As promised yesterday, here’s the current performance record for the Lazy Man trading system originally posted on Dec 31st, 2009. The green line reflects the Lazy Man equity curve as opposed to the corresponding chart of SPY shown in orange.
The total lookback period for the system here is 80 weeks although the SPY chart goes back 104 weeks due to the way the Lazy Man algorithm is calculated. This really is a lazy system that buys the momentum leader of the 5 ETF basket (noted yesterday) at Friday’s close and then simply waits until the subsequent Friday close to determine a course of action that either continues to hold the ETF or closes the position and opens a new Long position in the new momentum leader. Since this is a lazy system, there are no stops and all positions are Long.
As suggested by yesterday’s chart, QLD has been the hands down momentum leader for most of the year and has accounted for the bulk of equity accumulation. This is easy to see in hindsight but when the year began odds favoring the Qs were not that rosy. Given the lazy rules for the system it’s actually amazing that the maximum drawdown for the system has been only 12%, a respectable risk control parameter for systems with fully integrated trailing and fixed loss stops. Truly lazy traders only have to look at the freestockcharts template each Friday before the close and place or adjust the trade accordingly.
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