Absolute returns with equity long/short strategies

Verified results for recent 12 months:

Nasdaq-100 2x @ OPEN

    +78%

Nasdaq-100 2x @ CLOSE

      +27%

Nasdaq-100 2x @ COMBI

    +52%

Objective

The objective of all our short term trading models is to achieve unsurpassed all weather performance over the long term by utlising equity long/short positions with index ETFs or mutual funds.  The models are also applicable for Long Only investors who may enter MoneyMarket in periods where a model signals Short.

We apply two approaches, aggressive and steady, which are based upon the same foundations but are designed to provide solutions with different potential and volatility profiles.

For all the models positions will change on average two times per week and the ambition is to take advantage of short term market turns as well as periods with unbroken direction up or down.  

No follow-up required during the day

Subscribers receive unambiguous trade signals well ahead of market opening. After the order is placed with your broker, there is never a need for follow-up or intervention during market hours. The systems are therefore well-suited for individuals who are occupied with work or other activity which does not allow regular interaction with stock market developments throughout the day. 

The performance of our models suffered for more than a year from the middle of 2006. Following an intensive period of 'systems engineering' some core deficiencies were identified and eliminated in October 2007. This work also resulted in better calculated results for the preceding years. We now believe the models are back on track and well positioned for challenging markets ahead of us.

Aggressive approach (OPEN, CLOSE, COMBI)

The "OPEN" model is designed for index-based investing with trades executed at the market open or early in the session.  We use it actively for QQQQ and for Rydex 2x geared funds traded at Rydex' 10:45 AM pricing.

The "CLOSE" model issues signals for trades at closing prices.  It is in particular meant as an alternative for those who use investment objects which only are priced at market close (i.e. most mutual funds, including Profunds and Direxion). 

Read more about the aggressive systems here >>

Trading with ETFs

Trading with mutual funds

The strategies do actively take advantage of features offered by novel fund providers such as Rydex, who in their prospectus state: 

"The [Rydex] Dynamic Funds may be appropriate for investors who use a portfolio investment strategy that relies on frequent buying, selling, or exchanging among stock mutual funds, since the Funds do not limit how often an investor may exchange among Funds."

Which approach to choose and use?

The models represent separate paths, i.e. they show different footprints and behave differently over different time periods, and it is not possible to predict or prejudge which of the models or strategies will turn out the best return for a given period. 

The OPEN and CLOSE models are always invested, either in long or short positions.  A natural consequnce of this aggressive approach will be situations where drawdowns can appear as excessive (maximum 11% total equity peak to valley for OPEN or CLOSE with unleveraged QQQQ,  5% for COMBI).

However with 4 years of history (i.e. one year back test using complete set of input data, and subsequent 3 years with documented live trades) the models have shown their inherent capacity to recover such temporary set-backs.

Steady performance with less drawdown?

Over time all models will hopefully show results up to their respective capabilities, however one way to lessen the extent of temporary fluctuations is to employ a combination of models; 

The COMBI strategy represents potential for continuous growth with more stability than individual use of OPEN or CLOSE (COMBI requires access to both OPEN and CLOSE signals),

A graphic presentation of how the various alternatives compare can be viewed here >>>