I can understand you feelings but your comparing taking risk vs
not taking risk. Anytime you take risk and it doesn't work or
isn't working then having taken no risk will look optimal. I
think you first decided to take risk and then comparing apples to
apples is how you honestly feel you would have done managing your
own funds.
performed as advertised? Come on, there are no guarantees
to systems, none. All that was advertised is how the system
has down in history back to 1995 and from last Nov 10 to April 10
when I had it mostly developed and had live trades on my side.
The history before last Nov was fine and it was also fine up
until May, and remember the system was mostly developed by last
Nov, so I treat the trades from Nov 10 - May as live tested trades.
That's all that was advertised, we guaranteed nothing about a
system's future, no site out there does because you just can't do
that. Any system can stop working at any time, you hope that
it continues, but no one can guarantee that.
Anyway I'll do an in-depth analysis this weekend. From
what I can see, the profit curve looks fine still. Remember
this system has like 17 years of history, so unfortunately it still
may be too early to say that it's broken, but again I'll cover that
on the weekend with my profit curve analysis.
Right now from Jan 2001, the system would be up about 8%, now
obviously we didn't release it until May, but I'm looking at the
yearly %. Back in 2005, the system only made 10% the whole
year (which was much lower then the average yearly returns), and
given the fact that we still have a few months until year's end,
the system may still end up matching that paltry 10% return.
The system had a stellar 2007, 2008, 2009 and 2010,
so maybe it's just due for one of these low return years, and since
it was started nearly mid year, it didn't get the first gains from
Jan - Apr.
All I ask, is, keep your emotions at bay, this is why the
general public loses money, they get over emotional about things.
Unfortunately systems always carry a degree of risk, nothing
is guaranteed in life, but again I'll do an in-depth analysis of
the profit curve and trades this weekend with additional thoughts
about where we go from here.
Posted by shinings on 21st of Oct 2011 at 03:29 pm
By the way, i always know that this kind of system does best in
strong bull and bear market, while not so good in sideways market.
Unfortunately since launch, we have been in a sideways
(transitional) market (in longer time frame) hence the low
performance. If you look at shorter time frame, it was also at the
turning point from bull to bear that we experienced the biggest
loss for the system. Now, we may be in another transition from
bear to bull again, and i won't be surprised if the current trade
turns into a loss as well.
Am i second thinking the system? no. and i for sure could not
predict when sideways market is coming, so i let the system do its
thing. At the time i signed up, i already knew this
so i'm not emotional and won't blame the system.
Correct me if i'm wrong, Matt. I just want to know more about
the system.
Posted by shinings on 21st of Oct 2011 at 03:20 pm
Matt - very good points here. I agree that no system can ever
guarantee any results by itself.
But as the owner and seller of this SPY system, you and all of
us members are sharing something in common, that is "to make
profits off of it". In my mind, I'm completely ok with paying $ for
a system that does well. And i believe you set the price based
upon a premise, which is the 17-year backtest, which is what got me
and people here interested. However since launch, call it luck or
unluck, the performance wasn't on par with the premise it was based
on. Therefore, I think some relief on the membership fee or
something would be very much appreciated by all the members who are
all going thru difficult times. At the same time, one can argue if
the system does exceptionally well (better than the history data),
can you raise the membership fee some and will people still like
it? I don't know. I think we all ought to ask this question to
ourselves.
Again, as you can see i'm trying to be unbiased and look at the
situation from both sides. But emotions are built-in in all
human beings, and please don't take offense if any of the comments
here get "too sensitive". Ultimately, like i said, we all share
something in common - "to make profits from the system". Nobody is
trying to do anything harmful to the system (or the community
here), at least not intentionally. That's the bottom line.
BTW, can't wait to see your analysis over the weekend.
I don't think that is a fair point. I would be the first
to wish we had better results but to say "as advertised" you imply
there was some guaranteed return implied or promised and that was
never the case.
look at it from the subs viewpoint...you build a history of
performance with the system...why do you do that? because it shows
how the system has performed and that's why subs paid to use
it...well the system has underperformed during our sub..I don't see
what's wrong with my comment. It's not emotional and just states
the truth that the system has not performed as well as brkpt
thought it would..Tom just said he wishes the system had better
results...I have never griped about anything at Brkpoint so I'm not
one to be negative on the site...
But we started out thinking we were trading a system with
defined risk based on 16 years of backtested history. The
largest loss was 3.6% and that was called an outlier. Good
enough. Then with that 8%+ loss which was almost triple the
largest historical loss -- and with no defined stop built into the
system, we were suddenly trading a system with undefined
risk. I know for me personally it caused me, rationally, to
cut way back on position size, since I have no idea what my risk
is, and this will now mean it takes much longer to recoup that
loss.
Thanks for sharing Michael. My point regarding risk when
responding to that specific post was, IMO, you cannot compare
following a system or trading in the markets in general to shoving
money under the mattress, that is not apples to apples. When
I buy a car and it becomes a lemon I might think back about the
other car I test drove and should have bought but I would not say
"man I knew I should have just walked".
Tom -- I've been at BPT for many many years. I like Matt a
lot and I respect his work. But I don't think you are really
answering what people are saying.
In response to copycat you are saying that deciding to take risk
is not the same as not taking any risk. I am saying that risk
that we are taking turns out to be different from the risk we
thought we were deciding to take. And actually, right now, I
do not even know what the risk is. Do you? what's the
defined risk of trading the system?
Well technically I don't believe either of you asked me a
question or I didn't see it so I was commenting more on your
comments.
The SPY System has had the same risk it always had, nothing
changed. Maybe some people used past performance as an
indication of future performance. The way I handle risk is
through allocation. I generally look at a system as
potentially going to zero (maybe not in one trade especially since
it is a large ETF but that's how I handle it) and then start with
an appropriate allocation and work from there and then increase or
reinvest profits. Now I am slightly conservative but I start
with my net worth and then allocate savings and then investing and
trading and the SPY is apart of my trading etc. I am also
young, or at least I am told I am
. But what would I say the risk for
the SPY System is, I used zero and allocated accordingly but
decided I would always reinvest profits. I also trade other
strategies and styles so there have also been cases for me
personally where I may already be long or short when the system
might want to go long or short etc. and then I have to evaluate
what works best for me. Do I ignore the signal, double up,
hedge etc.
How did you first decide what to allocate? Did you trade
the SPY or leveraged vehicles?
Tom -- once aqain, you know I am a very long term guy here, and
I don't mean to beat a dead horse - but are you saying that you
approach the spy system assuming that the trade could in theory go
to zero, and you allocate accordingly? That makes no
sense. What would be a rational allocation for a trade with
the risk of losing all your money? I really don't get it. The
basic mantra of trading everywhere, including this site, is to set
stops, know your exits when you enter the trade, define risk.
If the risk is 100%, I don't know - seems to me there would have to
be an awful lot of reward.
If you assume the trade could go to zero, the only answer I come
up with is that the allocation has to be so small relative to
account size, that it won't bother you to lose it all. What
would that be -- 2%? So with a $200,000 trading account, one
could put 4000 into the system, un-levereged. With a 100,000
account it would be 2000 per trade. Just thinking out loud
now, I haven't thought about it until I read your post -- I just
don't know if its worth bothering with it for that amount of
money.
Did I misread your post?
And don't get me wrong -- I'm trading the system, I've never
complained about a trade, and I imagine there is every chance that
the current trade could end up very profitable. I'm not being
emotional here, I'm just trying to understand the answers that you
are giving.
It does seem like if members voice their displeasure with the
system, they are told they are being emotional or they are over
leveraged....I don't think that's a fair response since subs are
just stating that they sub'ed to something that didn't deliver...at
the same time I will be the first to say I did not support the subs
who were griping about trades...In fact I made a comment in the
past that subs should stop whining about the trades and just have
faith in the system...but now that the system sub is coming to an
end and the performance has been poor---I don't think the subs got
what they paid for or what they believed they were going to get
when they looked at years of historical trades initially...
I can understand you feelings
SPY System Performance vs. Market since first trade
Posted by tom on 21st of Oct 2011 at 08:59 am
I can understand you feelings but your comparing taking risk vs not taking risk. Anytime you take risk and it doesn't work or isn't working then having taken no risk will look optimal. I think you first decided to take risk and then comparing apples to apples is how you honestly feel you would have done managing your own funds.
Tom the system has not
Posted by chlo888 on 21st of Oct 2011 at 02:26 pm
Tom the system has not performed as it was advertised...that's my point..
performed as advertised? Come on,
Posted by matt on 21st of Oct 2011 at 02:43 pm
performed as advertised? Come on, there are no guarantees to systems, none. All that was advertised is how the system has down in history back to 1995 and from last Nov 10 to April 10 when I had it mostly developed and had live trades on my side. The history before last Nov was fine and it was also fine up until May, and remember the system was mostly developed by last Nov, so I treat the trades from Nov 10 - May as live tested trades. That's all that was advertised, we guaranteed nothing about a system's future, no site out there does because you just can't do that. Any system can stop working at any time, you hope that it continues, but no one can guarantee that.
Anyway I'll do an in-depth analysis this weekend. From what I can see, the profit curve looks fine still. Remember this system has like 17 years of history, so unfortunately it still may be too early to say that it's broken, but again I'll cover that on the weekend with my profit curve analysis.
Right now from Jan 2001, the system would be up about 8%, now obviously we didn't release it until May, but I'm looking at the yearly %. Back in 2005, the system only made 10% the whole year (which was much lower then the average yearly returns), and given the fact that we still have a few months until year's end, the system may still end up matching that paltry 10% return. The system had a stellar 2007, 2008, 2009 and 2010, so maybe it's just due for one of these low return years, and since it was started nearly mid year, it didn't get the first gains from Jan - Apr.
All I ask, is, keep your emotions at bay, this is why the general public loses money, they get over emotional about things. Unfortunately systems always carry a degree of risk, nothing is guaranteed in life, but again I'll do an in-depth analysis of the profit curve and trades this weekend with additional thoughts about where we go from here.
By the way, i always
Posted by shinings on 21st of Oct 2011 at 03:29 pm
By the way, i always know that this kind of system does best in strong bull and bear market, while not so good in sideways market. Unfortunately since launch, we have been in a sideways (transitional) market (in longer time frame) hence the low performance. If you look at shorter time frame, it was also at the turning point from bull to bear that we experienced the biggest loss for the system. Now, we may be in another transition from bear to bull again, and i won't be surprised if the current trade turns into a loss as well.
Am i second thinking the system? no. and i for sure could not predict when sideways market is coming, so i let the system do its thing. At the time i signed up, i already knew this so i'm not emotional and won't blame the system.
Correct me if i'm wrong, Matt. I just want to know more about the system.
Matt - very good points
Posted by shinings on 21st of Oct 2011 at 03:20 pm
Matt - very good points here. I agree that no system can ever guarantee any results by itself.
But as the owner and seller of this SPY system, you and all of us members are sharing something in common, that is "to make profits off of it". In my mind, I'm completely ok with paying $ for a system that does well. And i believe you set the price based upon a premise, which is the 17-year backtest, which is what got me and people here interested. However since launch, call it luck or unluck, the performance wasn't on par with the premise it was based on. Therefore, I think some relief on the membership fee or something would be very much appreciated by all the members who are all going thru difficult times. At the same time, one can argue if the system does exceptionally well (better than the history data), can you raise the membership fee some and will people still like it? I don't know. I think we all ought to ask this question to ourselves.
Again, as you can see i'm trying to be unbiased and look at the situation from both sides. But emotions are built-in in all human beings, and please don't take offense if any of the comments here get "too sensitive". Ultimately, like i said, we all share something in common - "to make profits from the system". Nobody is trying to do anything harmful to the system (or the community here), at least not intentionally. That's the bottom line.
BTW, can't wait to see your analysis over the weekend.
Cheers!
I don't think that is
Posted by tom on 21st of Oct 2011 at 02:39 pm
I don't think that is a fair point. I would be the first to wish we had better results but to say "as advertised" you imply there was some guaranteed return implied or promised and that was never the case.
look at it from the
Posted by chlo888 on 21st of Oct 2011 at 03:13 pm
look at it from the subs viewpoint...you build a history of performance with the system...why do you do that? because it shows how the system has performed and that's why subs paid to use it...well the system has underperformed during our sub..I don't see what's wrong with my comment. It's not emotional and just states the truth that the system has not performed as well as brkpt thought it would..Tom just said he wishes the system had better results...I have never griped about anything at Brkpoint so I'm not one to be negative on the site...
risk
Posted by Michael on 21st of Oct 2011 at 12:41 pm
Tom -
But we started out thinking we were trading a system with defined risk based on 16 years of backtested history. The largest loss was 3.6% and that was called an outlier. Good enough. Then with that 8%+ loss which was almost triple the largest historical loss -- and with no defined stop built into the system, we were suddenly trading a system with undefined risk. I know for me personally it caused me, rationally, to cut way back on position size, since I have no idea what my risk is, and this will now mean it takes much longer to recoup that loss.
Thanks for sharing Michael. My
Posted by tom on 21st of Oct 2011 at 01:40 pm
Thanks for sharing Michael. My point regarding risk when responding to that specific post was, IMO, you cannot compare following a system or trading in the markets in general to shoving money under the mattress, that is not apples to apples. When I buy a car and it becomes a lemon I might think back about the other car I test drove and should have bought but I would not say "man I knew I should have just walked".
Tom -- I've been at
Posted by Michael on 21st of Oct 2011 at 02:57 pm
Tom -- I've been at BPT for many many years. I like Matt a lot and I respect his work. But I don't think you are really answering what people are saying.
In response to copycat you are saying that deciding to take risk is not the same as not taking any risk. I am saying that risk that we are taking turns out to be different from the risk we thought we were deciding to take. And actually, right now, I do not even know what the risk is. Do you? what's the defined risk of trading the system?
Well technically I don't believe
Posted by tom on 21st of Oct 2011 at 03:37 pm
Well technically I don't believe either of you asked me a question or I didn't see it so I was commenting more on your comments.
The SPY System has had the same risk it always had, nothing changed. Maybe some people used past performance as an indication of future performance. The way I handle risk is through allocation. I generally look at a system as potentially going to zero (maybe not in one trade especially since it is a large ETF but that's how I handle it) and then start with an appropriate allocation and work from there and then increase or reinvest profits. Now I am slightly conservative but I start with my net worth and then allocate savings and then investing and trading and the SPY is apart of my trading etc. I am also young, or at least I am told I am
. But what would I say the risk for
the SPY System is, I used zero and allocated accordingly but
decided I would always reinvest profits. I also trade other
strategies and styles so there have also been cases for me
personally where I may already be long or short when the system
might want to go long or short etc. and then I have to evaluate
what works best for me. Do I ignore the signal, double up,
hedge etc.
How did you first decide what to allocate? Did you trade the SPY or leveraged vehicles?
Tom -- once aqain, you
Posted by Michael on 21st of Oct 2011 at 08:54 pm
Tom -- once aqain, you know I am a very long term guy here, and I don't mean to beat a dead horse - but are you saying that you approach the spy system assuming that the trade could in theory go to zero, and you allocate accordingly? That makes no sense. What would be a rational allocation for a trade with the risk of losing all your money? I really don't get it. The basic mantra of trading everywhere, including this site, is to set stops, know your exits when you enter the trade, define risk. If the risk is 100%, I don't know - seems to me there would have to be an awful lot of reward.
If you assume the trade could go to zero, the only answer I come up with is that the allocation has to be so small relative to account size, that it won't bother you to lose it all. What would that be -- 2%? So with a $200,000 trading account, one could put 4000 into the system, un-levereged. With a 100,000 account it would be 2000 per trade. Just thinking out loud now, I haven't thought about it until I read your post -- I just don't know if its worth bothering with it for that amount of money.
Did I misread your post?
And don't get me wrong -- I'm trading the system, I've never complained about a trade, and I imagine there is every chance that the current trade could end up very profitable. I'm not being emotional here, I'm just trying to understand the answers that you are giving.
It does seem like if
Posted by chlo888 on 21st of Oct 2011 at 03:43 pm
It does seem like if members voice their displeasure with the system, they are told they are being emotional or they are over leveraged....I don't think that's a fair response since subs are just stating that they sub'ed to something that didn't deliver...at the same time I will be the first to say I did not support the subs who were griping about trades...In fact I made a comment in the past that subs should stop whining about the trades and just have faith in the system...but now that the system sub is coming to an end and the performance has been poor---I don't think the subs got what they paid for or what they believed they were going to get when they looked at years of historical trades initially...
membership fee
Posted by skyfish on 21st of Oct 2011 at 10:00 am
What is the status of the spy membership fee? Renew date, amount, free time if any, so I can consider what to do next.