Hot Systems


What makes ETF Timer a "hot system" at the moment?


Ms. Naivete,

I agree that ETF Timer has had its problems the last few months.

However, I just did a scan on The Grid for all stock systems over 730 days old, with profit factors greater than 2, Sharpe greater than 1.5, max dd less than 30 and annual return greater than 50 and only two stock trading systems showed up.

Of those two, ETF Timer has a much higher annual return.

So although it has not performed well since July, it is clearly the best stock system over the past 2 years and in 2010, it is still ahead of the S & P 500.


Thanks, Mike. Regardless, I would like to hear an answer from Matthew Klein.

The systems are chosen by a software algorithm that mathematically weighs various factors including long-term return, dollars allocated via autotrading, short term return, page views, etc. No human specifically picks these systems, although of course a human long ago wrote a math formula to select them.

Institutional Broker FX is "hot strategy" at the moment and shows" last 30 days -9.9%, while excaliburfx is "cold strategy" and shows "last 30 days -2.2%"

What is wrong with your "math formula to select them", Matthew?


I can’t understand why someone would complain about a trading-system web site that highlights its losing systems prominently on its front page, right next to winning systems – which is exactly what C2 is doing in this case. We’re scrupulously objective and transparent, to a fault.

Sure, there are bad systems on C2, and some of them are labeled under the “Hot Systems” category because they have enjoyed a recent run of popularity. As I said in a previous post, the math formula which selects the systems that appear on this site’s front page takes into account several different factors. Popularity and frequency of autotrading are two important factors among several.

So I do not agree with you that the formula is broken. Rather, I think the results returned by the software algorithm are - if anything - extremely interesting to users of the site, and hopefully serve as effective warning about the dangers of trading. You can lose money, as well as make it. Such is the nature of trading, and I see no reason to hide this fact from our users.

Matthew, it is not a complaint. It is an attempt to follow your logic behind your "math formula which selects the systems". Do you use the same formula for both "hot systems" and "hot strategies"? They are not the same, are they?


You have just said "and hopefully serve as effective warning about the dangers of trading". So, what was your "Nine Ugly Girlfriends - a list"?

How does the "List" "serve as effective warning"?