to be withheld.

Trading is NOT a get rich quick scheme. To be a Professional Trader takes time and education like any other profession. I have said many times, that no other profession in the world can we wake up one day and say “I want to be a Professional Trader” and within 10 minutes we can be in business trading.

I would suggest we arrange some phone consultations or an on-site visit may be worthwhile. We can conduct an account analysis and indentify what may be the road block to your success.

Thanks!

Kerry