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Archive for July 2010

Why the most popular Collective2 system is NOT in our portfolio

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Collective2 sent an email describing EFT Timer as the most popular system . They list 3 reasons why they think the system is the most popular: simplicity, can be traded in smaller accounts and fair monthly price.

The performance is outstanding. Smooth equity growth, 30 months track record, 70+% annual return with less than 30% max drawdown.

Yet we don´t have it in our portfolio for a very simple reason: the total number of trades is just 21 at the time of writing. The sample (number of trades) is too small to draw a statistically sound conclusion. To avoid the fallacy of small numbers, we look for systems with 30 or more trades. 30 is not a magical number, but anything below it we consider as something influenced by the law of small numbers rather than a proof of a working trading algorithm and good performance.

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Written by A.S.

July 6, 2010 at 1:08 pm

System trading portfolio down 1.1% in June

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Value of the sample portfolio, run as a part of the system trading gig, declines by 1.1% in June.

Value of three portfolios (with trading systems sourced from Alpari PAMM, Tradency and Zulutrade accordingly) is up while value of two portfolios (Collective2 and Covestor) are down.

The best performer with 6.3% gain is Alpari PAMM portfolio. The worst performers are Covestor (6.4% loss) and Collective2 (3.6% loss).Value of S&P index during the same period has declined by 2.45%

Written by A.S.

July 4, 2010 at 5:54 pm