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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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Low capital vs. high capital account performance continued. Trade by trade analysis

January 14, 2019

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Drunkards Walk book

March 14, 2018


Human beings with our animal brains are very poor decision makers, and not really suited to making buying or selling decisions based on far more information than our meat computers can process. This is why objective, tested algorithmic trading is always going to be more profitable.

Excerpts from “The Drunkards Walk”

Which is greater: the number of six-letter English words having “n” as their fifth letter, or the number of six-letter English words ending in “ing”? Most people choose the group of words ending in “ing.” Why? Because they’re easier to think of than generic six-letter words. But the group of six-letter words having “n” as their fifth letter includes all six-letter words ending in “ing.” Psychologists call this the availability bias, because we give unwarranted importance to memories that are most vivid and most available for retrieval.

Suppose the state of California offered its citizens the following game: Of all those who pay the dollar or two to enter, most will receive nothing, one person will receive a fortune, and one person will be put to death in a violent manner. Would anyone enroll? They do – it’s called the state lottery. Applying statistics from the National Highway Traffic Safety Administrations, you find a reasonable estimate of driving fatalities is about one per game.

Are streaks in sports real? Not according to a 1985 study by researcher Amos Tversky. He investigated reams of basketball statistics and found that better players have a higher chance of scoring, but their chances of a successful basket after scoring a basket was the same as after a failure.

This above statistic is exactly the same as mutual funds. Statistically, the chances of a mutual fund beating the index this year, if it has a track record of beating the index for 1,5,10, or 20 years in a row is the same chance as any other mutual fund - or the same as a basketball player on a winning streak. Our human brains cannot process this amount of data, so we sift through 10,000 funds looking for the most winning funds that beat the market 10 years in a row without considering the VERY LIKELY chance that those magically amazing consistently winning funds would exist in a large sample size of 10,000 funds, just by chance alone!

That last excerpt is a good analogy for the mistakes we make when making discretionary trading decisions. There is a situation which I have proven is statistically RANDOM but most traders, once this pattern is recognized, will assume that the pattern will continue to repeat itself into the future. In fact, this trend line pattern occurs AS OFTEN in RANDOM PRICE data as it does in actual price data!





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