Magazine article Modern Trader

Tracking Trading Systems

Magazine article Modern Trader

Tracking Trading Systems

Article excerpt

In the early years of my trading career, I purchased a number of trading systems that turned out to not live up to their billing.

A prominent vendor copied two pages out of a book that I published, where I discussed a trading tool, not a system. He sold it as a system and claimed it was the best thing he ever developed. At this stage (prior to organizing Futures Truth), I had hired a computer programmer, John Fisher, who had worked for the Department of Defense on the design of the Tomahawk cruise missile guidance system.

In 1988, with my experience as a professional trader and John Fisher's programming abilities, we developed historical backtesting software. After that, I organized Futures Truth to bring truth and honesty to the trading world.

George Pruitt, a computer science graduate, came on board in 1989 and helped finalize the software, which became known as Excalibur. Initially, we were using it just to reveal fraudulent systems. However, people with good methodologies wanted their systems to be monitored and ranked. We always have had an arm's-length relationship with our system vendors and have never charged a tracking fee. Quite a few fraudulent vendors were put out of business because the numbers that were reported simply did not measure up to the hype.

Today, we track more than 200 publicly offered trading systems and report walk-forward results in our quarterly publication.

Some early vendors who were in Futures Truth included:

* Doug Bry, TTS-VBS System

* Bruce Babcock, many systems

* Welles Wilder, systems from his "New Concepts in Technical Trading Systems"

* Essex Trading Co. …

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