I first marketed it to the public in , and since release, it's consistently been one of the best commodity futures trading systems around. None of the four portfolios we recommended in the trading manual had a losing year for nine straight years. But starting about the year , the basic commodity markets were becoming increasingly volatile. I sought to find an answer to commodity futures trading in the new, more volatile environment and focused on risk throughout a signaled trade.
The answer I found was relatively simple: Or, if risk gets outside of normal bounds during a trade, the trade should be exited.
The commodity trading futures performance reported in on this website is hypothetical. It is based on the use of computerized system logic on CSI data. Please note the following Commodity Futures Trading Commission disclaimer on hypothetical trades:.
The performance of the strategy is fairly consistent across the commodity groups, with the currencies, energies, US financials, and metals trading the best. In this group of 60 commodities, only 1 has seen a loss in it's lifetime. This is remarkable considering the fact that the exact same rules and parameter values are used for the whole set.
Each portfolio uses diversification across the groups, and a first-N-in-a-group trading approach. The smallest portfolio was built by selecting the lowest risk, best performing commodities. Risk was always considered first. Succeeding portfolios build on the last by adding more commodities to each group.
The portfolio is diversified across seven commodity groups to gain exposure in uncorrelated markets. The commodities in each group have been carefully chosen for their profit-to-risk characteristics. Only one commodity in each group is traded at a time, and a one-lot is traded.
The following equity chart shows portfolio growth since As the graph shows, equity buildup is fairly smooth and consistent. As equity builds, the portfolio can be expanded to maintain a high rate of return. The following table shows the Aberration trading system starter portfolio performance year-by-year. The column marked average start-trade draw-down is compiled by finding the start-trade draw-down for the portfolio starting at each trade origination and then averaging the results.
For example, if the portfolio generated 30 trades in a given year, 30 portfolio equity curves would be generated, one starting at the trade origination of each trade, and the low equity point found for each equity curve. The maximum start-trade draw-down for the year represents the largest point below starting equity a trader would have seen had he started trading the portfolio at the worst possible time that year.
Note that the start-trade draw-down tests every trade originating in a given year, but that the low equity point may occur in the next year.
These are reported in the trade origination year averages. By looking at the distribution of all start-trade draw-downs, a probability of success can be determined. The following figure shows the distribution generated by the software. It shows the probability of experiencing a start-trade draw-down of a certain amount of dollars or less. If margin estimates and starting account equity are factored in, the probability of success can be determined.
On average, there are 3 group trades on at a time. Only two commodities in each group are traded at a time, and a one-lot is traded. The following table shows portfolio performance year-by-year. Figure 10 shows the distribution generated by the software. On average, there are 6 group trades on at a time. The portfolio is diversified across all eight commodity groups to gain exposure in uncorrelated markets. A max of four commodities in each group are traded at a time, and a one-lot is traded.
Figure 12 shows the distribution generated by the software. On average, there are 10 group trades on at a time. Many traders will review the Aberration trading system portfolio material presented here summarized in the table below and decide that when account size grows, it is better to trade more than a one-lot in the "Starter Portfolio" than move up to the next larger portfolio.
This is a mistake. This is true, but what he is neglecting is risk. Sooner or later this strategy will lead to a trading blow-out. The portfolio is diversified across the commodity groups to gain exposure in uncorrelated markets. The portfolio consists of: The following table shows the return and drawdown when risking two percent of equity on each trade and limiting group exposure to four trades, or less. This example illustrates the power of implementing the money management strategies available to the large-account investor.
He can achieve a very high rate of return for a relatively low max annual draw-down. If, for example, a max draw-down of 38 percent and an average max draw-down of about 24 percent is too high for him, he can lower the amount risked and have lower expected draw-downs.
Conversely, if he can stand more risk, he can up the amount risked and achieve a higher return. The trading logic is fully disclosed so you'll know exactly why each trade is being placed. This is not a "black-box" system which frustrates traders because they don't know how they work.
It uses daily bar data for trading decisions. You will know before the open of trading whether there is an order that day. You can place all orders before the market opens. Once the orders have been placed, you don't need to monitor the market the rest of the day.
You won't have to do complicated analysis to determine what to trade. We provide recommended portfolios for any account size, so you can start trading right away. Our systems have easy to understand money management rules. You will know exactly what to trade, and in what size each day. You will have Windows-based software to generate daily signals and to back-test performance.
You can gain confidence in the robustness of the system by doing your own back-testing with data we provide. For on-going trading signals, you can subscribe to a low-cost data vendor and get the trading signals in less than 5 minutes.
You don't have to use the software if you don't want. For those who use Trade Station for trading and back-testing, we have open source code for that platform. In my seminars, I stress that most traders fail due to an inability to execute their strategy as they planned.
Even with great systems, traders throw away their edge by letting their emotions over-rule their plan. I have a network of brokers who will execute the systems for you at a rate only slightly above the discount rate. In practice, I wouldn't guarantee future performance anyway.
There's no way to be sure a strategy will perform indefinitely into the future. Every number on this website comes from a computer using CSI end-of-day data.
If you purchase the system your numbers with CSI data will match mine, that's the guarantee. If they don't, I'll give you your money back.
In all that time no-one has ever claimed my numbers are "fudged" or inaccurate. We will answer trading questions and technically support the software. You can order by credit card through a secure server by clicking the following link.
Or, you can send a check to:. Aberration trading system on Grains - Oct Please note the following Commodity Futures Trading Commission disclaimer on hypothetical trades: Aberration trading system on Meats - Oct Aberration trading system on Softs - Oct Aberration trading system on Metals - Oct Aberration trading system on Energies - Oct Aberration trading system on Currencies - Oct Aberration trading system on US Financials - Oct Aberration trading system on Foreign Financials - Oct Aberration trading system on Stock Indices - Oct Aberration trading system Group Summary - OctMore...