Today we are going to do something different: often we receive enquiries from prospects that would like to know about the type of returns that can be obtained using the Retracement Levels models. We know from incubator accounts traded with real money and also from backtesting of our models that certain type of results are possible and are certainly above simple BUY & HOLD returns, however for a number of reasons it is not possible to provide this information to our clients because:
a) trading is so personal and each trader inevitably blends his own bias into our systematic strategy/model, so in the end not all traders will follow our system to the letter
b) most traders will fail even if you give them all the tools and support to be successful, because trading is very difficult, it requires capital, stomach, self-control, far-reaching intelligent/strategic thinking and unfortunately it’s hard to find all these qualities in one single individual (that is also why we want to use computers to trade or to support our investment decisions).
Still, it is remarkable for us to see that some of our retail clients, traders that originally were unsuccessful when trading on their own using charts, EW, fundamental or Technical Analysis or other “mixed methods”, finally managed to become successful by systematically using our system (or a modified version of it as each client ends up putting some discretionary personal touches to it, this is inevitable because of point a) above…).
Today we want to show you what one of our clients, a retail trader and former-Slope-of-Hoper did with a small account (started at around 10,000 USD in 2011) trading through the years (still trading). One thing we want to stress is that this does not represent necessarily the results YOU can obtain with our system, but still it is interesting to witness that this trader, while aggressive in nature, has managed to be quite consistent in producing superior returns through the years (with one big loss in 2015 although he still managed to close the year up +64% from a +300% up peak – this big swing has to do with the management of Stop Losses, which we warmly recommend to use but he prefers not to use and make manual exits ad hoc – his choice).
Here below is the graph of his track record (click on graph to enlarge), he started in November 2011 with about 10k USD and initially he traded a maximum 1 or 2 contracts with our RL models ES HOURLY (now he trades more contracts as he has more money on the line):
What he did is worth looking at, in our view, because it can be compared with the track records of other retail traders that started with similar small accounts and for sure he has achieved some interesting results even though inevitably it has been a rollercoaster, which we find to be very common in clients trading small accounts because obviously they try to take more risk to achieve better results – the advantage of RL Models is that they tell you where is the risk, so you can place your big bets at the right places and have a good chance to be rewarded.
In 2013, after one year, he had already grown to 50k USD in the account, all done trading exclusively with RL.
2014 started well but unfortunately ended as a loss and the account pulled back to ~30k USD.
2015 was going very well, up to 90k USD at one point, which is 9x times the original account 3 years before, but then the lack of stops and some market volatility caused a big drawdown in his account, still finishing the year in the 50k USD area, and higher than the year before (+64%).
2016 is currently up >30% and currently reaching into the 70k USD area.
Straight from the mouth of this trader, this is what he usually does:
- I set limit orders at each hourly RL level, both LONG and SHORT, before the trading day begins, to make sure that whatever swing happens in the market I will capture it, LONG or SHORT, so then I can make money on the subsequent reversal
- I don’t set any stop losses, so I am using the RL averaging down system but only with 1 contract traded at each level (no doubling downs). The single exception is trading 2 contracts at the 100% level, to increase my profits at high-probability reversal levels.
- When the market reverses and goes my way, I use the opposite model to enter single contract limits, set at the RL levels, for example I use the LONG model to exit SHORT trades as LONG support = end of SHORT trade
- I do adjust the RL levels occasionally to try and maximize my gains, by moving the limits to match my Bollinger band extremes (at 2.5 deviations) on the 15 or 5 mins interval charts.
- Sometimes if the market moves too rapidly, I may be wrong footed and caught with a few too many contracts in the negative. That’s when I have to start closing out some contracts at less than optimum positions and take my losses. Unfortunately sometimes losses are inevitable.
Here below is a sample of the Retracement Levels (RL) E-mini S&P500 (ES) SHORT model setup that this trader is using in these days to take advantage of quick intraday swings in rapidly moving markets:
Currently we have a couple of special offers available on our website, if you want to subscribe to the E-mini HOURLY models for ES and NQ tickers, you will find it here .
There is also product subscription that offers full access to ALL the RL models, Hourly but also Daily, Weekly and Monthly (we cover a number of selected ETFs, FX Spot, Indices and Futures markets, here is the full list), and this subscription is offered only on a Yearly subscription basis, and includes the RL Trading Course that will train you from A to Z to use our models. If you enter this coupon at the signup page you will get a -300 USD discount: 91C485DAF1
This is a limited offer for a limited number of subscribers from Slope of Hope.