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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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It's a marathon, not a sprint

August 14, 2018

As I prepare for my 3rd ultra marathon this year; a 100 km race in Kananaskis this Saturday, I'm getting into my "ultra" mind set required to complete these 20 to 35 hour endurance efforts.

  1. Slow, but steady pace will get me to the finish line. 

  2. I don't get too upset about the small set-backs along the way because it's a long day, and full of ups and downs.

  3. I don't get too excited about the small gains along the way because, again, it's a long day and I know there will be plenty of ups and downs along the way.

  4. I will have confidence in my plan, and I will stick to it with discipline. My slow but steady pace will get me to the finish line.

Successful trading is like running an ultramarathon. I do realize some accounts are in a bit of a drawdown now - especially the under-capitalized accounts due to restrictions on positions caused by margin limitations. I have recommended that these accounts reduce the number of symbols traded to reduce the chance of even larger drawdowns. 

 

I didn't develop AlgoLab for short term gains, I built it because I wanted a way to earn a better return than what my mutual funds and bonds have provided me with over the many years I've been investing. I'm more interested in my average year, 2 year or even 5 year return vs drawdown, than how much money I made this week, month, or even quarter.

 

Here is a little story with pictures that better illustrates what I'm talking about:

 

1. imagine how this account felt almost 2 months after starting trading!

 

 

2. Now imagine the excitement as this account watched their profits return to the starting point

 

 

3. How upsetting this must have been to watch profit drop back down to near lows :-(

 

 

3. Finally after 5 months, profit spikes up nicely above the starting point

 

 

6. How do you think this investor felt when he/she had to watch all of those hard earned profits disappear again! :-(

 

 

6. Oh wait! looks like new highs are on the way! Yea!!

 

 

6. Nope... back down again :-(

 

 

7. Let's fast forward to TODAY. Yes, this is the story of the AlgoLab House Account. 146% return in 2 years since I funded my Interactive Brokers account on August 2nd, 2016. I have never paused it, never changed risk, and never changed systems from SuperSystem. Slow and steady wins the race.

 

One final comment: Note the red "GAIN/PAIN" badge on the House account dashboard upper left of the chart. This shows how many Dollars of profit were earned for every dollar of drawdown. The gain/pain ratio a very fair way of comparing different accounts, different investment strategies, different risk values because it relatively reflects what can be gained for the amount of risk assumed. The higher the number, the better, or more efficient the investing methodology.

 

I just finished a very cursory calculation of the average 2 year gain/pain ratio of the stock market, and it's about "1". This means that in the stock market (mutual funds, stocks or ETF's), you are looking at an average loss each year that equals your gain. In other words, you need to expect that your account will drop 5% in value at some point every year before it gains 5% by the end of the year. AlgoLab - although only 2 years of actual track record, is over 400% more efficient that just putting your money in stocks (note, this last year has been unusually spectacular for stocks. To be fair, I'm considering 10 year historical period compared with the same 10 year AlgoLab backtest historical period.

 

Greg

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