The System That Won’t Lose

Aug. 12, 2020

For the past several weeks, we’ve been working on starting a system from scratch. It’s been fun and I’ve gotten some great feedback.

I’ve also gotten some requests to buy individual robots. Normally, I only offer Memberships that are all-inclusive.

So, this week I thought we’d look at 3 simple systems. I’ll go over the systems, so it’s also possible to trade them manually for free.

Recently, I got an email from a Newsletter subscriber telling me about a 100% winning system that he’d found from an educator online.

My first response is: No system is 100%. It’s a scam!

[When I say that, it makes me feel virtuous.]

But that’s a lie.

One hundred percent winning systems do exist. But ones that win slightly less than that are better.

Here’s a system on the ES futures contract.

How did it do during the Pandemic? Did Covid ripped it apart?

Not at all.

Here are the good things about this system.

Below is the Performance Report since 2000 (trading 1 contract with trading costs built in):

On the right side, you see the “Percent Profitable” is 75%.

And here are the Annual Returns:

It made it through the horrendous 2000-2002 period and also the meltdown of 2008.

What’s the problem?

One problem: I’ve never traded it live. Trading costs have been built in, but I have no idea how it trades in real life. Maybe the fills would be bad. Maybe dealing with rollover would be bad. [Although the trades are so short, it appears rollover is mostly a non-issue.]

Two, it doesn’t have a stoploss. It gets in on the Daily chart when the RSI (2 Length) goes Oversold (10) and it’s above the 100-day simple moving average, and gets out when RSI goes to Overbought (70). That’s kind of scary.

Three, it doesn’t make a million dollars. But it does have good years.

Four, it doesn’t win 100% of the time. But it does win a lot.

Maybe something like this could help a portfolio. Or maybe it would be a good place to start some research.

If interested, you have the settings.

In our next newsletter, we’ll look at another simple system.

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Talk to you soon.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.