An Enduring Trading Edge

Transparency in track record

Adam has published institutional advisory and trade calls every day since late 2009. That is a decade-long, unbroken record of real-time market analysis and real-time market calls.

You can see the cumulative P&Ls for those published trades:

Year#Total P&L as X RiskTotal P&L at 2%/risk tradeWin%
5-Year Lookback – How We Outperformed

A 5-year lookback with a risk-adjusted measure such as a Sharpe ratio is a well-established institutional benchmark. Here is a quick comparison of the 5-year performance of our calls vs. the S&P 500 and the hedge fund industry.

On a compounded growth rate basis, our calls have outperformed the S&P by more than 4x and the hedge fund industry by more than 13x.

Our CallsS&P 500Barclay Hedge Fund Index
Total Return551%159%116%

Further, the calls made for institutional clients are intentionally conservative, seeking to minimize equity curve volatility and drawdowns at the expense of more aggressive returns. These trades would typically be taken with very large funds by institutions—either as part of an outright system using our guidance, or as part of a spread or hedge counter-balancing existing large positions.

If we put this into an equity curve format, assuming 2% of the account value risked per trade, the comparison of our calls’ performance to the S&P and the hedge fund industry looks like this:

Based on regulatory guidance, we must still label these as theoretical results, meaning that this is not the equity curve from any trading account, and the disclaimers about theoretical performance do apply.

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Not a backtest

It is important to note that these are not backtest results. Backtests can be tweaked and tortured until they show great theoretical results. (And they almost always are, for presentation purposes.) We do not put any weight on backtest results, and neither should you.

The results presented here come from trades that were called in real time, at the hard right edge of the chart.

More on where these results come from

These are the results from the precise confirmed entries and exits of trades that Adam has published, in real time, for institutional clients since 2009. No “coulda, woulda, shoulda”, no looking back, no editing history. In fact, in the very rare instance when we made a mistake in preparing a publication for a specific day, the results include the outcome of that mistake! This is what we saw the day before, and what we published in real-time, once again, on the hard right edge of the chart.

The following points are important:

  • These are not theoretical results of a would-be system or back-tested trades.
  • All precise entry and exit points were published, in all cases, the night before.
  • These are trades in liquid securities that can be—and are intended to be—taken with institutional size. And these very trades—most or all of them—may have been taken exactly as published by numerous pro shops and institutional clients. Every single trade in this record could have been taken in real time.
  • There has not been a single losing year since 2009 which is highly unusual for active management.
  • Due to the nature of the clientele and the business case requiring the ability to deploy large funds with low volatility in the equity curve, the set of strategies used to create these results is intentionally conservative.

Regulatory requirement

Although all these trades were called in real-time with specific entries and exits, these must still be labeled as hypothetical trades as per regulations, and the following disclaimers apply:

Past performance is no indication of future results.

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. for example, the ability to withstand losses or adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

Setting an example in transparency

Taken together, these results are strong evidence of an enduring trading edge.

We believe that you as a consumer have a right to know that those who sell you financial education can read and call the markets better than you can—and better than the talking heads on financial and social media. We are publishing these results here on our retail venture’s site because we would like to do our part in bringing some much-needed transparency to the financial education and retail trading industries.