Although I do all my own programming in Excel for VBA (Visual Basic for Application) I’m not a software guy. I don’t offer/sell software with my models.
Each model comes with its own manual that fully discloses all the trading rules. Nothing is hidden or held back. In addition each model comes with a complimentary 30-day subscription to a Daily Study Guide where owners can watch the developer (me) trade the model with real money, in real time, in real markets. This practical daily demonstration of the model helps to reinforce traders’ knowledge and understanding of the trading rules.
I should also say I do provide a complete trade history for each model in excel to help owners validate the strategy.
However you have to understand I’m not familiar with the current back-testing packages available today. Although I owned Trade Station 4 back in the 1990s I only opened it a few times to realize that Easy Language didn’t look that easy! So I went off and taught myself VBA (Visual Basic for Applications) for Excel.
But if I can help, I will.
Please refer to each strategy’s “Quick Facts” where I summarise the number of variables each model has.
This is because people can’t “unsee” trading rules.
Although they may be able to return a manual, they'll never be able to erase my models’ simple rules from their memory.
So it's almost impossible for people to truly "give back" their purchase for a refund.
I wish this could be otherwise but unfortunately it can’t.
Despite my early start I only commenced making money when I became totally mechanical in the late 90s.
I wouldn't call myself an expert system designer (and would be suspicious of anyone who did, except Larry Williams and a few others, since in this game you’re continually learning) however I've collected enough knocks and battle scars since 1983 to know what certainly does NOT work, and what does have a small edge.
In addition, many of my models have been released now for many years with positive out-of-sample performance which is a rarity in this business of trading.
I strongly recommend owners to complete their own back testing to validate a model’s performance before they consider trading it.
I encourage people to do this for two reasons.
Firstly, they need to prove to themselves the historical performance is correct.
And secondly, and more importantly, they need to build up their own belief system that the model in question has an edge.
If people do their own backtesting and validation then they'll have more confidence in continuing to trade a model, even when its in drawdown.
All my patterns are based on end of day bars as represented by the daily Open, High, Low and Close.
All my models and newsletters work off end-of-day data.
Patterns and orders cannot be prepared until a current session finishes.
Orders are then prepared for the following day’s session.
All orders are basically set and forget for the next session where they can be either emailed to a Client Advisor or entered into an online trading platform.
As you know there are no guarantees any pattern/strategy/model will continue to perform into the future as well as they have in the past. That’s an unfortunate fact.
As traders we can only hope to avoid the twin evils of strategy development, curve fitting and data mining. I believe my strategies are absent of both.
However, that is just my opinion.
Proof or evidence is far more powerful then opinion, even when its mine with my many years of experience since 1983.
The singularly most powerful proof of robustness of any pattern/strategy is its out-of-sample performance. Period. Nothing else comes into the equation. It’s all about out-of-sample performance.
Out-of-sample performance is so important and so valuable because it’s a very rare occurrence when the majority of strategies fail to survive past their first anniversary.
It’s an unfortunate observation that the field of technical analysis is better known for its failures than its successes. With over 90% of active traders losing it paints an unflattering picture. Yes, I know strategies aren’t the only reason why the majority lose. However it’s one of the biggest contributors. Traders do inadvertently trade overly optimised negative expectancy strategies. So any positive out-of-sample performance is a rare occurrence and is more valuable than your first home deposit.
So the biggest proof of robustness is positive out-of-sample performance.
As you’ll see with my models the majority have been released for many years now with positive out-of-sample performance where IndexTrader, my oldest, is still going strong since its release in 2001.
So there’s the evidence my models are robust and not overly curve fitted to past data.
However I can offer some high level observations. But please remember what I share does not take into account your own particular needs, financial situation and investment objectives. If you like what I share you will need to determine with, or without the assistant of a person licensed to give personal advice, whether my observations are appropriate for you given your own particular needs, financial situation and investment objectives.
Please refer to my STARTER MODEL page.
Firstly, the question falls into “personal” advice which I’m not licensed to give.
And secondly, not every trader is the same in regards to their;
• Risk appetite (drawdown),
• Financial position,
• Investment objectives,
• Preferred markets they trade (sahres, indices, currencies, commodities, energy, metals etc),
• Preferred securities they trade (Shares, Futures, CFDs, Options etc) and the
• Margin requirement for their preferred markets and securities.
All these factors will impact the size of an individual’s trading account.
So for me to suggest an appropriate account size is difficult.
Please refer to my ACCOUNT SIZE page.
- Goldstone Global Capital Group,
- JB Markets &
- Bell Commodities.
- Interactive Brokers.
For my universal portfolio I usually roll my positions when my data provider (Premium Data from Norgate Investor Services) rolls over their contracts. They attempt to rollover when the next contract’s volume surpasses the spot contract’s volume.
This business of trading is a continual learning experience that never ends.
If I see where a change will improve a strategy I'll incorporate it, absolutely.
If the change occurs within the first 12 months of their purchase I’ll let them know with no charge.
After 12 months, depending on the nature of the change, I’ll offer the improvement through a Daily Study Guide subscription.
There were several reasons behind why I decided to release my first model SpiTrader to the public back in 2001.
Firstly, my initial motivation was to make available a robust methodology for private traders.
As experienced traders know private traders have been, and still are being taken advantage of by slick promoters peddling trading courses/systems/software/robots that have little value.
The catalyst for me to release a system was a very public run-in I had with a well known Australian trading educator and purported professional trader in the later 90's. This person had previously been the General Manager of Australia's largest retail trader education company and in his bio he'd would always boast about having personally trained over 10,000 traders!
Anyway this clash occurred on the WaveTraders forum and was very public. This person was, in my opinion, talking up a well publicised methodology which had no practical value except to sell books and trading courses. I took exception to this in that his spin had probably sent all the "newbie’s" on the forum off on a wild goose chase when I felt this person also knew it had little value and in all probability did not use it himself in his own trading (if in actual fact he traded at all?).
The only benefit I could see that he gained from the spin was to promote himself as being knowledgeable to the less knowledgeable members.
I was so fired up that I declared on WaveTraders that I would go off and get myself licensed by ASIC, make available to the public a trading methodology (which was SpiTrader before its name change to IndexTrader), trade it myself and make available my real time results.
By doing so I hoped, and still do, that it will encourage all other genuine promoters of trading courses/systems/software to actually follow/trade/use/implement what they push...i.e. walk their talk.
Secondly, I offer trading models, or complete trading education, for the same reason why I trade, to make money. It’s a good business. It has also offered me the opportunity to travel and present to traders throughout the Asian Pacific region, which has been fun.
Thirdly, I derive great satisfaction in doing something not many others can do. That is to demonstrate with real money in real markets in real time that I trade what I sell/teach/offer/promote/push etc. Not many strategy vendors can offer a complete trading education solution for a particular part of market structure (i.e. a model) and then allow students to watch them trade the strategy in real time, with real money in real markets as they learn, comprehend and fully understand the methodology. I do. Few can. Many can’t.
And finally, it keeps me busy and allows me interaction with people. Trading, once you have an edge, particularly when you’re systematic/mechanical like myself, doesn’t take much time each day. So my education business helps to keep me busy and helps pass the time.
• IndexTrader (2001)
• IndexALERT (2004)
• Key Level (2008)
• Key Breakout (2009)
• ForexALERT (2009)
• Key Swing (2010)
• Key Exhaustion (2010)
The reason why they’re hypothetical is two fold.
Firstly, as traders we need to know whether the strategy we wish to trade has a 0% ROR and edge, or positive expectancy – regardless of how good or bad a market will be at a particular time or how good or bad our broker is in executing our orders. The hypothetical results calculate the metrics we need to know. Also - I only trade very liquid markets so there is every likely hood the hypothetical trades would have occurred - the question then becomes slippage. For conservatism you certainly could estimate more for slippage if that would make you more comfortable.
Secondly – owners/subscribers (those fully paid and those taking up a free 21-day trial) are able to watch me personally trade live everything I offer through the Daily Study Guides and newsletters – so they do get to see my fills – entries and exits – my real time results.
But just because they’re hypothetical doesn’t mean that I don’t trade the models as I do and I do share my actual fills. They may not be shown on the web-site but traders who engage with me on a daily basis through either the Daily Study Guides or newsletters do see all my results.
I should also say that for 10 years I did make available my IndexTrader real time results which I traded in a separate account with MF Global. Please refer my INDEXTRADER page for more details. In a nut shell, following MF Global’s demise I decided not to operate separate accounts for three reasons.
Firstly, when I was starting out in 2001 I knew I had to do something different as I was a newbie on the education front. So I set-up a separate account to trade IndexTrader. In 2011 when MF Global went out stage left I was in a different position and was much better known. So I didn’t feel I had to show my real time results to prove that I trade.
Secondly, I wasn’t keen on continuing to undertake the additional administrative work required to operate separate accounts.
And thirdly, I was still offering real-time results anyway through my Daily Study Guides and newsletters as I personally trade everything I offer from my web-site.
I should mention here that I also provide a 90-day live trading element to my Workshops where attendees get to watch their teacher (me) trade live in real markets with real money the strategies they learn. I’m not sure of anyone else who does that for 90 days.
I'm not sure.
In theory if every trader wanted to enter where I did then we wouldn't have a market (since everyone would want to buy/sell at the same level). However the number of traders who engaged with me is so miniscule when compared to the size of global markets that I don’t think it will ever be a problem. However if it did then I’ll just remove the models from my site.
However students of mine do use several packages that you may like to review that include;