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The story was that the system developer created this system and even
submitted it to Futures Truth for verification. He had Robbins mechanically
trading the system. Supposedly Robbins noticed how well it was doing and
asked him to open the system to outside accounts. Robbins trades the
system, they get trading commissions and a management fee. The system
developer gets a monthly fee. I had no trouble with the fees if the system
had made the money it had made in the literature. Robbins showed a two and
a half year real time track record. I thought I had done my homework. I
have no reason to believe that all this was not true but the system sure
took a dive the second I got it. It was almost funny, a joke, and yes, the
money was "family" money ($50,000). I got an email statement of account
each evening. Every time I saw the words "S&P" I knew I was in for another
loss. It had about 75% losing trades during the time I was in.
I assume all material I received regarding the system was truthful. There
are lessons here. Don't do something like this with anything but
speculative money (which this was). All systems can crack or at least
exceed their historical drawdown no matter how carefully tested. Maybe the
real lesson is that you have to sit through the drawdowns. Who knows, the
system may have made a million since I bailed out.
The remaining money is being managed in another "high return" system not
trading futures but Rydex funds. They jury is still out with them.
See....we never learn.
Dave
-----Original Message-----
From: Trader J <editorial@xxxxxxxxxxxxx>
To: Neal T. Weintraub <thevindicator@xxxxxxxxxxx>; David Olson
<trader7@xxxxxxxxxxxxx>
Cc: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Friday, July 31, 1998 8:02 AM
Subject: Re: Weintraub on Backtesting Questions
>How could it happen? Let me count the ways:
>
>- Poor system back testing methodology and/or
>- Not a purely mechanical system (any trader discretion here?) and/or
>- Not all trades taken (inadequate
>capitalization/diversification/discipline) and/or
>- Inadequate time of use of system (3 months in this case, very common
>problem) and/or
>- Poor match between system risk and trader personality and/or
>- Poorly designed system (how many parameters? who set them?) and/or...
>
>
>I'm a singin' the "System Trader Blues....."
>
>
>Trader J
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