I would like to take a moment to explain some details regarding my trading system, Texas Doubledown. YTD performance +69.7% with a max drawdown of -11.5%, and a Sharpe Ratio of 5.01.
This is a discretionary, long/short equity trading system. Portfolio positions will often be scaled into using 2-3 tranches, possibly spanning hours or days. There will be occasional day-trading opportunities when market conditions are favorable toward doing so, where a trade will be entered and closed intra-day.
This system is not purely mechanical, and relies on human expertise before deciding to enter a trading position. While powerful statistical modeling and screening tools are used to create a profitable trading strategy, purely mechanical trades will never be executed on Texas Doubledown. The only trading ‘system’ to stand the tests of time is that which is operated by a human expert trader. Purely automated, mathematical and statistical systems will succeed only in certain market environments, only to fail drastically when the market conditions change. You can see this at the moment with the disturbing recent performance of most of C2’s ‘Leading Strategies’ mechanical systems. In a choppy,volatile market these systems signals will turn out to be misguided, and you will see past gains disappear, never to return. Mechanical systems should only be used as a ‘tool’ by a human mind able to weigh many variables simultaneously and react to real-time events with intuition and decisiveness.
This trading system has been developed over the last 5 years by a finance professional with significant experience in the financial sector and managing money. The manager began their career as a professional securities trader at a hedge fund and has been actively trading the market and creating portfolio strategies ever since. The first stock trade placed by the portfolio manager in his own discretionary account at the age of 15.
The Texas Doubledown trading system will shift from direction oriented to market neutral strategies depending on the opportunity set provided by the markets. The portfolio manager excels at trading volatility, special situations, and maintaining disciplined entry and exit points. The system’s objective is attaining the highest possible total return while systematically limiting losses. Returns and trading activity will coincide with the opportunities presented as demonstrated by the substantial returns associated with the high volatility in oil in Q1.
Energy, particularly oil & gas, is likely to be a consistent portfolio component as the portfolio manager has an extensive background in trading, researching, and investing in this asset class.
I recommend a minimum account size of $25,000 to effectively trade this system as designed. I recommend using the ‘auto-trade’ feature and linking my system to your Interactive Brokers margin account. (I have found Interactive Brokers to have the best availability of shares to short sale)
Below are some newly implemented portfolio guidelines to further enhance the risk to reward characteristics of this system, and that make Texas Doubledown more attractive to a larger demographic of subscribers.
Risk: Medium - Medium/High
Long Position Management: 20% Cap gains before realizing profit. 10% Max loss per position.
Short Position Management: 15% Cap gains before realizing profit. 10% Max loss per position.
Position Size: No Position over 20% of total portfolio value.
Market Neutrality: Remain mostly neutral
Trade Frequency: Between 10-25/Month
Order Type: Mostly limit, market orders in more liquid securities
Targeted Position Number: 15 or less
Total Return Goal: 50% Annual Return
Drawdown Goal: <20%
There has been a high level of confusion regarding my ‘scaling in’ strategy vs. utilizing a ‘Martingale’ betting strategy. I prefer to start my trades using smaller size, and getting a feel for how the issue is trading and reacting to the market environment. I may then decide to ultimately scale into a larger position using multiple tranches, to obtain a better overall price, or because my confidence in the trade has increased. Price movement against me does not dictate the sizing of the intended position, nor do I keep increasing the size of the ‘bets’ as the position moves against me. I fully understand how ‘Martingale’ systems end up if they do not have the required condition needed for them to succeed: Unlimited Capital. C2 does not allow for trading with ‘unlimited capital’, and a sophisticated trader would never engage in Martingale tactics at the expense of long-term success.
Many of the larger trades that I enter will consist of day-trades, where I will cover a portion of the position prior to the market close. Many times I ‘size down’ positions right before the close in order to minimize over night risk. I am actively measuring and limiting risk with frequent scaling into and out of positions. I use the same exact ‘scaling’ strategy when exiting a profitable position; many times locking in profits by selling multiple tranches as the market dictates. There are times when I will ‘scale in’ and ‘scale out’ of a certain position multiple times around a core holding. This is because I see a ‘shorter term’ opportunity for a profitable trade within a longer term move that I expect to materialize. By locking in profits(or limiting losses) and being very tactical in managing my positions, I judiciously minimize the overall system risk.
My system will work best for those who are willing to hold on through a little bit of volatility, and commit to a minimum of 2-3 month time frame to trade based on my system. There is always the possibility of an immediate drawdown when you join a system, and being willing to ‘ride it out’ and realize the fruits of my labor will be impossible without exercising some patience.
My System is currently up +69% with a maximum drawdown of -11.5%. My system is 97 days old. I have a Sharpe ratio of 5.01. If you think what you are looking at is luck, then perhaps you should invest in the system that only buys and sells Apple stock, I hear that one is a ‘leading strategy’.
I have had the same ‘haters’ and naysayers who speak out against my system and send me nasty private messages, as well as posting falsehoods and half-baked arguments on the public forums here on C2. They attacked with the same arguments when I was only up 20%, and it is of no surprise to me that they do the same when I am now up 70% YTD.
It is time for you to subscribe to my revolutionary trading system 'Texas Doubledown. My subscribers are very happy with my performance, and I can provide personal references from clients who are thrilled to work with me toward building long term wealth with our team. It’s time to trade like the smart money. I am selling more than a system here, I am hoping to build a long term successful working relationship that will prove to be invaluable over many years.
Best of Luck Trading.