The bottom chart from yesterday's post shows a combined three and a half year period. The four charts below show each individual year of MensaMonkey action (thick purple line) starting with a $10,000 initial investment. The thinner, blue line represents the movement of the SPY over the course of the year.
There's a few too many deep 'potholes' when the MensaMonkey either went the wrong way or couldn't correct quickly enough. Thank you Fat Finger May 2010 Day. But as they say, nothing ventured nothing gained. The 'ventures' are just a little too...adventurous.
The flat areas (purple line) in each year (beginning 2009, mid year 2010, and second half of 2011) show that the MensaMonk just didn't want to play in that environment, whatever that environment was. Maybe high volatility coupled with steep weekly swings. Nice to see some interesting decision making even if the decision was wrong sometimes.
This newest version seems to adapt somewhat better than previous versions, and I think that is key when developing a system that must adapt to changing market conditions. This system also hasn't succumb to the whipsaws in the market unlike previous versions. The IWM and the BND are used as 'fall backs' when the market environment doesn't not want to support the 2x QLD or QID anymore (in the 'eyes' of the MensaMonkey.
Let's see where the remainder of the year takes the purple line on the 2012 chart. Right now, it looks like all that is required is a little blind faith. Disastrous intra-trade drawdowns ended up recovering as long as the MensaMonkey was allowed to complete each trade.
Did someone say Blind Faith?
When one Winwood just won't do...
