hi I am considering purchasing this system. It trade the emini russell 2000. http://www.investmentresearch.biz/index.html anybody try it or know of anything?? Any comments is welcome.
Please keep in mind that what looks great historically based upon backtesting does not necessarily mean it will work as well in the future. In fact it is more often the case that it will not work successfully in the future. If it did then why would he be selling! :eek: Often this is because the historical results are optimized to produce the best results. Did he include commissions and slippage in these results? That is a real life reduction in profit. Before using any cash to purchase such a system, demand to see brokerage statements that backup any such results. He certainly must trade it...correct.....
I've only seen one of the trading systems he sells, the Pork Belly system. In my opinion it is severely over-fitted. It was developed and tested using a five year price history, which generated only 42 trades. The system has seven parameters. Testing did not include commissions and slippage.
It is a simple system with very few parameters combined with money management rules. Looks very practical and with a hands-on usable trading plan. Fully disclosed rules. I like the concept of keeping it simple. It is my experience that the challenge is not in designing a profitable system - there are myriads of ways doing that. The real challenge lies in executing the system consistently, and for doing that it is always beneficial with simple rules. And for gaining confidence in the execution you need own practical experience for how the system works, and not the least how it fits your person and style of trading. Therefore, papertraing is always a good thing to start with no matter how impresssive the claimed performance results are. I will start paper trade the system and post my feedback here when I have enough input for doing so. (I guess a couple of months) Good luck in your trading!
The system correctly signaled a short entry on the E mini Russel 2000 on May 12 @ 755. Still in the position. The open position profit on one contract is now 3800. I will do a new posting when this position is exit and/or a new position is established.
The short position closed out on June 1 @ 730. Trade profit 2500 A long position was established on June 29 @ 712. Market profit ca 1800. Total profit, on one contract, today is 4300 Will make a new positing when position is exited/changed
Since July 10, the system has been wipsawed several times resulting in drawdowns of 6000 on a one contract basis. Far too much. The capital required to trade it must be much more than the 5600 Rich Tokheim says is the required capital. You will need at least the double of that. I am glad that I am still in papertrading mode on this system The experience this far shows that the risk in the system is very high. To compensate for the large drawdowns you will need huge winning trades of 50 points or more... That makes it a hard system to trade on a psychological basis, many people will probably give up before these trade (hopefully) occur.. So at this stage I cannot recommend the system. Cheers!