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AlgoLab by theAlgoLab.com is trade execution assistance software. theAlgoLab.com company, software, or it's principals do not provide trading advice or recommendations. If you require personalized professional trading / investing advice, please consult with a licensed broker/CTM. Actual past performance, or simulated past performance does not guarantee future results. Trading futures assumes a high level of risk. theALgoLab.com and it's principals are not registered as investment advisors. Consult with a CPA or financial advisor, or broker to ensure that your strategy utilized is suitable for your investment profile before trading in an actual funded live brokerage account.

 

Some trading performance results posted at this web site are from back-testing systems during the dates indicated, using specific settings, from a basket of different futures contracts. Some performance results shown here benefit from hind-sight. Some results shown result not from actual funded trading accounts, but from simulated accounts which have certain limitations. Actual results will differ given that simulated results could under, or over compensate the impact of certain market conditions. Actual draw downs could exceed back-testing draw downs when traded on actual trading accounts.  While back-tested results might show profitable returns, once commission, slippage, and fees are considered, actual returns will vary. 


Futures trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website or on any reports. The past performance of any trading system or methodology is not necessarily indicative of future results. 

August 22, 2019

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Worried about a stock market crash?

December 3, 2017

Friday was a wild ride for the stock indexes that started first thing in the morning with investors bidding up stocks due to confidence that the tax reform bill will pass. AlgoLab's two main systems "SuperSystem" and "DifferenceEngine" picked up the spike in ES, YM and NQ, then immediately gave it all back when the news about the Michael Flynn arrest hit.

 

It is Sunday afternoon right now, 10 minutes before the market pre-open, and I'm sort of thinking that the equities markets are starting to act a bit "crashy" with exaggerated fluctuations based on fear and exuberance.

 

The last major stock market crash in 2008 was a very profitable time for AlgoLab according to the historical back test using Performance Viewer. Below is a screen shot from PV showing our theoretical 172% equity run-up right after the September 29th, 2008 stock market crash. Also note that this was a particularly VOLATILE time with a $35,867 maximum drawdown (on a $100,000 of capital account).

If a dramatic plunge in stock prices is in the cards over the next few weeks, I would like to remind you of a couple of things:

  1. Crashes are accompanied by an increase in volatility, which means, that we could be seeing higher drawdowns as well. Watch your risk levels, and understand you can't trade any fewer than a single contract per market. Read this post about risk and position sizing.
     

  2. Both SuperSystem and DifferenceEngine use a trend filter which means that when or if the markets do start to make a rapid downward move, AlgoLab won't place any SHORT bias trades for you until the price drops below the 1500 hour moving average.

Here is a great quote from my favorite trading book "Reminiscences of a Stock Operator": 

 

When the wise old trader of the brokerage house was asked by the young brokers if he was buying or selling, he simply replied "Why, I'm buying of course. It's a bull market you know!"

 

Bull markets always seem to last longer than anyone expects, so it could very well be that this one just continues on upward. AlgoLab might benefit from a change though, because so far, the later part of 2017 has been a bit "slow" for AlgoLab profits. 

 

 

 

 

 

 

 

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