Tags |
|
|
Links |
|
|
Top Articles - Futures System Trading - Reality Check
Let's analyze the results of some actual futures day trading system. In 2005 this system made 159.75 ES pts, 1 point being equal to $50. It accomplished this with exactly 497 trades, which amounts to about 41
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
trades per month on average. The profits I quoted are hypothetical. Hypothetical profits are for vendors (that's where the word 'hype' derives from). As traders we should be interested in actual profits. Let
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
s estimate them then. The system uses limit orders which can cause 'non-fill' slippage which happens when a trade really does not take place because its order is not filled, but the profit from such a phantom
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
rade is taken into account inflating the system hypothetical profits. Moreover, whenever you cannot exit with a limit order (at the session close), you experience regular slippage that happens to virtually all
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
market orders and to a lesser extent to stop orders depending on the market liquidity and the number of contracts one trades. This kind of slippage in ES usually does not exceed 1 tick per trade for market ord
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
rs and can be conservatively estimated at 0.5 tick on average for stop orders for the 1-5 lot orders.
In the past, in 2004-2005, you could have this system traded for you by a broker at Lions Futures. It is f
In the past, in 2004-2005, you could have this system traded for you by a broker at Lions Futures. It is f
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
om this broker that I got the data about the actual system performance. It turns out that during the period of 5 months, from July 2004 till November 2004, the actual profit the system generated was slightly o
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
er 43 pts lower than the hypothetical one, or to put it in other words the actual monthly profit was on average about 8.71 pts lower than the profit reported by the vendor. During those 5 months the system wou
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
d take about 45 trades per month on average.
Considering that in 2005 the system would call a bit fewer trades (41) per month than during the sample period (45) let us assume, probably rather optimistically,
Considering that in 2005 the system would call a bit fewer trades (41) per month than during the sample period (45) let us assume, probably rather optimistically,
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
he average correction to the hypothetical monthly profits to be 8.5 pts. Multiplying the last number by 12 and subtracting the result (102) from the hypothetical annual profit for 2005 we obtain 57.75 pts or $
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
887.5 before any commissions. With the commissions included (assuming the round turn of $5 per contract) we get $402.5 (=$2887.5-$2485) per contract.
Suppose that you traded 5 contracts in 2005. That would ha
Suppose that you traded 5 contracts in 2005. That would ha
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
e made you $2012.5. At the same time you would have paid your broker well over $12,000 and your system provider would have earned $3,000 if you were to pay him on a monthly basis (quarterly payments would have
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
not made a big difference).
And here we come to the punch line which is this: after toiling like a stupid monkey for a whole year you would not have made enough to even cover the system subscription fees, muc
And here we come to the punch line which is this: after toiling like a stupid monkey for a whole year you would not have made enough to even cover the system subscription fees, muc
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
less your other bills!
Now, you might think that I chose a particularly lousy system to have fun knocking it. Well, actually, the really sad thing here is not my penchant for knocking others (which I might p
Now, you might think that I chose a particularly lousy system to have fun knocking it. Well, actually, the really sad thing here is not my penchant for knocking others (which I might p
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ssess too but probably not to a greater extent than any other guy), but the fact that it is not necessarily such a bad system (relatively speaking), meaning that many others are even worse. If I really wanted
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
o have a field day, I would have found a morte suitable system for that. Obviously, that would have been rather malicious of me.
Let me say it again, this time quite seriously: while I do think that this syst
Let me say it again, this time quite seriously: while I do think that this syst
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
m performance in 2005 was far from stellar, I also think that I can correctly describe it as average and so rather representative of what you can expect from many systems like that. What is not reasonable and
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
ustifiable though is the subscription fee which is absolutely not commensurate with the system actual performance.
The moral of this story is quite simple: when it comes to systems, mechanical or otherwise, i
The moral of this story is quite simple: when it comes to systems, mechanical or otherwise, i
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
's not all gold that glitters. After a careful analysis, such as the one I just performed, many systems with great looking equity curves may actually turn out to be losing money! This comment applies particula
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
ly to systems that trade rather frequently. I am not a big believer in mechanical systems that trade more often than 20 times a month, especially when they use limit orders to initiate or close their positions
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.toparticles.org.ua/article/102000/toparticles-Futures-System-Trading--Reality-Check.html">Futures System Trading - Reality Check</a>
BB link (for phorums):
[url=http://www.toparticles.org.ua/article/102000/toparticles-Futures-System-Trading--Reality-Check.html]Futures System Trading - Reality Check[/url]
Related Articles:
Why It's Best to Start a Business Before Your 25th Birthday
Google AdWords Clobbers Affiliate Sellers
Real Estate Search Engine Optimization - The Research Factor
Bookmark it:
|