What are the top 10 trading systems? The correct question should be “what are the top 10 trading systems for a particular stock, ETF, or index?” The answer will depend on whether you are asking about the top 10 trading systems for Emerging Market Indexes or for the US Oil Services Index. It will be different for Large Cap S&P 500 indexes than for Small Cap Indexes.
Do you really believe there is one system that is the “Holy Grail” of trading systems that works on everything? Do you really believe that the top trading system for Gold is the same top trading system the S&P 500. How about China? Do you believe that the top trading system for trading China indexes will be the same top trading system for Consumer Durables?
There are many top trading systems for a particular asset class or index. The key is to research the major characteristic of the asset you wish to trade.
The other question that should be asked is, “what indexes trade best?” There are assets and Indexes that seem to underperform regardless of the system used. Seleznov Capital Research uses two different approaches in ranking trading system performance. One is by points which are helpful when comparing different trading systems against each other for the same asset. The second is, by a $50,000 investment on a $100,000 account in the index or ETF. A systematic trader, who lets his ego go, is more interested in how well a $50,000 investment over the past 5 or 10 years would have performed in relation to a $50,000 investment in another asset class.
The nice part of being an independent trader and having the choice to design a flexible portfolio is that you can choose not to trade a particular asset or index. Why trade an asset or index that creates mayhem for your trading. Why commit as much capital to an asset that has little movement if you are really determined on only using trend following systems? If you like Trend Following, trade indexes that have good trend following characteristics. Don’t trade Consumer Staples with a Trend Following system.
The Top 10 Trading systems will differ from one market cycle to another. The top 10 trading systems in a Bear Market will be different than the top 10 trading systems in a Bull Market. Don’t use too short a time period to evaluate a trading system. The market in 2008 and 2009 performed great for many Trend Following Systems. But how did that same Trend Following System do in 2004-2007?
We post ranking for 5 years or longer in evaluating the top 10 trading systems for an asset or index. If you are looking for the top 10 trading systems, you want to use the right process.
If you are an institution, hedge fund or advisor looking for Custom Research, we have the research tools and staff to assist you.
For more on trading systems, visit www.seleznovcapitaladvisors.com
