Request: Add YTD Returns for Trading Systems and Major Indexes
Author: TechTraderUSA
Creation Date: 10/16/2014 9:58 AM
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TechTraderUSA

#1
I would like to recommend adding Year-To-Date percentage returns for the systems shown on the "Find A Trading System" page in WealthSignals as well as show YTD returns for the major indexes (i.e., Dow, S&P 500, NASDAQ and Russell 2000) for purposes of using them as benchmarks against the trading systems.

Thank you.
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Eugene

#2
Sorry for the delay. Thank you for the request. Personally, I might not like the idea of overloading the Return block with another value (there are four). Maybe other team members have a different opinion.
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TechTraderUSA

#3
Eugene,

Thank you for your response. I think showing the YTD returns of the major market indices would be a useful metric against which to measure the YTD performance results of the various WealthSignals systems. It would take a little re-design of the WealthSignals' Returns block, but it is entirely doable.

Yes, I too would be interested in hearing the opinions of other WealthSignals members on this matter.

Thank you,
TechTraderUSA
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DartboardTrader

#4
Some systems aim for more than just high YTD returns. Consider displaying drawdown for the equivalent period(s). When an investing instrument has been nothing but up for months on end, investors tend to forget the gut wrenching ulcer factor of many strategies and "benchmark" indices. Drawdown may not capture the volatility of a strategy.

Also consider, a simple "strategy" which invests in 2 or 3x ETFs following an index could appear to have higher returns. Consider if this strategy is used in a 2x margin account, your volatility risk factor is closer 4 to 6x, which exposes one to an even higher risk of a margin call, if the market turns. Would this also be an important factor for displaying to a potential investor?

On the flip-side, YTD return may be an unfair comparison for strategies which have seasonal behaviors. All it takes is a weak first quarter, and no one will follow that strategy for the rest of the year, versus a strategy that seasonally has a weak year-end.

As it is, on WealthSignals, there are many "followers", but few subscribers. Will more metrics convince a follower to become a subscriber, or just create even more analysis paralysis?
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Eugene

#5
Michael,

QUOTE:
Some systems aim for more than just high YTD returns. Consider displaying drawdown for the equivalent period(s).

But we do that already, or did you mean somewhere else?