Reality Based Trading Products Highlights - Written Systems

The written trading systems described below are but only two of the numerous written systems contained in the Reality Based trading library. Written systems may be simply traded as is or used for ideas in developing your own personal trading system or method. Be sure to request our FREE Catalog in order to receive information about all of the Reality Based Trading Company's products.

NYFE FOR LIFE (March/April, 1992)

The stock index futures are the sirens of the commodity markets. You remember the mythological sirens. They were female nymphs who, with their seductive singing, lured lonely sailors to their deaths on island rocks. The stock indexes have the largest dollar range of any markets. The profit potential is seemingly enormous.

Yet, research has shown that they are among the very worst trending markets. Since your only edge in trading is the trend, that edge is the absolute lowest in these beguiling markets. Many a trader's account has crashed on the rocks that seemingly surround the S&P and NYFE pits.

Faithful followers, we have the solution for you. We call this system, NYFE For Life. Once you see its amazing results, you will want to scrap all your other stock index systems and concentrate on this one.

The flagship system is designed for the NYFE because its current lower $5,000 margin is easier to handle than the S&P's current $9,000 margin. This is not a day trading system. It is a short-term system, but you do have to hold overnight. It trades about once a month. It is so easy to operate, you won't need a computer. We don't even sell software for this one. Throw away your calculator and abacus as well.

We were completely amazed by the robustness of this approach. It seems like you can do just about anything and still make money. Change your stop. Use no stop. It doesn't seem to matter. Are you afraid everyone else will be trading the same system? Not to worry. Enter earlier or hold your trade longer. You'll still make tons of money.

Our manual shows you trading results for 500 separate system variations in each of nine time periods: 1988-94, 1988, 1989, 1990, 1991, 1992, 1993, 1994 and 1983-87. For each variation, we show you nine different performance statistics. That's 3,500 lines of system results with 31,500 performance statistics.

We tested NYFE For Life hypothetically using Continuous Contracts which are designed to mimic action in the nearby contract without worrying about rollovers. All trades included a $ 100 deduction for slippage and commissions. Drawdown figures are for closed-trade drawdown.

Since some traders place greatest emphasis on different performance measurements, we provide nine. You can choose to maximize accuracy, total profits or average trade. Or you can select the system with the lowest drawdown. It's up to you.

Here are some sample results for the 1988-94 time period. One version of the system was 69 percent accurate and made $679 a trade on 84 trades. (This is the NYFE, remember, not the S&P). That's a net profit of over $8,100 a year with a maximum drawdown of only $3,825. If you are willing to trade without a stop, you can increase profitability to $798 a trade and increase accuracy to 73 percent. This version had a five-year maximum drawdown of only $5,725 trading without any stop! And we're not talking about making all the money on one trade. The largest win was only 7.5 percent of the total profit.

Take it from us: The performance you'll see in this system manual is eye-popping. But there is one small catch. Performance between 1988-94 was considerably better than 1983-87. We're not sure what the significance of this is, but we don't think it should stop you from trading the system. The manual shows you the comparative performance of all 500 variations in nine time periods so you can make up your own mind.

Those who purchase the NYFE version of this system will receive details on how to obtain the S&P 500 version (S&P Devotee) at a big discount. It is equally impressive for more aggressive, larger accounts.

THE FRACTAL WAVE ALGORITHM, CHARTS AND SYSTEMS (July/August, 1992)

The July/August, 1992 issue of CTCR contained a long interview with Bill Dreiss on chaos theory and fractals. Bill was one of the earliest professional money managers and a pioneer in trading commodities with fractals. This special report, created .by Bill Dreiss and Bruce Babcock, gives complete instructions on how to create unoptimized fractal wave charts. There are also descriptions of four separate trading systems using the fractal wave algorithm.

Tested hypothetically over weekly data on fourteen commodities between 1984 and 1990, here is the average performance per commodity of one of the four systems: 13 trades, 45 percent profitable, average trade $2,239, maximum drawdown $6,646. Every single one of the fourteen markets was profitable and the total net profits were $356,720 or about $51,000 per year. Those results include a $100 per trade deduction for slippage and commission.

As a bonus, the report also includes the mathematics of Dreiss's Choppiness Index. Described more fully in the CTCR interview, the Choppiness Index measures the extent of trendy versus choppy price action. Dreiss calls it "similar to ADX but more firmly grounded conceptually, as well as more reliable, less erratic, more bounded and easier to calculate." This new indicator may really help keep you in the trends and out of the whipsaw market periods.

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TRADING IN COMMODITY FUTURES OR OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS.
PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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