Although the Power Momentum System has been thoroughly backtested for several years and traded live through most of 2015 it has only recently been made available to the public via the Power E-Mini Desktop Alert Software on January 4th, 2016.
You can see the Beta Group – Trade Results of the first two weeks below.
The Trade Stats are based on 2 contract positions entered on 1 tick trigger moves past a Price Signal Barrier and a 1 point Delta Target on half the position. Trades use a 2 point Initial Stop and reflect Target and Trailing Stop Move Alerts as issued by the Momentum System. Results are based on a 100% Mechanical following of the System Alerts (entry, initial stop, targets, tailing stop moves). All system alerts were confirmed by live trade fills on entries and exits.
How To Interpret The Results:
I have come up with 3 easy ways to determine your E-mini Profit Performance and Trading Prowess, as well as measure the robustness of any Trading System or Strategy.
1. Win/Draw/Loss Ratio. Most traders mistakenly get hung up on looking for high percentage Win Rates of 80-90% thinking that this is the key to trading success. A high win rate does not guarantee that you will make money, as 80-90% of your trades could be TINY winners and the remaining 20% HUGE losers, the low percentage of losers wiping out all the gains from the winners for example.
Here is a better way to look at it. What we really want to analyze is the percentage ratio of Winners, Losers AND Draws. (Break-Even Trades) Its not just about Winners Vs. Losers, the Draws are an essential part of the equation as well. (Just like the two green zero slots on a Roulette wheel. When statistically analyzing any Roulette Gaming Scenarios you must include the Green slots in the analysis as well as the Black and Red.)
What a trader really wants to achieve is this.
> 50% or Greater, Winning Trades
> The Draw Trade Percentage To Be Greater Than Losing Trade Percentage
(This in and of itself does not guarantee a gain for the same reasons described earlier, But It Puts You On The Right Track)
You can see in Section #1 above, that the system over the series of 40 trades scored:
> Wins 55%, Draws 25%, Losers 20%
…which is EXACTLY the kind of ratio we want to shoot for.
In the end, the correct question is not What percentage of the time do you win?
but… What percentage of the time do you NOT lose?
2. Daily Average Net Points. I discovered a great little correlation between the Average Net Points we want to shoot for each day, and the number of contracts traded in each position. It turns out that the minimum goal for each day for Net Points Gain should be Equal to or Greater than the number of contracts used in your trades. So if you are trading with 2 contract position sizes for example, you want to achieve an Average Net Point Gain of 2 points or greater. (Note: This is the per day average computed at the end of the week. One day you may finish with a Net of 1 point, the next +8, followed by a -3 negative day, but it averages to 2+ net points per day when penciled out. Net Points are computed after losses and commissions are subtracted)
So starting off as a 2 contract trader you would want to see an Average of 2 net points (or greater) per day. A trader at the 4 contract level would want to see a average of 4+ net points per day and so on. The nice thing about this formula is that you can fairly reasonably, project out weekly/monthly cumulative returns based on the position size you are planning to use.
The Trader Should Focus On:
Maintaining A Daily Average Of Net Points Equal To Or Greater Than
The Number Of Contracts Used Per Trade
You can see in Section #2 above, that the system over the series of 40 trades captured:
An Average Gain Of 3.83 Net Points Per Day On 2 Contract Position Sizes
…which is almost 2 times greater than the benchmark Target we want to aim for.
3. APC Score or Average Net Profit per Contract Traded A final way to measure your trading performance is to monitor the Average Net Profit Per Contract Traded. Net Profits are always computed after commissions and losses. An Ideal Benchmark APC Score is $20 or greater. This means that every time you put a contract to work you are earning a minimum of $20. This allows you to pre-compute with a reasonable degree of certainty how much money you would make based on the number of contracts traded per week. If you average 4 trades per day and you are trading at a 2 contract level the math is:
4 (trades) * 2 (contracts) * 5 (days) * $20 (APC) = $800
A Good Trading Strategy Will Generate:
A Minimum Net Gain Of $20 Or Greater Per Contract Traded
You can see in Section #3 (above in first graphic), that the system over the series of 40 trades Achieved:
An APC Score of $24.27
…which is 21% higher than our benchmark goal of $20 per contract.
Considering that the system was launched to the public during some of the most intense – intraday market volatility seen in years, the first couple week’s results are impressive. Out of a sample of 10 trading sessions (trading only the first 3 hours) there was only one negative point return day and that final Friday in the top graph above occurred on an Options Expiration Day coupled with a 300 point gap down in the DOW, which set the stage for a morning of fierce almost un-tradable choppiness early on in the session. (Note: We normally to not trade Option Expiration Fridays for this very reason)
Current Stats Updated Weekly