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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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Predicting drawdowns

August 22, 2019

The above chart is House Account 2 trading DifferenceEngine. One big advantage of my golden rule about never pausing or changing the house accounts in any way, is that it provides a consistent track record that allows for the observation of trends or patterns that would be difficult to see if not for that consistency.

 

A trend that I am seeing right now, are these 2 channel lines consisting of a lower trend line and an upper channel line. The lower and upper lines seemed to accurately predict both our recent equity top and the bottom of the drawdown that started Jan 2019. Another pattern is the average time duration of drawdowns which seems to be around 3 months or so.

 

Using both the trend line, and the average drawdown duration seems to predict that this current drawdown could end some time in October.

 

I AM NOT PREDICTING THIS DRAWDOWN. There are many reasons why my analysis above could be wrong. The primary reason is that I have not been able to verify this using objective math, so I suspect that a lot of the so-called "pattern recognition" could be simply due to human error (seeing patterns with my eyes that don't really exist).

 

I should also add that, as usual, I have no plans on pausing either of the two house accounts.

 

Secondly, this trend does NOT exist in HouseAccount 1 which trades SuperSystem shown below, and offers more historical data. The last drawdown plunged through the lower trend line and 'seems' to be creating a new, lower trend line.

 

I am NOT recommending that you pause trading, and in fact, I'm not making any recommendations at all. I'm just providing you with facts. AlgoLab is YOUR software and a benefit of using AlgoLab software vs. a managed account is that YOU CALL THE SHOTS. Currently, 25 out of 74 AlgoLab users have their trading systems paused.

 

I would like to remind you that if your account value drops below $50,000, you should probably adjust your capital setting (again) to restrict your trading to fewer symbols. Trading a reduced symbol set should protect you from even worse drawdowns caused by rejected trades due to insufficient capital. Ask me if you need additional explanation.

 

 

 

 

 

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