Trendfinder Trading Systems

It is clear from the results so far this year that most of the intraday systems are not performing within acceptable parameters.  One clear indication of this is that many have exceeded 1.5 times their previous max historical drawdown.  Your largest drawdown is always in the future, but you also have to stop trading at some point to protect capital.  These systems could certainly recover – and that may happen soon given the amount of volatility that could be coming with problems in Europe and possibly China and elsewhere – however I think it’s time to stop trading most of them.

The intraday systems perform best in markets with high volatility and under-perform during low volatility.  I have always left it up to the subscriber to choose when to turn systems off/on, but I now want include that within most of the systems themselves.  These new systems only trade during markets that typically provide the best results.  They use the VIX and/or the average daily range to determine the volatility of the market.  Each system uses a different measure to provide diversification.  I have almost finished the walk-forward analysis (to help confirm I am not over-fitting) and hope to have them ready to release within a week.  Since they will be trading less frequently and could go months without a trade, I will be reducing the lease fees.

It reminds me of many trader’s (and mine) biggest hurdle you have to overcome – over-trading.  When there is not a good trade opportunity you should just sit on your hands!  These new systems use that philosophy.  I have avoided taking this action for a while because I was afraid clients would get upset when they had periods where there were no trades (and broker’s aren’t crazy about it either), and I apologize for that.  My first concern is that your accounts are growing, and I think these new systems will support that better than the current ones.

If you have any questions about this please feel free to contact me.

It was a brutal week.  2 systems had a gain and the rest were down.  The potential good news is that volatility is picking up – if that continues these systems could do really well in the coming months.

There were no intraday trades today.  MeanSwing II was stopped out of a long trade in the Russell 2000 (RL).

Lion went short and had a profitable trade.  MeanSwing II was stopped out of a long trade in the EMD (S&P MidCap 400).

Cougar II Alt had a profitable short trade today.  FedSwing exited a long trade in all 3 markets with a loss.

Every intraday system went long for what looked to be a nice break to the upside.  They each exited with a loss.  Lion reversed and the short trade made up for the earlier loss.

Lion was the only system to trade today.  It went long twice and ended with a small loss.

It was a down week for the intraday systems.  The swing systems entered long trades this week and will probably exit next week.

Lion was the only system to trade today – it went long and exited with a loss.

It was a sidewinder day.  First the market went down from the open triggering short trades for Cougar II Alt, Leopard II, Leopard II Alt and Lion.  Then the market started moving up triggering long trades for every intraday system except the Leopards (they take max 1 trade/day).  Then the market headed down again into the close.  All trades ended with losses (fortunately small)….as typically happens in sideways choppy action.