HISTORY OF TACTICAL TRADING
The Journey of Tactical Trading: Unveiling a Mathematically Perfect Solution
It was a bright morning in 1992, and as I perused Investor’s Business Daily (IBD), I stumbled upon a captivating advertisement. It claimed to offer a “Mathematically Perfect Algorithm” that could solve the elusive random walk problem. Intrigued by the possibilities, I clipped the ad and saved it for later exploration.
Weeks later, I came across a two-page advertisement from the same company, showcasing a stock position management system. Unlike the typical black-box stock picking or charting software, this system provided a comprehensive approach to managing stock positions. I delved into the details and realized that the system’s effectiveness was entirely disclosed in the ad itself. The only aspect requiring purchase was the accompanying software, which automated the process.
Eager to explore further, I obtained the demo disk and loaded it onto my computer. Though the software was rudimentary by today’s standards, I quickly grasped the logical mathematics behind the position management system. Through paper trading, I verified that it indeed delivered on its promises. Recognizing its potential to enhance returns for my clients and create a new revenue stream, I was determined to incorporate it into my money management firm.
However, at that stage, the system was not refined enough to confidently introduce to clients. Still, I saw the solid foundation it possessed and believed I could enhance it further. Taking the initiative, I met with the owner of the software, Peter, and his developer where we discussed it’s development and potential. It became clear that their lack of expertise in the stock market hindered their development progress.
Sensing an opportunity, I offered to buy Peter’s company. Although he initially proposed an exorbitant price, we eventually reached an agreement. Instead of purchasing the company outright, he would refer buyers of his system to me for trade execution, and in return I would share my live trading experience and insights with him. Thus, our partnership began.
For years, Peter and I engaged in daily conversations, exchanging examples of successful trades and valuable feedback. I actively traded the system for numerous clients, gaining a deep understanding of its nuances, strengths, and weaknesses. While it primarily operated on stocks, both long and short, it also showed promise with options, particularly LEAPS. Thousands of trades were executed through the system, solidifying my role as a crucial contributor to its evolution.
As technology progressed, the system’s software became outdated, and Peter had no interest in modernizing it. Consequently, the system’s sales slowed, and my client base dwindled. The computer-based system was no longer feasible to pursue, and Peter’s passing in 2002 meant the end of an era.
However, my journey with Tactical Trading continued. I persisted, employing spreadsheets to track trades and system parameters. In 2008, during the stock market crash, the system went dormant for a few years. But with technological advancements, my interest in developing online software to run Tactical Trading resurfaced. I aimed to connect it directly to online brokers through API integration.
Before introducing the online software, it is crucial to grasp the system’s intricacies, understand stock selection, and master position management for exceptional profits. This knowledge base does not guarantee instant riches or serve as a comprehensive guide to stock trading. Instead, it offers a mathematically perfect solution to stock transaction timing, capable of significantly enhancing investment gains beyond traditional buy and hold strategies.
Join me as we unravel the power of Tactical Trading and embark on a journey that could transform your approach to investing.