Futures Truth Magazine Issue 2016

Educating
stock & commodity traders on mechanical systems since 1985.
#2-2016 Issue
Visual Energy Analysis

by Charles Drummond and JB Wells
Developer Interview:
Clockwork Group
System Spotlight: Gatts QM
by Joe Bobek
Phalanx Futures Trading
by Dean Handley
Futures Truth™ · Issue #2‐2016 · www.FuturesTruth.com 1
Top 10 Tables 5 │ Master Performance Table 14 │ Vendor Index 63

Futures Truth ™
REGULAR FEATURES MAGAZINE
3 Mission Statement Issue # 2 · 2016
5 Top Ten Tables
5 Hypothe cal Performance FALSE PROFITS: EXPOSING
Disclaimer & Risk Informa on BIAS WITH INDEPENDENT
PERFORMANCE AUDITS (PART 2
6 Systems Tracked in this Issue PROMOTION & PERSUASION)
10 Systems Ranked by Commodity
36
Andrew Danik con nues his "False Profits" series, this me fo‐
13 Tes ng Informa on cusing on system vendors and what to look for when choosing
14 Master Performance Table a trading system. Specifically, he talks about marke ng techniques
used by vendors to a ract poten al customers, and the difference
34 Margin Table
between seasoned and non‐seasoned vendors approach to en ce con‐
60 For the Record sumers.
63 Vendor Directory
FTC was established to bring truth to the world of public-
ly offered trading systems. The public is literally flooded
with trading systems which carry promise of great GEORGE’S CORNER:
wealth, if one only has the discipline to “follow the sys-
tem”. Many traders have purchased systems for large
AMIBROKER REVIEW
sums of money only to find out later that the system is
40
worthless. Our purpose is to provide information to as- In this issue, George Prui evaluates the Amibroker trading
sist you in both the purchasing of and the actual deci- pla orm and how it can be u lized most effec vely. He details
sion to trade a system. It is up to you to reach your own
conclusion from the facts we present. the Amibroker Func on Language (AFL), which serves to trans‐
fer a trading idea into something easily testable.
There is a substantial risk of loss in futures trading.
The high degree of leverage that is found in futures (be-
cause of small margin requirements) can work against
you as well as for you, i.e., you can have large losses as
well as large gains.
Computer studies for this publication were done by

George Pruitt and Joe Bobek. Copyright© 2016 by Fu- SYSTEM SPOTLIGHT:
tures Truth™ Co. The information in this publication is
confidential and for the exclusive use of FTC subscrib-
GATTS QM
ers ONLY. No reproduction in any form is permitted
44
Joe Bobek highlights one of the many outstanding systems
without written consent. The contents of this publication
have been carefully gathered from sources believed to tracked by Futures Truth, Ga s QM, providing a brief de‐
be reliable, but accuracy of the information is not guar- scrip on and performance numbers to the reader.
anteed. Use it at your own risk. No representation can
be made that future performance of any system will bear
any relation to past performance.
CONFLICTS OF INTEREST:
• Futures Truth™ is a registered CTA & trades for its
own account.
• The owner of Futures Truth™ has an affiliation with the
brokerage firm, Commodity Research Institute (CRI), a
VISUAL ENERGY ANALYSIS
registered IB.
48
• Brokers with CRI have systems that we track in Fu- Market veteran, Charles Drummond, and his long me asso‐
tures Truth™ Magazine. These systems are Stafford ciate, JB Wells, discuss Visual Energy Analysis (VEA). The
S&P Daytrade, FT S&P Daytrade, Universal, Universal
LT, Pendulum, and Universal 2.0. ar cle focuses on how Charles developed this interes ng
• Futures Truth™ Magazine does track and may trade method from its incep on, and also shows how it is applied to chart
systems that are created and sold by Futures Truth™
Company. These systems are Samurai 7, Samurai 31,
analysis. A very insigh ul read!
Samurai 35, Dynamic Breakout, FT Version Turtle Trad-
ing, and Dynamic Moving Average Crossover. Table of Contents con nued on next page.
Futures Truth™ · Issue #2‐2016 · www.FuturesTruth.com 2 Futures Truth™ · Issue #2‐2016 · www.FuturesTruth.com 3

Futures Truth ™ TOP TEN TABLES

TOP TEN SINCE RELEASE DATE TOP TEN FOR PAST 12 MONTHS
MAGAZINE System Annual % Ret System Annual % Ret
1 TSL_CEL_NG_1.1 120.2% 1 Clockwork—KellyV 178.3%
Table of Contents Continued... 2 Ga s QM 119.1% 2 MAR CrudePlus Sync 155.1%
3 TrendModelSys 93.3% 3 LRKage Sys5 143.2%
4 LRKage Sys5 81.3% 4 MAR NewBondLive Sync 136.3%
5 MAR Copper Sync 72.7% 5 Clockwork—Angus 133.9%
6 Clockwork—Paper Barrels 57.4% 6 Alpha DT 117.1%
7 NatGator 55.6% 7 Clockwork—US Captain 103.7%
PHALANX FUTURES TRADING 8 MAR CrudePlus Sync 48.9% 8 Ruggiero Bond Sys 94.2%
9 Clockwork—Angus 43.9% 9 TSL_ES_1.0Z 89.5%
53
Dean Handley con nues his quest in finding the best trading rooms available today. In his latest in‐
stallment, he reviews Open Range Trader, Trading Futures in Ac on and Trade for Greatness trading 10 TSL_US_1 40.7% 10 Strategic 500 83.4%
rooms.
TOP TEN SINGLE MARKET SYSTEMS TOP TEN MULTI‐MARKET SYSTEMS
SINCE RELEASE DATE SINCE RELEASE DATE
DEVELOPER INTERVIEW: System Annual % Ret System Annual % Ret
CLOCKWORK GROUP 1 TSL_CEL_NG_1.1 120.2% 1 Super Turtle 32.0%
2 Ga s QM 119.1% 2 FedSwing 31.9%
57
We recently interviewed the developers at Clockwork Group. Find out what they believe are the best 3 TrendModelSys 93.3% 3 Simple Harmony 28.5%
financial opportuni es now, advice for new traders, and more. 4 LRKageSys5 81.3% 4 MeanSwing 2 26.1%
5 MAR Copper Sync 72.7% 5 RUMI 25.3%
6 Clockwork—Paper Barrels 57.4% 6 I‐Master 22.7%
7 NatGator 55.6% 7 Hi‐Prob 18.4%
8 MAR CrudePlus Sync 48.9% 8 Dollar Trader for Currencies 18.3%
9 Clockwork—Angus 43.9% 9 Hi%Mid 17.1%
10 TSL_US_1 40.7% 10 Catscan III 15.5%
Systems included in the “Since Release Date” Tables, must have been released for at least 18 months.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE
DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO
ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP
DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS
SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY
PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE
FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT
OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO
ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS
WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER
FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC
TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL
PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. THE HIGH DEGREE OF LEVERAGE THAT IS
FOUND IN FUTURES (BECAUSE OF SMALL MARGIN REQUIREMENTS) CAN WORK FOR YOU AS WELL AS
AGAINST YOU, I.E. YOU CAN HAVE LARGE LOSSES AS WELL AS LARGE GAINS.




TESTING INFORMATION
BLACK BOX SYSTEMS ! tem and want it independently checked. If you own a sys-
Black Box” Systems are software products which normally tem not listed in our tables, we would be happy to test it
run on an IBM or Apple computer wherein the trading deci- for you.
sion logic is not revealed. The vendors decision is some- DATA PROVIDERS
what understandable in view of the widespread plagiarism
that takes place. CAUTION should be used in viewing re- Futures Truth™ employs CSI’s Unfair Advantage® data-
sults from these systems because the vendor has the op- base resources to backtest and report on trading perfor-
portunity to selectively do more curve fitting than usual. In mance for systems tested on select markets. In addition,
some cases the logic has been revealed to us and we can Futures Truth™ incorporates data from Prophet® and Tick
attest to an orderly procedure in optimization. We encour- Data, Inc®.
age all vendors to do this. CALCULATIONS USED IN TABLES
ACCURACY ASSURED ALL results are shown AFTER a Commission and Slip-
Our studies are in no way intended to reflect the integrity or
page Charge of $100 per round turn trade for S&P’s, $200
reputation of the vendors. Hopefully it will complement per round turn for the Nasdaq, $25 for e-mini’s, 2 pips for
their research and make it more useful to the investing pub-FOREX, and $75 for all other commodities. New systems
lic. The vendor may have presented their facts in the best with less than 3 months of testing by us, or less than 4
possible light and the numbers may be for a particular peri-trades will show zero % in the ranking. This will eliminate
od of time when the system performed well. In some cas- huge adjustments to Annualized percent returns. ALL re-
es, a system is good over the long term, but one needs to sults are based on a single contract basis. There is no pyr-
be aware of the capital necessary to trade it. Our studies amiding or reinvestment of profits reflected. Notes are lo-
hopefully will help answer these questions. cated in the VENDOR INDEX.
Futures Truth™ Co. will not publish numbers on a trading (1) Rank by Column (16).
system if and when the vendor: (2) System Name
• Disagrees with the results and we are unable to resolve (3) System # is arbitrarily assigned for reference.
the differences. (4) Systems were tested with commodities recommend-
ed by the vendor (Up to 7)
• Sends us threatening and/or harassing letters. (5) The date the system was released.
(6) Yearly performance since 1987 or system released
• Has their attorney write us a letter. date.
This policy has resulted in several systems being dropped (7) Month by month performance (Results are for most
from the Master Performance Table. We have no interest in recent 12 months or since the system was release, if less)
putting up with such behavior and the headache associated The Last month includes any Open Trade Equity. This may
therewith. However, freedom of speech still prevails and cause the months numbers to change from report to report.
private opinions are available. On longer term systems this will change substantially.
(8) 12 Month Net $Profit/Loss after commission/slippage
Futures Truth™ does not permit any “tweaking” of numbers (9) Maximum Drawdown - The highest point in equity to a
in our report. Not one number in our report has the benefit low in equity after commission each day a trade was made.
of hindsight, with the exception of the detailed reports. The
This is NOT intraday drawdown, which includes open trade
only numbers we show are after a vendor’s most recent equity, which would always be higher.
modification. This is clearly pointed out. (10) Number of closed trades.
We only publish history and one should be aware that past (11) % of profitable closed out trades
performance is not indicative of future results. (12) Average profitable trade after commission
(13) Average losing trade after commission.
Our Top Ten long term systems change very little from one (14) Most consecutive losing trades in the 12 months.
report to the next, and is an area of additional exploration (15) Minimum Required Capital - Minimum capital re-
for a system trader. However, prior to buying/trading such aquired to trade the system effectively. Calculated as 5
system, one should look at a minimum 10 year record of times Margin. Margin is the current margin to trade, day-
detailed performance. trading systems will use half the usual margin.
One is at considerable risk if he looks at only one year of a (16) % Change on Minimum Capital. Rate of change of
system’s performance and uses that information to either Column (8) divided by Column (15).
buy and/or trade a system. The Top Ten performing sys- (17) Combined %Change is shown for systems which
tems for the past year changes quite often and should only trade several markets. This is the average % of each mar-
be used as a possible screening for further exploration. ket traded rom column (16). This should give an idea of
Futures Truth™ does not recommend trading a system with how the system performed trading all shown markets.
this limited amount of data. (18) Total Net Profit/Loss after commission/slippage
since the system was released.
TESTING (19) Maximum Drawdown since the system was re-
Most studies were carried out on an Apple Power Mac G3 leased.
computer using EXCALIBUR™ Software. Many tests are (20) Max draw down as a percentage of required capital
done using tick by tick data when needed to assure accura- (5 x margin).
cy. All Tests begin using the release date or January 1, (21) % Change on Minimum Capital. Annualized rate of
1987. An extra effort is made to test each system exactly change of Column (18) divided by Column(15).
as the developer presented it. We produce thousands of
numbers for each issue and will occasionally make mis-
takes. When found the proper results will be published. If
you plan on using any of these systems it is recommended
that you obtain the Detailed Report for that system, to see
actual trade-by-trade results after optimization.
We receive systems for evaluation from vendors, our own
purchase, and from individuals who have purchased a sys-











HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS. NO REPRESENTATION IS

BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE
SHOWN. THERE IS A RISK OF LOSS INVOLVED IN TRADING FUTURES. PLEASE READ THE FULL DISCLAIMER
ON PAGE 3 FOR MORE INFORMATION ON HYPOTHETICAL TRADING RESULTS.
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. THE HIGH DEGREE OF LEVERAGE THAT IS
FOUND IN FUTURES (BECAUSE OF SMALL MARGIN REQUIREMENTS) CAN WORK AGAINST YOU AS WELL AS
FOR YOU, I.E. YOU CAN HAVE LARGE LOSSES AS WELL AS LARGE GAINS.
Click on any Issue for more informa on!

PROMOTION & PERSUASION (con nued)

There may be altruistic reasons for selling trading systems and related education materials. We all
benefit from shared knowledge; it encourages personal growth, mentorship relationships and a
sense of community as a whole. We also want to promote the wisdom, truth and integrity which are
necessary to perpetuate the profession of trading into future generations.
Then again, there are some “educators” and “vendors” who sell their wares merely for the purpose
of making money. They may not trade themselves or know how to develop and execute trading sys-
tems. They need to make a living and they choose to do so promoting and selling material related to
trading and systems.
The result of all this motivation is a veritable glut of trading systems available from a wide variety of
By Andrew Danik sources using every possible media and covering every tradeable market (and some not so tradea-
ble). Regardless of the vendors’ motivation and ethical standards, the competition is fierce and there
Trading systems are advertised for sale, lease or subscription everywhere: in books, magazines, is a lot of noise and smoke in the marketplace. It really is difficult to get any attention if you want to
direct marketing advertisements, online forums, eBay, and trading rooms. A recurring theme in these sell trading systems or education materials in this marketplace. Therefore, vendors must become
advertisements is the promotion of profit. Celebrity traders and famous trading firms make us con- marketers, using the latest inbound and outbound marketing techniques just to get their products no-
tinually aware that some people are very successful at trading. It seems easy to imagine installing a ticed.
charting or trading application, loading a trading system and watching the money roll in. Sometimes
trading systems are promoted using that very imagery. Just open an account with a few thousand Trading system vendors typically employ marketing techniques that are a good match to their moti-
dollars, trade this system, and you will become wealthy and have enough free time to retire and trav- vation. There will always be some overlap in the techniques used; equity curves and performance
el the world over! reports are universal and expected for describing trading systems in the same way that prospectus
are associated with other types of investments. However, there are definite clues that provide strong
While not all trading systems are advertised this way, we naturally hear about the potential upside of evidence about the vendor’s ability, credibility, and motivation. This evidence does not necessarily
trading a system without including the potential downside, which always accompanies trading and predict the amount of risk associated with a system vendor’s product, but it does give us a useful in-
trading systems. There is no reward without risk in this business. For this reason we need inde- dicator to include as part of the due diligence vital to the decision making process.
pendent performance audits to filter the inherent bias in trading system advertisements and help us
more accurately weigh the associated risks. Generally, the most robust trading systems come from seasoned, professional trading system devel-
opers. These vendors have spent years learning what works and what doesn’t. They start to gener-
First, let us tackle the topic of why there is a market for trading systems in the first place. It is crucial ate a reputation and a performance track record once they learn how to develop and test robust
to recognize the main motivations of trading system vendors that determine why they are selling trading systems. The marketing techniques they employ are heavily focused on establishing credi-
trading systems. From there we can scrutinize the claims being made by these vendors and filter bility and demonstrating professionalism in the marketplace. This is to emphasize that they know
them through a selection process to arrive at an informed decision which reflects our accepted risk what they are doing and that they are interested in the success and professional development of the
and desired potential reward. retail trader and customer. These professionals often earn respect and authority by educating the
We all need money to survive in this world. It is the medium of exchange that enables urban civiliza- public in seminars, authoring books and magazine articles, and sharing useful information such as
tion and drives our modern culture. We also generally accept that a person is entitled to some re- trading indicator code and utilities. These attributes, together, tend to demonstrate the characteris-
ward for work effort expended and a (potential) reward for taking on risk. These foundational as- tics of a professional trading system developer who enjoys or loves the work and is in it for the long
sumptions are important to remember because we all have basic needs, standard of living expecta- haul.
tions and lifestyle choices that we wish to maintain. Less experienced trading system developers may also offer good or even excellent trading systems
Some people sell trading systems to generate “regular” income which covers the monthly expenses to the public. Because they lack a robust historical presence and sufficient track record for use in the
of running a business. There are salaries and wages to pay, software and equipment costs and in- due-diligence decision making process, newer vendors may attempt to piggy back on the authority
frastructure and utility costs as in any business. Preferably, these expenses are not paid from profit- of veteran traders through association with their names and methods. Potential customers are more
able trading capital gains. Withdrawing money from trading accounts to cover expenses on a month- likely to encounter equity curves and performance reports on trading systems that benefit from hind-
ly basis is the opposite of compounding and limits trading capital allocations, constrains money man- sight; systems that are updated to show performance on in-sample trades only. It is relatively easy
agement and reduces the overall growth potential of trading and investing. This is one reason that for a developer with weeks or months of experience to generate a beautiful equity curve and enticing
some vendors sell trading systems and subscriptions to trading signals. performance statistics. A good programmer can even do it within hours or days of developing sys-

PROMOTION & PERSUASION (con nued) PROMOTION & PERSUASION (con nued)
tems for the first time. Some rookies display trading systems with too few trades to get an idea of term out-of-sample track rec-
the long term possibilities of the system’s performance. The inherent bias of looking only at in- ord. A strong motivation to per-
sample performance is dangerous to your trading account and a common rookie mistake! suade and sell with no verifia-
ble way to determine likely fu-
The key concept we need to understand here is that rookie trading system developers may have
ture performance are the hall-
good and honest intentions while not having the experience to know if a trading system is robust or
marks of a trading system ven-
over-fit. Everyone starts out as a rookie! Unfortunately, naivety and ignorance increase the risk of
dor that does not develop or
losing money and decrease the probability of a profitable outcome. If a system looks good, ask for a
trade systems.
brokerage statement confirming the trades listed in the performance report or request a third-party
audit of the trades for verification. A newer system developer that has robust strategies should will- It is said that all trading sys-
ingly agree to these measures. tems eventually stop working.
They have a useful life and
Some trading system vendors and educators are only interested in making money selling products
then expire. Some last longer
to the general public. They may never intend to personally trade their systems and they might not
than others. It is difficult to im-
even know how to develop a ro-
possible to know the future per-
bust strategy at all. They just
formance potential of any trad-
know how to sell products well.
ing system. What we can know
These vendors rely almost exclu-
is that some systems are over-
sively on persuasion as a mar-
fit to historical data and will fail
keting technique. With little to no
horrifically in the near future.
track record or established repu-
Other systems are lucky and
tation, they focus on manipulat-
may or may not work well in the
ing your emotions. You will see
future. There are also good
more exaggerated claims of prof-
systems that will become
itability and ease of use along
weaker and eventually fail as
with little to no mention of the
market conditions change and
risks involved. Often these claims
become less favorable for that
are accompanied by time limits –
system. Markets tend to be non
act now or lose out! Such asser-
-stationary; meaning their statistical characteristics change with time. Short-term performance over a
tions may be totally unverifiable
small number of trades is often very misleading even for robust and stable systems with long-term
and even blatantly “too good to
track records.
be true.” It is even possible that
you will get evidence of their Holy It is for all of these reasons that we must be diligent and make sure we are fully informed before
Grail find in the form of a nearly trading any system. The most important information on trading system risk and profit potential comes
perfect equity curve (figure 1) from the live track record of a trading system. This live track record needs to be free of any manipu-
and some tantalizing perfor- lation by the developer or promoter of the system. Parameter value changes and revisions to the
mance statistics (figure 2). rules and logic cannot be applied retroactively or the track record becomes historical with the benefit
of hindsight. We need to inspect the performance statistics of a trading system without the benefit of
Producing beautiful equity curves
hindsight in order to get the truth about what would have happened to our trading accounts if we ac-
and performance statistics is
tually traded that system with real money in real time as the signals were generated. It is for this rea-
easy enough on curve-fit histori-
son that we rely on independent performance tracking of trading systems like those from Futures
cal systems that even vendors with questionable ethics can make a living on the internet. There are
Truth Magazine.
downright dishonest people selling what they know to be bad systems with manipulated statistics
and no underlying profit potential. The temptation to go this route lies in the belief that it is much eas-
ier to manipulate emotions and statistics than it is to develop robust systems and generate a long-

AMIBROKER REVIEW (con nued)
by George Pruitt adigm I was really impressed and initially confused by Dr. Janeczko's array processing. Array processing is
extremely fast versus bar-by-bar and in many cases easier to learn. What is also very cool about AmiBroker
is that you can flip from array to bar processing quite easily.
AmiBroker Review Array programming or vector languages generalize operations on scalars to apply transparently to vectors,
matrices (2d-array) and other higher-dimensional arrays. Sounds complicated, right? It really isn't. An array
(www.amibroker.com) is simply a list of like data. In most testing scripts price data is held in arrays. When we code and use the
word High we are usually referring to the High array (list) prices of the underlying instrument. When we use a
subscript in the array we are referring to that singular element in in the list: High[6] is the High price six bars
ago. Most of the programming discussed in most of my George’s Corners has dealt with a scalar programing
and pseudocode framework. The fundamental idea behind array programming is that operations apply at
AmiBroker is a complete database management, charting, testing, trading and optimizing program. So far once to an entire set of data. An example will help clarify. How do we calculate a twenty-day moving aver-
we have covered many different trading algorithms and every one of them can be easily implemented in the age of price bar's midpoint in a scalar (bar-by-bar) framework?
AmiBroker Function Language (AFL). There are several features that make AmiBroker a serious contender
as a go-to trading platform: sum = 0
Price - The cost of the software ranges between $279 and $339 and once you purchase its yours. There are for i = 1 to 20
no lease fees. You get free upgrades for one year after purchase and it’s up to the purchaser to upgrade
sum = sum + (high[i] + low[i]) / 2 #notice the subscript i
thereafter.
next i
Speed - AmiBroker utilizes multi-thread processing which means it can utilize multicore processors and carry
out sub-processes or threads simultaneously. In other words, it is very fast. avgMP = sum / 20
Power - Portfolio level back-testing is paramount when evaluating the robustness of a trading algorithm. If an Here's how it is done in an array programming framework:
algorithm works on multiple markets, it demonstrates a high level of robustness. Robustness and positive
expectancy is all you can ask from a trading algorithm. AmiBroker provides Exhaustive Search and Genetic avgMP = MA((H + L)/2,20)
forms of parameter optimization.
A new array labeled avgMP is created and completely loaded with a twenty period moving average of price
Data - AmiBroker is compatible with many End Of Day(EOD) and Real Time data feeds. It includes a very bar's midpoint. avgMP is not a scalar or single value - it is a full blown array just like the High and Low ar-
simple to use ASCII data importer. rays. Array processing eliminates the need for additional looping and this means much quicker execution.
Broker Integration - Several brokers can be linked with the software for automated order execution. If you have a lot of experience with scalar programming (Java, C++ or EasyLanguage) then picking up AFL
might require a little patience but it will definitely be worth it. As you know learning a new programming script/
Integrated Development Environment - AmiBroker has two IDEs to help the user develop complete trading language is best performed by examining examples.
algorithms and technical analysis tools. The main IDE (AFL Editor) is a complete scripting tool and the AFL
Code Wizard utilizes a drag and drop development paradigm. Both IDEs utilize the AmiBroker Function Lan- Here is an example of a Bollinger Band type trading system that incorporates optimization. This optimization
guage (AFL) as its programming/scripting language and a vast library of strategies, functions and indicators. will search the entire portfolio space. In other words, the optimization applies the different iterations across
each market in the portfolio. You don’t have to optimize each market separately and try to configure one set
Support - Tomasz Janeczko, the founder and chief software architect of AmiBroker holds Ph. D. and M.Sc. of parameters for the entire portfolio.
degrees in Computer Science and Telecommunication received from Wroclaw University of Technology.
This developer really loves his software and stands behind it and provides much of the tech support. There PositionSize = MarginDeposit = 1;
is a devout, almost cult-like, following for AmiBroker and many questions can be easily answered be search-
len = Optimize("Len",60,10,80,2);
ing the internet and/or joining the user groups.
width = Optimize("Width",2,0.25,3,.25);
If you have purchased my prior books you will know that I use TradeStation. I love its tightly integrated com-
ponents and EasyLanguage. However, I felt like I would be amiss if I didn't show off a little bit of AmiBroker.
I was first introduced to the software through Howard Bandy's excellent book, "Quantitative Trading Sys-
Buy = Cross(C,BBandTop(C,len,width));
tems.” The software that was described in Mr. Bandy's book really piqued my interest so I contacted Mr.
Janeczko for a review copy and he more than graciously provided his complete software suite. I fell in love Short = Cross(BBandBot(C,len,width),C);
with the AFL Wizard and the speed of his backtester. Coming from a bar-by-bar algorithm development par-

AMIBROKER REVIEW (con nued) ADVERTISEMENTS )
Sell = Cross(MA(C,len),C);
Cover = Cross(C,MA(C,len));
Here are the results of testing a basket of 30+ markets for the past 16 years optimizing the lookback Len from
10 to 80 by 2 and the Width from 0.25 to 3 by 0.25. This equates ((80 – 10) /2)+1) *( (3.00 - .25) /.25 + 1) iter-
ations. Or 36 * 12 = 432 iterations across a 16-year history on 30+ markets. This optimization took less than
3 minutes on my somewhat typical lap top.
Take a look at AmiBroker. It would be worth your time and efforts. I give the software two solid thumbs up!
“An investment in knowledge
pays the best interest.”

‐ Benjamin Franklin
(1706‐1790)
When it comes to inves ng, nothing will pay off
more than educa ng yourself. Do the necessary
research, study and analysis before making any
investment decisions.

SYSTEM SPOTLIGHT SYSTEM SPOTLIGHT (con nued)
by Joe Bobek
Gatts QM
Ga s QM by Ed Hambrick is a swing trading system that we’ve been tracking since the beginning of 2014. As you
can see from the numbers below, the past 5 years have been impressive, averaging almost $13k profit per year.
Ga s QM has been ranked second in our latest Top Ten System since Release table and is one of our top consistent
performers in the crude market. The system is fairly aggressive, being in the market over 75% of the me, and trad‐
ing an average of around 130 mes per year. Although suffering a somewhat significant drawdown recently (as with
most other mechanical systems), overall performance remains robust and we feel this system is worth taking a look
at. If you are interested in a more detailed analysis of Ga s QM, please visit our website at www.futurestruth.com.

SYSTEM SPOTLIGHT (con nued) SYSTEM SPOTLIGHT (con nued)
RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK
OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRAD‐
ING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL
TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IM‐
PLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARA‐
TION OF HYPOTHETICALPERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS. THESE
PERFORMANCE TABLES AND RESULTS ARE HYPOTHETICAL IN NATURE AND DO NOT REPRESENT TRADING IN ACTUAL
ACCOUNTS.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BE‐
LOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES
SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEENHYPOTHETICAL PER‐
FORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PRO‐
GRAM. ONE OF THE LIMITATIONS OFHYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PRE‐
PARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL

VISUAL ENERGY ANALYSIS (con nued)
Visual Energy Analysis Now, here's the interesting thing. Two consecutive weekly bars would give a line. Its own line. How would
the daily react to that line? Bingo. There it was.
Example:
By Charles Drummond & JB Wells
Many students of Charles Drummond have wondered how VEA came to be. Pull up a chair and let me tell
you the story…
In the 1960's, I compiled data by hand, and drew charts by hand, and magically noted that each day had a
high and a low. With a ticker-tape, I could also chart hourly bars, creating a daily high and low.
Then, I noted that if I drew 5 daily bars, that this would give a high and low for a week and therefore I could
then also create by hand a weekly bar and chart. Then 4 weekly bars for a month bar, or 30 daily bars for a
month bar, or 12 monthly bars for a year bar. All bars. Just bars. A yearly bar chart looked like a daily bar
chart.
I then realized that all that I was looking at were bars; and without labelling a chart with its time frame, they all
looked the same.
I next examined the concept of looking at two consecutive bars only, and to draw lines through the highs and
lows of any two consecutive bars, be it on the daily, weekly, monthly, quarterly, or yearly. (The weekly line is placed on the daily chart - Labelled “52”)
Examples: (Note the monthly chart. The line through a and b provides point c
This was a major breakthrough to my mind. To place a line only through two consecutive bars, to then see
how a chart with more bars on it reacted, to that one line. I started to show this to others and they thought I
was nuts. Well, actually I am. So be it. That weekly line exists, that monthly line exists, that quarterly line
exists, that yearly line exists, whether I am a nut or not. The daily will give you five clues as to what is hap-
pening to that one weekly line, as each day passes by. This is not rocket science. It’s quite simple actually.
This resulted in such fun that I became addicted to trying things out. Created many more lines using two con-
secutive bars, realizing that any time period had all those lines. They had to. Two simple consecutive bars,
many lines. I then discovered mathematical trend analysis, thereby creating a moving average that did every-
thing it could to stay on a straight line, and this formula created more lines. Experimenting with ideas around
lines through two consecutive bars became quite addictive. And, it expressed the most recent activity of buy-
ers and sellers, related to that time period. So, what if I averaged out any two latest lines, to create yet an-
other line etc.? Eventually, I realized that no matter what line that created, it could affect price. Why this is
so, I have no idea, unless it is a simple manifestation of energy.
When using my Apple2 plus computer, starting in 1982, then IBM, then Tradestation, and Ninjatrader, I creat-
ed what seemed to be almost thousands of ideas. Very addictive. Then I got bored with it all, and honed eve-
rything down to its current stage: Visual Energy Analysis (VEA). Thusly, I went from expanding complexity to
simplifying it, from seeing where theory would fall apart, to rebound out of that, to simplicity which held true. I
came to understand that one can only push on the string so far. I recall the Apple2 Plus computer, in the
1980's, and given its aspect of programming 'conditions', I was thereby forced to create quite a few patterns,
selecting which ones were successful, to then put the best of those into other patterns, thereby creating a li-
brary of thousands of patterns, and when that number surpassed 12,000, it all fell apart. Why was this so? I
have no idea. It is weird that when one tries to perfect perfection, it falls apart. The only answer seems to be
that 'simplicity works'.
I would encourage all who use technical analysis to toy with the concept of always tying in the energy from

VISUAL ENERGY ANALYSIS (con nued) VISUAL ENERGY ANALYSIS (con nued)
another chart, be it time related or not. To my excitement, this concept seems to be taking off in spades.
Monitor the yearly technical items, as an example, with the daily items, all having the same items, but show
those yearly items on the daily chart. I try to have all charts look the same. What is on the monthly is on the
daily, thus the daily has the same analysis as the monthly. However, the daily is monitoring that monthly en-
ergy since it has more expressions of the same energy. The one minute with hourly on it, reveals the energy
of the hourly, and so forth.
Let us now look at two chart frames of energy on one chart using an overlay from a higher chart. This compli-
cated market structure of crowd energy has been simplified into what is now known as Visual Energy Analysis
(VEA).
Practicing how to manage oneself with the no pattern provides us an excellent opportunity to exit at break
even or trade the no pattern. This is a very different pattern from the yes pattern that we now have a choice to
trade from the short side. Notice that the strong trend continuation buy was traded from the right chart’s red
up arrow from a power mid termination. (Overlap of the lower green energy band and dotted white mid line)
However the trade chart to the right’s solid white line is not popping price higher and with a red brick we are
short. The upper pink energy band and upper yellow overlap (envelope top termination on the 8/4 chart) is
holding as resistance. Thereafter the crowd will have a very hard time popping up through this upper yellow
area circled twice on the focus chart to the left with the down white arrows.
Trading has become much easier on the mind and more enjoyable than having to dissect all of the previous
lines from way back when, says JB Wells; fellow friend and trader. We are both now working together to help
traders appreciate and trade a simplified geometry of the markets with VEA, says Charles Drummond.
Here we show an example of how multiple chart frame analysis works on the intraday CL oil futures contract
(it could be any instrument). The 4/2 intraday Rjay’s Renko Bar reveals our strong trend continuation yes pat-
About the Authors:
tern. There are so many clues that it is time to buy, look to the 4/2 trade chart on the right chart’s red up arrow
where there is envelope bottom termination. (Overlap of lower green and lower yellow) This trade entry joins J.B. Wells began purchasing trading courses in 1998 and began full time trading in 2001. He also spent time
the strong crowd energy from the higher chart (not shown) represented on the focus chart to the left with an researching and developing his own trading software and ideas. He had success using a method based on
overlay of its higher chart’s energy structure (16/8). Notice the solid white mid line on our focus chart to the volume, trading futures and options simultaneously.
left, represents the crowd’s energy of this 8/4 chart revealing that it is still bullish by the green bricks staying
above the solid white mid line. (The same 8/4 solid white mid line is drawn on the trade chart to the right with In 2003, J.B. found Charles Drummond and has been a student of his ever since. As a student trader of
a dotted white line) Note the trade chart to the right’s solid white mid line is still popping price higher as well. Charles Drummond, J.B. helps with client support & his own trading.
Eventually this trade reaches a weekly upper energy band (UEB) where the crowd distributes, for us we exit
our trade. Charles has programmed the code for Drummond Energy Bands and allowed J.B. to learn many of his trad-
ing strategies and coding styles.
Charles Drummond was born and raised in Ontario, Canada. As a young man he enjoyed studying literature
and geometry in school. His market experiences started in a conventional way with various experiments in
buying stocks and commodities. He lost money on penny stocks, he lost money on futures contracts, he lost
We continue to look for a strong trend continuation pattern (but realize we may be topping out) and the mar- money following broker recommendations. After these losing experiments, he decided that if he was going to
ket reveals a no pattern for the buy. Understanding the yes and no pattern is critical to any trading business. lose money, it would be in his own way, and not following the recommendations of others, and began his seri-

VISUAL ENERGY ANALYSIS (con nued)

ous study of the markets.
During the 1960’s and early 1970’s, as he was trading in a variety of markets, Drummond experienced very
substantial success. During these years he developed the basics of his market theory, and published these
findings privately in a series of books, starting in the late 70’s. During the 1990’s he continued to add to his
theories and develop new insights and has published a number of significant enhancements.
Charlie has simplified all of his original theories in 2015 and has made them only available here on theDrum-
mondEnergyBands.com website. He is no longer affiliated with any other websites on the internet today.
Drummond has always had a small group of private students and his theories have been taught by several
market technicians. Dean A Handley, PhD, MBA, JD
Founder, Global Trade Titans
He has realized that not everyone may need or even be capable of analyzing and maintaining a trade plan
over multiple chart frames; though this is how he began to trade when he was telephone booth trading in the
Past Performance Does Not Guarantee Future Results. This is a standard decrepit disclaimer that is as well recog-
60’s.
nized as it is ignored [1]. It is given for legal liability in the event that a consumer of the advice acted on it and the results
All this has led Charlie into developing this new insight, simplifying his life’s work of market structure (i.e. five proved to be less than expected, or even the opposite. In addition to its futility as a warning, it flies in the face of reality: all
(5) kinds of trading) into a Visual Energy Analysis (VEA) software called Drummond Energy trading strategies are based on past performance. Past performance is all we have and if not past performance, what bet-
Bands. VEA reveals how market structure is really just pure organic energy that is not time related. ter metric would exist to determine what trades to take? Past performance is accurate for the past and is always 100%
Drummond currently lives in Eastern Canada where he trades and maintains an organic vegetable farm. He correct, where in lies its elegant authority: any question we ask it will always yield a truthful answer. So if we ask the right
produces videos for his students in Drummond Talk and is working on several new books. questions of past performance, perhaps it might just illuminate future results. I have been mining past performance to
mathematically prognosticate future results for many years, spanning over 200,000 historical trades. The system I use to
evaluate historical data is called Phalanx Futures Trading™ (globaltradetitans.com); is the same system used in True
North Trading. This paper will cover the critical features of what I have learned and how you can apply this trading system
to any room you trade in or to your own trading.
Phalanx Data Compiling and Stratification:

Futures trade data, extracted from the past or captured in real time, needs to be organized in your spreadsheet so as to
permit specific assessments. These are the main types of stratification and shown below and data from various other trade
rooms is included for illustration.
ADVERTISEMENT
1. Stratify by index. Not all indices are traded equally. With almost all specific trading methods or logics, uniform appli-
cation to futures trading will reveal differences in average index trade profits. This is true for human trading; somewhat for
robot trading. Any individual trade method will show moderate to large differences in profitability among the indices for
reasons that are oblique or hidden but present consistently over time. Do not expect average trade profits on indices to be
comparable; what is reasonable is that some indices will outperform others. By watching some 20-40 trades in each index,
you will observe such average P/L differences, so be prepared to bench the weakest indices for continued sim trading until
they can demonstrate sustainable and acceptable profit levels.
Of note: I have seen some rooms where it seems their methods are equally successful to all
indices: consider Open Range Trader (Joe Dupont head trader), where exceptional
~$11,000 profits per month; individual weekly profits of $3345 and even $6000/trade profits
reveal all indices in full profitability.
2. Stratify Buys vs. Sells: In well over 100 rooms where I have evaluated track records in great detail spanning many

PHALANX FUTURES TRADING (con nued) PHALANX FUTURES TRADING (con nued)
months and thousands of trades, I have seen fairly consistent differences between P/L for buys vs. sells, such that one is week are created equal nor are times of the day. Most amazingly, trade strategies will serendipitously have better and
superior and the other inferior. This presumably reflects clandestine strategy alignments with index price moves that result worse days of performance as well as better performances in the morning vs. afternoon.
in either longs or shorts being favored one over the other. The financial horsepower and trade commitment needed to raise
price are different from that needed to lower it. Long/short superiorities can be easily identified by stratifying historical trade Now we know what indices trade the best, whether longs or shorts, the best day(s) of the week and if you trade all day,
results as average trade profit from all long and short trades, as cited below: and (if you trade all day) how do mornings compare to afternoons. That data alone is informative but lacking sufficient di-
mension to provide an optimal understanding of futures results. What we need to do is to generate much more past perfor-
● CL shorts; 100 trades; 3 contracts per trade: -$18.90 average P/L. mance for any single trade, say 1000% over its current data content. The Nested Bracket Trade technique does this
● CL longs; 100 trades; 3 contracts per trade: $104.55 average P/L. (Futures Truth #1, 2016) as detailed below.
So the first facet of the Phalanx Trade System: look at what indices perform best and then stratify trade results based on 4. Stratify P/L from Nested Bracket Trades: Any one individual trade most often has a single entry and a single exit
longs vs shorts. (target or stop). Mathematically speaking, this is wafer thin data so I developed NBT, where the original entry is ex-
amined against as many as 10 target/stop choices, each designed to ask for more profits. My selection of targets is
3. Stratify by Time: Time is a silent sovereign over profits. We perceive time as linear and constant but the time frame based on frequency histograms of historical price deltas but yours can be based on simply larger and larger profit
by which a trade is taken can affect its outcome. I stratify trades by time to capture P/L ef- choices, each having a correspondingly larger stop (i.e. 1:1 risk/reward ratio).
by James Breen
fects based on the day of the week (diurnal variation) or based on time of day (circadian
rhythm). In this manner we may observed what days (or time of day) that achieve maximal trade profit in a manner shown By using NBT amplification through 10 different target/stop ratios, we can increase historical data 1000%
below. over the actual single-trade P/L results, forcing the past to yield 10-fold more data than originally occurred.
Now the data from one original trade will yield data from 10 trades, each having the same entry but different
I average P/L as a function of day of the week (M-Tu-W-Th-F; normalizing to a uniform number of trades) and very often I targets. So at the end of 100 trades, we will have data from 1000 trades. While most of us would normally
consistently see days that are extremely profitable and others that are not. I observe results for 1-2 months to avoid tem- average the P/L values to get a mean performance, trade data is not normally distributed but instead bimod-
poral distortions. After evaluation, I avoid days that exhibit an anemic P/L and increase contract sizes on days that are the al, consequently means or averages are corrupt values and will do you a disservice. Rather add up the total
most profitable. As with all assessments, I keep this data in a running evaluation format so as new data is added, the old- net profit of any bracket trade over say 10 trades (i.e. total reward), divide by the stop size times the number
est data is jettisoned. My evolving observations form clear dichotomies in overall performance. An example time stratifica- of trades taken (i.e. total risk) and if the risk/reward ratio is 0.4 or greater you have a strategy that is fit for
tion was seen in Alpha Wave Traders, where over 6 months I observed an average P/L of 296/3 contract trade on Thurs- use. Next choose the strategy that yields the greatest overall profit and you will have your best strategy.
days and $27/3 contract trade on Fridays (MarketClips 05.06.2013). This is a precise expression of diurnal variation, an
observation that was met with severe consternation by that group as they were unprepared to accept much less adapt to 5. Pullback (PB): Observe, record, apply. Virtually all trades exhibit pullback (heat) after entry but it turns out that the
such information. pullback in trades destined to succeed is indistinguishable (except in magnitude) from pullback in trades destined to
fail (TraderPlanet 141; 03.24.2015). So how to know the difference? Measure the amount of pullback for all successful
It is possible that exceptional trade performance can be impervious to diurnal variation: in trades and find the average. That average will tell you where about 50% of all successful trades will pullback. So after
Trading Futures in Action (Bob Amico Head Trader) their weekly $2512 weekly average your official entry, ask and answer this question for each modeled trade: If you added an additional contract at the pull-
(over last 27 weeks) reveals strong daily performance: Mon: $299; Tue: $338; Wed: $683; back average, how did you do? While PB entries occur less often than the official entry, they afford extra time to exe-
Thu: $688; Fri: $622. Furthermore, Trading Futures in Action may in fact minimize diurnal variations through their recog- cute - a bonus in fast scalping times and perhaps better fill rates in low volume markets. And as they are limited or-
nition and responses to changing market conditions, wherein they have changed the indices they traded, adjusted targets/ ders, you avoid market entry costs.
stops and even began opening the room 1 hour earlier to capture more of the European opportunities.
Putting It All Together: The Phalanx Futures Trading™.
An excellent example of circadian rhythm comes from Strategy Lab, where I observed remarkable differences between P/L
in the morning vs. the afternoon in the same index (Market Clips 08.19.2013): Phalanx is a trading system that puts past performance on steroids, then sorts and stratifies that performance
TF longs at 3 contracts/trade: am $240 vs. pm $61 output and harnesses the final data to provide trade strategies to choose best to maximize future P/L. Each futures trade is
ES sells at 3 contracts/trade: am $2 vs. pm $161 tethered to its detailed historical counterpart, aligned for index traded, trade type (buy vs. sell) and time frame for execution
(diurnal variation, circadian rhythm). By modeling each trade with up to 10 different targets using the NBT, it is possible to
These are official entries and exits and results according to official posted P/L value. So remember: not all days of the amplify historical data by 1000% or more. Add to this trade heat signature from pullbacks and this total package of data

PHALANX FUTURES TRADING (con nued)
yields far greater insight related to optimal profits and best strategies to achieve those profits.
SYSTEM VENDOR INTERVIEW:
Of the several new rooms I am evaluating, Trade for Greatness is a private trade room
that employs trade modeling to account for index and type of trade, time and day and
other historical assessments relevant to immediate trade selection and strategy. Con-
sistent with Phalanx type of assessments, this room will project expectations and out-
comes before trades are executed. Having read my papers, Trade for Greatness is truthful, transparent and profitable and
has the potential to be the next Global Trade Titan.
The Phalanx Trading System and recent room reviews are located at globaltradetitans.com, as are short video on sub-
CLOCKWORK GROUP
jects such as Chat Room vs. Trade Room, Greed is Good, Track Records – Legal or Not, Trade with God and over two
dozen rooms reviews as well. These videos are short, factual, to the point – no-nonsense.
Global Trade Titans are trade rooms that trade truthfully, transparently and profitably. These attributes distinguish them How did you get into the futures business? calls and lastly, the filtering process of all the
among the 1088 sites/rooms I have evaluated and place them at the 99th percentile of performance. noise.
My dad was a stockbroker, when I was growing up
I was fascinated with his ticker tapes, charts, re- Only when I sense all is well and normal for our
search reports, screens etc. Additionally, an old clients, can I let my guard down.
Author disclosures: All of my publications, videos, room evaluations and Trade Titan recommendations are at my free library: globaltradeti- fraternity friend was in the business and actually
tans.com. In addition to futures trading, I offer futures trading consultation on the Titans, any other room, strategies or methods for trading as well mentored under Futures Market Wizard, Michael
as the Phalanx method. I sincerely thank John Murray for his expert editing and editorial revisions to this paper. Marcus. We spent some time studying, research- What inspired you to create trading systems?
Reference: http://www.forbes.com/2010/04/16/fund-performance-ads-personal-finance-sec.html ing, testing systems on the TIME axis, not the
PRICE axis that most of traders/investors look at. More like who, a former technician & my mentor, it
Squaring both price and time, dates, minutes, sec- would take up the whole magazine.
onds in highly liquid traded markets, seeing this
second dimension most missed, this paved the In a nutshell, I met one of the industry's top traders
ADVERTISEMENT way for Clockwork, its philosophy and methodolo- back in 1994-1995 who pointed out to me that sys-
gies... A long the way I teamed up with a number tematic trading would be the wave of the future.
of engineers, traders and programmers, we work He noted that the amount of money under man-
as a team, group approach and we now agement by capable individuals would swell ten-
boast intellectual capital from the fields of trading, fold and that “NOT” trading “Futures was risky!
technology, research, meteorology, risk manage-
ment and engineering - all to solve complex finan- I then had this notion that developing systems for
cial problems that have an impact on the worlds non correlated asset classes, systems that delved
futures markets. in futures and forex trading would be in high de-
mand by those that speculated or hedged with
said market vehicles due to their complexity and
How to do you prepare for your trading day? specialization. Kinda akin to Atlantic City or Las
Understanding that trading is a strenuous day- Vegas sports-books, making lines on exotic prop
to-day business, is there any ritual? bets for their high roller clientele, only much, much
bigger.
Absolutely, 1st, the obvious java jolt, followed by
the scanning of my monitors, the markets, looking I wanted in…
for any large percentage moves, looking for easy
entry points in fast moving markets, akin like a
Jaguar zeroing in on the small antelopes of the How did you get into systems development?
herd. Read 3 newspapers, (The Wall St. Journal,
Investors Business Daily, USA Today) check a few Curiosity, and most likely impossible without a
international news wires, check the various over- System Writer as I was not a programmer nor soft-
night trade fills, logs, time & sales, a couple phone ware developer at the time. I knew the Cruz Bros.

VENDOR INTERVIEW (con nued) VENDOR INTERVIEW (con nued)
the original founders of TradeStation, f/k/a Omega Are most new traders’ expectations unreason- See the above answer relating to money manage- How? Key word-“consistently”, flipping the code to
Research, from high school. System Writer was able? ment! reverse its losing ways into winning? Sometimes,
their 1st and flagship product and we gave that a its that simple!
go, Easy Language, was, well easy and we started Yes, extremely so for most, then again, as with Pay close attention to the advice received from
tweaking ideas, again, mostly ideas dealing with any business the outliers standout. veteran traders, brokers & advisers, those with Trading systems fail mostly due to intervention by
TIME not price, quant type ideas, ideas that con- real war stories, those armed with vast experi- the human element. Whether by fear, greed, sec-
tained many “what ifs”... Then SuperCharts and The instant gratification seekers are plenty and run ence, the been around the block types, extremely ond or third guessing, trying to fix/tweak some-
TradeStation surfaced, the industry kept growing rampant in this industry. A very high burnout rate priceless stuff there! Have a mind of your own, thing that is not broken, once you deviate or over-
and the appetite for quantitative type of trading in the industry also exists, however, the traders question all, why a 200 day Moving Average? and ride a systems rules, logic or data set, there is no
systems swelled. Additionally, futures managed with real hedging vehicles, non correlated systems not a 189 MA? or why those 12, 26, 9 MACD system...
accounts were being introduced and touted by the and oriented towards adding value, are the most #settings? Do your homework, your own research,
major wire-houses and several of the leading likely to succeed in our opinion. crunch your own numbers, manually enter your
CTA's trading said managed accounts and man- data, memorize key phone numbers, that speed
aged pooled funds required additional cutting edge dialer or memory card will not function one day. It
trading systems, software and other trading tech- Do you have any special advice for new trad- keeps you honest and those numbers remain
nologies to supplement their trading and keep ers that you wish you’d had when you were somewhere in the back of your head for a rainy
pace with this growth spurt. We found a home and getting started? day... This business is like any other professional
helped fuel the algorithmic trading system indus- association such as medicine or law, you must al-
try, the rest is history… Really study the Money Management aspect of ways keep practicing, studying, adapting...
the business... This is a topic on its own and worth
every ounce of energy researching, studying and Lastly, we invite all interested interns / students
Do you think it’s possible to use a pure sys- applying... This end of the business separates the from any academic discipline to participate in our
tematic approach without any discretion at all? boys from the men, weak from the strong, and it is training program. We will provide them with pro-
Paramount. In trading, specifically highly lever- fessional trading software, a structured curriculum,
Absolutely. We have seen portfolios successfully aged instruments, the rewards better be very trading contests, FINRA Series 3 exam study ma-
trading a basket of low correlated futures systems. sweet because if you have to risk too much money terial, on-line chats, social media forums, work-
The equity curves are consistent and draw-downs before you finally get to the exit target, perhaps shops and other resources.
are greatly minimized. the system is not for you. Due to the wide array of
traded futures instruments, the various margin re- What are your favorite markets to trade?
quirements and such, we follow a formula that is
Where are the best financial opportunities consistent, an industry standard on risk so to Energy Futures, Precious Metals, Stock Indices &
now? speak. Industry professionals / peers recommend Currency Futures, in that order... That said, I like
risking no more than 2.5 – 3.5 % on any single volatility and liquidity more than specific markets.
Forex, Futures and Bitcoin. Hard to beat the lever- trade, so armed with this number averaging 3%, Come to think of it, I am looking for a Printer to
age and costs associated with trading Bitcoin, we work backwards, so on a $100k account that print me “I Love Volatility” bumper stickers… “An investor’s worst
Forex, Futures and / or the Options markets. would equate to -$3k max risk per trade. That
would also equate to a $30.00 move in gold, a enemy is not the
$3.00 move in Crude Oil, or a .07 cent move in Do you think a one algorithm approach to all
What do you think are the hot markets this Unleaded Gasoline, we then align our money markets is realistic? stock market, but
year? Do you have any inflation, or economic management with our respective systems stop(s) /
disaster, forecasts? sizing. In today's marketplace and volatility land- Yes, in theory, a good algo should work across his own emo ons.”
scape, a $30 stop in Gold might be too much for multiple markets AND multiple time frames, that
Bitcoin, US Dollar Index, US Treasuries, Sugar, one contract, however, trading two contracts with said, no matter how robust that one algo appears

Copper, Gold and Platinum. a $15.00 stop or four contracts utilizing a $7.50
stop from entry might be more plausible and /or in
to be performing, diversification, proper risk man-
agement and weight allocation is paramount.

We are forecasting higher interest rates in the line with the respective systems stop loss internal
‐ Author Unknown
USA, we also see a shift in administration, fed pol- mechanism.
icy and continued independence, ie Scotland, Do all systems fail eventually?
Wales, Catalonia, etc.
Is there anything that you would tell to those Many do, however, I like our algos, in our opinion,
Needless to say the emerging markets will be the new to trading commodities or stocks that you as long as 1+1 = 2, and January-December exist,
first and hardest hit. wish someone had told you when you were they will continue to shine! BTW, show us a sys-
getting started? tem that is "consistently" losing money, our staff
will try to convert it into a Top Ten trading system,

FOR THE RECORD FOR THE RECORD (con nued)
CFTC Orders Florida Residents Ted L. Romeo, Richard D. Schru , and Their Company Cypress Wealth Management
Enforcement Press Releases Group, Inc. to Pay Res tu on and Civil Monetary Penal es Totaling More than $530,000 in Precious Metals Enforce‐
From the CFTC ment Ac on, 7376‐16, 05/26/2016.

March 2016 June 2016

CFTC Charges Virginia Resident Tracy Lee Thomas and His Firm, Cayman Islands‐Based Marbury Advisors Inc., with CFTC Orders Bitcoin Exchange Bi inex to Pay $75,000 for Offering Illegal Off‐Exchange Financed Retail Commodity
Fraudulently Solici ng over $1.2 Million in a Commodity Futures Scheme, 7348‐16, 03/25/2016. Transac ons and Failing to Register as a Futures Commission Merchant, 7380‐16, 06/02/2016.

CFTC Charges Georgia Resident Hendrik A. Van Beuningen and His Company, DeBrink Trading Fund I, LLC, with Fraud, CFTC Charges Haena Park and Her Companies Phaetra Capital GP LLC, a/k/a/ Argenta Capital GP LLC, Phaetra Capital
Misappropria on, and Registra on Viola ons in Connec on with Their Commodity Pool, 7350‐16 , 03/31/2016. Management LP, a/k/a Argenta Capital LLC, and Argenta Group LLC with Misappropria on and Fraud , 7382‐16,
06/03/2016.

Federal Court Orders Florida Resident Rico Omar Cox to Pay Over $940,000 and Imposes Permanent Trading and Regis‐
April 2016 tra on Bans for Solicita on Fraud and False Statements in Commodity Futures Fraud Ac on Brought by CFTC, 7383‐16,
06/03/2016.
CFTC Announces Whistleblower Award of More Than $10 Million, 7351‐16, 04/04/2016.
CFTC Charges Three Men and Their Florida‐Based Berkley Companies with $2.7 Million Precious Metals and Rare Dia‐
Federal Court Orders UAE Residents Heet Khara and Nasim Salim to Pay Combined Civil Monetary Penal es of $2.69 monds Fraud, 7385‐16, 06/07/2016.
Million for Spoofing in the Gold and Silver Futures Markets, 7353‐16, 04/05/2016.
Federal Court Orders Florida Resident Todd Owen Marshall, Harvard Assets LLC, London Assets Inc. & Harvard Interna‐
CFTC Orders Staten Island‐Resident Michael Pucciarelli and his Company, Badge Trading LLC, to Pay a $280,000 Penalty onal Trading, Inc. to Pay More than $2.4 Mln for Engaging in Illegal, Off‐Exchange Precious Metals Transac ons &
for Engaging in Unlawful Noncompe ve Exchange for Physical Transac ons, 7355‐16, 04/05/2016. Registra on Viola ons, 7393‐16, 06/20/2016.

CFTC Permanently Bans Brian Hinman from Trading and Registering with the CFTC and Imposes over $141,000 in a CFTC Obtains Default Judgment Orders against Three Magee Family Members of Calgary, Alberta, Canada, for Com‐
Monetary Penalty and Disgorgement for Aiding and Abe ng Commodity Pool Fraud, 7360‐16, 04/12/2016. modity Pool Fraud, 7394‐16, 06/20/2016.

CFTC Orders New York Resident Nathan Schleifer and Galileo Trading to Pay Res tu on and Penal es Totaling More
than $1.6 Million for Commodity Futures Fraud , 7361‐16, 04/12/2016. Federal Court Orders Dante S. Giovanne and His Companies Emini Experts, LLC and Capital Trading Concepts LLC to
Pay over $2.7 Million in Res tu on and Monetary Penal es for Commodity Pool Fraud and Other Viola ons of the
CFTC Announces Addi onal Names to Its List of Foreign En es that Illegally Solicit U.S. Residents in Forex and Binary Commodity Exchange Act, 7395‐16, 06/22/2016.
Op ons, 7363‐16, 04/18/2016.
CFTC Charges Former CBOE Member Alvin Guy Wilkinson and his Connec cut‐based En es with Fraud, Misappropria‐
on, Failing to Register with the CFTC, and Making Misrepresenta ons to the NFA, 7398‐16, 06/28/2016.
May 2016

CFTC Orders Chicago‐based Cunningham Commodi es, LLC and its Controller Salvatore Carmen Russo Jointly to Pay a
$150,000 Penalty for Failing to Immediately Report a Customer Segregated Account Deficiency, 7366‐16, 05/09/2016.

CFTC Orders Ci bank to Pay $250 Million for A empted Manipula on and False Repor ng of U.S. Dollar ISDAFIX Bench‐
mark Swap Rates, 7371‐16, 05/25/2016.

CFTC Orders Ci bank, N.A. and Japanese Affiliates to Pay $175 Million Penalty for A empted Manipula on of Yen LI‐
BOR and Euroyen TIBOR, and False Repor ng of Euroyen TIBOR and U.S. Dollar LIBOR, 7372‐16, 05/25/2016.
Federal Court Orders California Resident David Bryant to Pay More than $6 Million in Res tu on and Penal es for
Fraud and Misappropria on, 7373‐16, 05/25/2016.

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PROMOTION & PERSUASION (con nued)

AMIBROKER REVIEW (con nued)

AMIBROKER REVIEW (con nued) ADVERTISEMENTS )

SYSTEM SPOTLIGHT SYSTEM SPOTLIGHT (con nued)

VISUAL ENERGY ANALYSIS (con nued)

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Phalanx Data Compiling and Stratification:

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