It appears to me that a well chosen trailing stop would be useful for this system. I have no idea if using it would have avoided the "disaster" trade near the end of 2008 (followed immediately by a great rescue trade and then some), Looking at recent June performance I have to ask why we could not have taken profits in the upper 40s rather than riding it down to the lower 40s. The market has been dangerously sideways/toppy and hesitant, and drifting lower, not unsimilar to the behavior at the end of 2008.
This timing system exhibits a certain stubborn quality and perhaps could be more agile. On the other hand, the track record speaks for itself, so my comment is offered with uncertainty and I would like to invite comments from others. [LINKSYSTEM_30415311]
My reference to the upper and lower 40s reflects the fact that I have used TNA/TZA as a substitute for QLD/QID. Sorry I forgot to note that.
GENERAL COMMENTS:
I think that when you subscribe to a system, you should follow it as-is, or not at all.
If you find yourself second guessing signals, developing your own improvements, etc, then I’d conclude that the system is not for you. And trying to trade a system you don’t agree with will end badly for you - regardless of how well the system itself does.
ETF TIMER SPECIFIC COMMENTS:
This system is far and away the best system on C2. It wouldn’t surprise me if hedge funds subscribed to it, and likely have tried to re-engineer it. It is that good.
75% annual return, 27% max drawdown (that lasted less than one month), 4 losing months out of 30…
Why do you think it needs improvement?
Warren,
As an ETF Timer subscriber, I certainly sympathize. I had a nice little unrealized gain of $5,000 early Monday morning and watched it get frittered away to less than $2,000 by noon today. Hard to take by any measure, and only my confidence in the vendor has made me stay the course. I completely agree with everything Kevin Davey said â if Jim (ETF Timer vendor) had believed that a trailing stop would improve his system, he would have implemented it a long time ago.
I recommend that you stick to Jimâs system description and stop playing the TZA/TNA pair as a substitute for QLD/QID. You are going to experience a lot more volatility/emotional swings with a 3X leveraged ETF, and the TZA/TNA is indexed to the Russell 2000 anyway. Whatever combination of indicators Jim uses to play his strategy, Iâm sure he has a good reason to track the Nasdaq 100 instead of the broader market. For example, last May 20 the QLD lost 7% while the TNA you are playing lost 15%. Yesterday, the TNA lost 3 times what the QLD lost. So give yourself a break, switch into the QLD/QID, place your full trust in this vendor, and sleep better at night.
Kevin (and Mark, also),
I thank you both for your feedback. Tinkerers often mess with a system, distort its performance, and then discard it. I agree in principle with all of the comments. Some of us have a hard time following a system and need more trust and humility when faced with a proven track record. I will try to take these comments to heart and apply them. My anxiety is prompted by my intention to stop trading on my own and to automate my portfolio.
I hope this provider will be around a good long time.
Warren -
I hope my comments help. I read a lot of Van Tharp’s work, and what turned things around for me was his course “Finding a Trading System That Fits You.” It is really true - you must be in sync, and in total agreement with, whatever system you are trading.
I wish you much success.
Kevin Davey
Absolutely right. And that is often how people move from trading others systems to developing their own, it’s a journey well worth taking and will tell you a lot about yourself. I have also done the same Tharp course and highly recommend it.
