Strateg No. 4 is up in the subscribers section. Here is the link...

http://www.ldholmes.com/password/strategy4.htm

I may be a little delirious from a lack of sleep but I like it enough that I may quit looking for a way to improve it (fat chance). Let me know if you think it will or will not help you.

Larry

wow! i love it! this is what i was hopeing for -

a great entry system, bump up the performance with leverage without taking on TOO MUCH risk and WITHOUT hurting performance! i can certainly live with the drawdowns in strategy 4! a win rate of 70%+ is very reasonable and there are FEW back to back losses.

sure, there are emotional roller coaster price swings but that's just the trading biz!

my only question is... why did you decide to start on 5/19/86 when you started the other strategies on 3/17/86? was this an oversight or on purpose?

wondering...

thanx for the great info... i'm going to do some calculations of my on and bump up the leverage even more... will it hurt or hinder overall performance?

stay tuned!

-ja

Hi Larry - I've been looking over strategy #4 and I find it quite interesting. It also appears to be more 'fun' and 'sophisticated' then the current strategy I am following (Strategy #1 - 2 to 1 leveraged). My first gut feeling was to switch from my current strategy to the new #4. The differences between the two include:

- More transactions in #4
- Less downturn in #4
- #1 easier to follow
- #1 slightly better return (2 to 1 leveraged)

They are pretty similar. I think the biggest advantage #4 has is lower down turns. But if you can financially and emotionally handle the down turns, #1 (2 to 1) is easier and more profitable.

So for the meantime I'm going to stick with #1 (2 to 1) and see how well I can handle the ups and down. I am going to keep #4 as a backup in case the down turns get to me too much.

Nice research Larry! Keep up the great work.

Dave

Joe,

It was an oversight. But I had already run the figures before I caught it. The 3/17/86 trade was an 0.6% profit so overall results would be barely affected. However, to keep it consistent I’ll change it when I get a chance. I’m going to go over it again when I’m rested. I’m sure I might pick up a couple of more minor errors.

Even though this strategy is one that I developed several weeks ago, it wasn’t until I put it down on paper and ran exact numbers that I realized how good it is. I mean to be able to increase the annual returns by 75% and yet not significantly increase the volatility is just fantastic. In fact, I almost called it the “Holy Grail” strategy but then I thought, nope, there isn’t any such thing.

But I’ll tell you how much I like it. I’m thinking about changing my typical allocation, which has been about 65% COT, 10% precious metals, and about 25% for trading. But the only reason I do the trading is because I’ve been able to do so and enhance the COT returns. However, even though I’m a pretty good trader, I can’t beat what Strategy 4 has done. So I’m thinking about going to about 80% for Strategy 4, 10% precious metals, and then leaving about 10% for special situations (options, 50% Principle, etc.). I don’t know. After I’ve had some rest, I’m going to look at again in the morning and if I still like it as much, I may just do that.

Larry

I knew it would be a little too tame for you, Dave. Are you sure you don't have Texas roots?

Larry

Unfortunately, I think my desire to get a little thrill in the options market with half of my funds may kill me in the long run. I too, as you mention above, should consider uping my portfolio percentage towards the smart money. It would be less money in my hands to 'play with'.

Hopefully I can get some of the 'thrill' out of my system next weekend when I'm at the Traders Expo in Las Vegas.

Dave

dave g

maybe you should trade strategy #4 for money and become a stunt man for thrills! it's safer!

-ja

...I want the extra 6% that option #1 (2/1) gives.

Dave

i don't mean to get greedy but... on strategy #4 i noticed a quirk.

there are 83 trades. 22 losses. under the "comment" column you tell us whether we're 100% or 200% committed. out of 22 losses, 18 occur when we are 100% committed. (i.e. the price is below the 40 week MA for longs - and visa-versa for short).

rule #1 for this strategy is what gets us in 100%. but what happens if we 86ed rule #1? just committed 200% (or 500%) when the price is above (for long) or below (for short) the 40 week MA after the COT signals a new position?

i know we'd trade less and there are some GAINS we'd miss out on - BIG gains! but even so, is it worth it? does it help performance?

larry, I tried to figure this out myself using the spreadsheet I sent you – cutting out the 100% committed trades and plugging in the new exits. but I got confused on the OUT and BACK IN trades.

sorry to be a pain but – if this looks worth investigating I just wanted to call it to your attention.

whatever,

-ja

Joe,

I think you may be looking at it in reverse. When a comment says "200%" that means that trade is switching to a 2 to 1 leveraged position. So to see the results of that trade you want to look at the next row. Those trades are going to have more losses because they will include all the false signals from when the price traded above or below the moving average and then reversed.

I'm going to have to think of a better way to explain it on the table because if you are confused by it then others are as well.

Larry

Larry,

Thank you for posting Strategy No. 4, so far it's the best I've ever seen. The only question I have is do you use simple entry (Strategy No. 1) or Wait a week + BL/SH (Strategy No 3) for your entry ? Your rules and comment seems mentioned both.

Zack

Zack,

The COT signals for Strategy 4 are the same as Strategy 3. Although I think you could use 1, 2, or 3 and get similar results.

Larry