Futures Top 10 Trading Systems

Discussion in 'Automated Trading' started by Sanjuro, Feb 8, 2006.

  1. Sanjuro


    I was reading my Futures magazine about the Top Ten Trading System and they looked interesting.

    For paying 1-2k for a trading system, you could get these great long term systems averaging over 40% a year.

    I researched into some of the systems like CheckMate and ReadySetGo. I look at their performance and then I went to some Systems Brokers who ran those systems but their actual results are Far from the hypothetial performance.

    For Example, Dean Hoffman says his personal account is up over 200% last 2 years. I looked at the last 1 year performance of CheckMate, Interplay, Fusion at Attain System Broker and those systems were like up 10% last year. And the hypothetical results were suppose to be like 50%.

    My question is...
    Is it really possible to pay 1-2k for a system and have a systems broker make 20-50% a year with that system for your capital?

    Why is there such a difference between the hypothetical results and the actual performance at system brokers? I thought commodities were liquid and slippage was limited.

  2. tomhaden


    I read that same article from the Feb 2006 issue of Futures by George Pruitt and Joe Bobek.

    Most of the systems sold are a scam when it comes to results. i.e. Abberation/I-master is a complete failure.

    If you want to know the basics of how most of these systems work, buy George Pruitt's book: http://www.amazon.com/gp/product/0471381357/

    Also check out the following threads on Abberation and Dean Hoffman/Checkmate:
  3. I'd like to offer a quick comment. First, it is very difficult to code a daytrading strategy that is consistently profitable for Index Markets like the S&P. On a longer time frame it becomes a little (I emphasize " little ") easier. The trade off seems to be drawdown.

    Prob #2....Many systems are coded to take advantage of a historical tendency. The problem is that historic tendencies tend to be seasonal. The are there one month (or one year) but not the next.

    Prob #3...System developers do not look at basics like stationarity. If they did, they wouldn't be able to produce so many crappy systems. Consequently they wouldn't make much money. Some of you can see where this is going.

    These problems can be mitigated somewhat by trading multiple systems. Diversification conceals a multitude of sins.

    Final comment.....retail traders cannot withstand significant drawdowns. They are often badly capitalized to begin with, and they will tend to abandon a system that shows consecutive losers. I figure most retail traders would abandon a system that went 8-10 losers in the red, no matter what it cost. What the original poster learned is that actual profit is different from projections. Unfortunately this is true of drawdowns as well. Bottom line... once a system starts to exceed projected drawdown, retail traders are out of there...game over.
  4. 1/ I would suggest that you ask for most recent test results and compare them with historical results. Eventhough 1k is not that much, I would be very skeptical of any advertised claim. Ask them for a free trial and then judge according their response.
    I have been collecting trading systems and methods since 97 and can tell you that there is very few profitable systems averaging 20% + over 5 years with real money. Forget 40% over 5 years , it exists only on the paper.
    2/ If you pick correct system for that year trading environment, yes. Problem is you do not know what price action will be like in the future.