Risk Disclosure & Disclaimer


•Risk Disclosure: Unique experiences and past performances do not guarantee future results! Testimonials herein are unsolicited and are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading stocks, futures, options and spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the markets trading, only genuine "risk" funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade in the markets. No "safe" trading system has ever been devised, and no one can guarantee profits or freedom from loss. 

•U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Forex, Futures and options 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 and options markets. Don't trade with money you can't afford to lose. This presentation is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

•CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. 

•Substantial risk is involved. 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 markets. Don't trade with money you can't afford to lose. Nothing in this website shall be deemed a solicitation or an offer to Buy/sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed here. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.

CL 15x-TR

CL 351

- Intraday swing-trading system, designed to take advantage
of the best Long & Short setups in CL

- Also based on statistical analysis of price-action

- Over 2400 setups since 2003

- Intraday trading system, combining continuation trades,
with reversal trades

- Based on CL151 "TR" patterns 150, 301, 152, 154, 155

- Over 650 setups since 2007

P&L graph based on trading 1 contract

P&L graph based on trading 1 contract

Before you get to our trading systems offering, we would like to share a few ideas
& concepts that we feel are too often overlooked.

 

What does it take to trade successfully ?
 

This is without a doubt the #1 question ... let's face it:

  1. Capitalization. It takes money to make money ... each & every trading strategy goes through bad-times, technically drawdown periods, where the strategy loses more money than it wins for a significant number of trades. This is where adequate capitalization is absolutely necessary (one needs to have that money in the account, ready to be temporarily lost).
  2. A portfolio of un-correlated trading strategies. There is no "one-size fits all" in trading, and although everything is always clear in hindsight, the reality is that every strategy goes through good & bad times, which can't be anticipated. Trading a portfolio of un-correlated strategies tends to reduce the variability of trading results over time.
  3. A huge appetite & capacity to develop new trading strategies. Although some trading principles remain stable over time (those tied to human emotions, greed & fear), the economy, commodities & financial markets sometimes go through fundamental changes, that impact  trading "forever". As an example, the move from pit trading to electronic trading disrupted a number trading strategies. More recently, the advent of HFT (High Frequency Trading) has disrupted again a number of trading strategies, in particular in the stock market.
  4. Adequate position-sizing & risk-management. Each trading strategy has its own performance characteristics (win%, average win, average & max loss, ...) which must be used to define the "ideal" per-trade position-size given a set amount of capital allocated to the strategy. Risk-management here doesn't mean using stop-losses on a per-trade basis, but rather monitoring the strategy actual performance over the last N trades / months, to detect "abnormal" performance variations and take appropriate action (either trade a smaller size, or stop trading the strategy altogether).
  5. Flawless execution of the trading strategies. This is an absolute requirement ... each trading error, regardless of its circumstances, has the potential to damage the account well beyond the strategy's per-trade limits. Human errors tend to outnumber technical issues by several orders of magnitude ... Using 100% automated trading systems like ours will not only minimize the risk of human errors, it will also minimize the impact of technical issues in a number of circumstances where the system is programmed to recover on its own (in particular, temporary loss of connectivity).

 

What are the benefits of automated trading systems (vs. manual trading) ?

 

  1. Flawless execution of the trading strategy (assuming it has been properly developed & tested) ... the computer works 24/7 without breaks, distractions nor emotions.
  2. Ability to assess a trading strategy performance on past market data, and reject the numerous ones which don't pass this test.
  3. Ability to diversify, both in terms of markets, and in terms of trading strategies - the computer can run perfectly many strategies on many markets, not the case for a human trader.

 

What are the limitations of automated trading systems ?

 

  1. It is very easy to design a trading strategy that works well on past market data, and poorly on real-time, live market - this phenomenon is often referred to as over-fitting a system to past data. There are some steps one can take to reduce the risk of over-fit (in particular, making over-fit more difficult by mandating thousands of trades in backtest).
  2. It is not practical, nor desirable, to code in a trading system all of the nuances an experienced trader could use for discretionary trading.
    It is not practical, because a lot of these nuances are not formalized at the conscious level.
    It is not desirable, because it opens the door to massive distortions of system performance, giving the possibility to over-fit a small set of select trades.
    As a result, automated systems sometimes take "low probability" trades in the eyes of a discretionary trader. Even then, these trades have the same statistical odds as the rest of the system's trades, and in the long run contribute to the bottom-line in the same manner.

 

What are the requirements for trading automated systems ?

 

  1. Technical requirements:
    a) A computer system with 24/7 availability (power & internet) ... the only practical solution is to lease a VPS (virtual private server), which should be hosted in a data center close to the traded exchange.
    b) A reliable price-feed ... the automated trading system needs accurate transactions history from the exchange. This is called a data-feed. Some data-feeds are not appropriate for certain types of systems.
  2. Capital requirements:
    The trader needs to understand the capital requirements for the system(s) traded, and fund his/her account accordingly.
  3. Operations requirements:

    a) Automated trading systems build on a definite, statistically valid Edge, and rely on the systematic execution of all the corresponding trades:
    - There is *no* discretion involved as to selecting trades to execute or pass, and any such discretionary decision must be considered an operational error, regardless of its financial outcome.
    - The profitability of an automated trading system comes from the correct execution of a large number of trades . As such, the outcome of the current trade (& even of the last few trades) has very little impact on the long-term profitability of the system.
    b) Monitoring of the trading system's operational context:
    - Although the trading itself is 100% automated (including position rollover), and a number of potential technical issues have been taken into consideration in the design & programming of our systems (temporary loss of connectivity, orders rejected, etc.), there are circumstances where a human intervention will be required. It is recommended that each trader monitor the system's operational context on an ongoing basis. As an alternative, dom993trading offers a non-intrusive remote-monitoring service of its trading-systems, whereby upon detection of an operational context issue, dom993trading will contact the trader by phone, allowing the trader to take the appropriate corrective steps.

 

Common principles to our Automated Trading Systems

 

Our current systems are based on statistical analysis of price-action, and use the same software engineering concepts, techniques, development & testing process that I used to produce 99.999% up-time telecommunications systems.

 

Statistical Analysis

 

Whenever possible, we use 10+ years of historical data for the statistical analysis of intraday systems (some systems use transaction volume information, which wasn't available for CL before the switch to all electronic-trading in the fall of 2006. As a result these systems have a shorter basis to their statistical analysis).

Each pattern candidate is evaluated using a number of criterias:

  • sample size (number of occurrences of the pattern) - global & year-by-year
  • information ratio (average / stdev) - global & year-by-year
  • underlying market behavior

 

System design & testing

 

Each system is designed around a specific modeling of price-action, and uses multiple patterns found through the statistical analysis of that model.

Backtesting always accounts for commissions & 1-tick systematic slippage on each MKT / STP order ... live trading of our systems tends to exhibit 1-tick better result per trade than the backtest.

 

100% Automated Trading

 

Our systems target 100% "hands off" operations:

  • Trades entries + exits
  • Position rollover
  • Recovery from temporary loss of connectivity with automated reload of missing historical data, and restart of the system preserving the existing position & open orders.

CL 151

- Intraday trading system, trades pullbacks in the direction of a confirmed macro-trend.

- Based on the most stable, 2nd largest pattern of CL Always-In, with a different set of confirming factors

- Over 1000 setups since 2007 (patterns 1515+302 alone)

P&L graph based on trading 1 contract

Recommended core system

April 16, 2014 webinar

  - About the founder
  - Systems overview                    (from 3min into the webinar)
  - CL151 technical presentation (from 16min into the webinar)

CL 302

Ideal for small accounts

P&L graph based on trading 1 contract

- Intraday trading system, trades pullbacks in the direction of a confirmed macro-trend.

- Low frequency system,
based on CL151 patterns 301, 302 & 152

- About 500 setups since 2007 (pattern 302 alone)

Standalone or CL151/351 add-on

CL SELECTIVE

Single-pattern system

P&L graph based on trading 1 contract

- Intraday trading system, single-pattern : continuation trades

- Based on pattern 351 (part of the 151 family):

  -> Over 1600 setups since 2007
  -> Statistical significance : 4.9 stdev from random

- 4 optional filters