Time for another new review, but first a little background…
In early June I was contacted by a gentleman from the US who is running a stock trading service. The service is called Beat The Markets and Trading Wizards is the company. Looking at the information provided (which to be honest is a little sparse) I decided to give the system a try.
I have been impressed with the results so far and felt that the offering deserved a wider audience.
The main things to know are:
1. Trades on US stocks
2. Needs a broker service (realistically an online service is probably best)
3. Can be quite a few trades on any one day so account needs to have a reasonable amount in. I’m using a $7,000 account and trade costs are $1 each so it is reasonable. With a lower bank and higher charges the potential earnings may be less worthwhile
4. Stocks are turned over quite quickly so that also increases transaction charges
5. Buying stocks is done at market closing and selling at market opening (broker service would need to allow this which I think most do)
6. Trades are posted daily and available from 8am UK (some days there are none) so in the UK we have plenty of time to set them up
7. There is a simple calculator on the site that advises you how many shares to buy (on inspection it seems that 10% of bank is used for each transaction)
8. Some trades also look to qualify for dividends
9. A 30 day free trial is offered
Given that I have been trading since June the results below represent all trades since then. I will continue to report results on a weekly basis until the standard three months is up and then revert to monthly updates. All figures include transactions costs. No inclusion for dividend payments received. The results shown are tabulated as:
Date of trade (sale): Ticker symbol: Number of shares: Purchase price: Selling Price: Profit/Loss: Bank: % movement
June 2013
Fri 07-Jun: DHI: 29 shares: $665.68: $680.79: $15.11: $7015.11: 0.22%
Mon 10-Jun: PWR: 25 shares: $673.75: $688.5: $14.75: $7029.86: 0.43%
Tue 11-Jun: TER: 39 shares: $697.54: $687.35: $-10.19: $7019.67: 0.28%
Thu 13-Jun: CL: 11 shares: $648.02: $637.66: $-10.36: $7009.31: 0.13%
Thu 13-Jun: HPQ: 28 shares: $695.68: $691.44: $-4.24: $7005.07: 0.07%
Fri 14-Jun: DIS: 11 shares: $714.35: $703.11: $-11.24: $6993.83: -0.09%
Mon 17-Jun: BEN: 1 shares: $148.1: $147.34: $-.76: $6993.07: -0.1%
Mon 17-Jun: HCN: 3 shares: $201.88: $201.95: $.07: $6993.14: -0.1%
Mon 17-Jun: JEC: 4 shares: $223.12: $224.72: $1.6: $6994.74: -0.08%
Tue 18-Jun: EA: 10 shares: $216: $223.2: $7.2: $7001.94: 0.03%
Tue 18-Jun: HAS: 15 shares: $676: $664.7: $-11.3: $6990.64: -0.13%
Tue 18-Jun: KMX 5 shares: $235.95: $234.9: $-1.05: $6989.59: -0.15%
Wed 19-Jun: MCO: 3 shares: $189.58: $186.56: $-3.02: $6986.57: -0.19%
Wed 19-Jun: SLM: 30 shares: $691.3: $691.7: $.4: $6986.97: -0.19%
Wed 26-Jun: AES: 60 shares: $689.8: $704: $14.2: $7001.17: 0.02%
Wed 26-Jun: AKAM: 5 shares: $214.2: $209.9: $-4.3: $6996.87: -0.04%
Wed 26-Jun: TRIP: 11 shares: $668.7: $684.85: $16.15: $7013.02: 0.19%
Thu 27-Jun: DLPH: 14 shares: $675.38: $715.24: $39.86: $7052.88: 0.76%
Thu 27-Jun: HAR: 14 shares: $677.06: $733.78: $56.72: $7109.6: 01.57%
Thu 27-Jun: NTAP: 18 shares: $674.02: $683: $8.98: $7118.58: 01.69%
Thu 27-Jun: SAI: 52 shares: $680.64: $706.2: $25.56: $7144.14: 02.06%
Thu 27-Jun: WDC: 11 shares: $645.16: $679.79: $34.63: $7178.77: 02.55%
Fri 28-Jun: KMX 15 shares: $660.85: $693.6: $32.75: $7211.52: 03.02%
Fri 28-Jun: LUK: 26 shares: $661.66: $668.24: $6.58: $7218.1: 03.12%
July 2013
Tue 09-Jul: TSO: 14 shares: $718.92: $736.38: $17.46: $7235.56: 03.37%
Tue 09-Jul: WAG: 15 shares: $676.15: $682.4: $6.25: $7241.81: 03.45%
Tue 16-Jul: MU: 54 shares: $692.2: $709.1: $16.9: $7258.71: 03.7%
Tue 16-Jul: ZION: 23 shares: $679.27: $696.82: $17.55: $7276.26: 03.95%
Mon 22-Jul: UNH: 10 shares: $706.5: $714.3: $7.8: $7284.06: 04.06%
Wed 24-Jul: NTRS: 12 shares: $710.68: $720.8: $10.12: $7294.18: 04.2%
Wed 31-Jul: BRCM: 22 shares: $595.22: $613.68: $18.46: $7312.64: 04.47%
Wed 31-Jul: CSCO: 28 shares: $710.24: $721.4: $11.16: $7323.8: 04.63%
Wed 31-Jul: LOW 16 shares: $696.04: $703.16: $7.12: $7330.92: 04.73%
August 2013
Thu 01-Aug: CMCSA: 16 shares: $695.4: $731: $35.6: $7366.52: 05.24%
Thu 01-Aug: WFC: 16 shares: $693: $706.04: $13.04: $7379.56: 05.42%
Thu 01-Aug: WLP: 8 shares: $685.32: $687.72: $2.4: $7381.96: 05.46%
Fri 02-Aug: JEC: 12 shares: $711.4: $734.96: $23.56: $7405.52: 05.79%
Fri 02-Aug: MS: 26 shares: $708.46: $724.4: $15.94: $7421.46: 06.02%
Fri 02-Aug: NFLX: 3 shares: $741.22: $747.02: $5.8: $7427.26: 06.1%
Fri 02-Aug: RAI: 14 shares: $705.9: $701.24: $-4.66: $7422.6: 06.04%
Fri 02-Aug: STX: 17 shares: $698.85: $707.22: $8.37: $7430.97: 06.16%
Mon 05-Aug: DISCA: 9 shares: $738.28: $740.96: $2.68: $7433.65: 06.19%
Wed 07-Aug: PLD: 18 shares: $705.16: $687.32: $-17.84: $7415.81: 05.94%
Wed 07-Aug: XYL: 28 shares: $699.04: $709.08: $10.04: $7425.85: 06.08%
Thu 08-Aug: AVP: 33 shares: $733.6: $737.21: $3.61: $7429.46: 06.14%
Fri 09-Aug: JCP: 54 shares: $692.2: $715.58: $23.38: $7452.84: 06.47%
Fri 09-Aug: VAR: 10 shares: $728.5: $734.3: $5.8: $7458.64: 06.55%
Mon 12-Aug: SWY: 29 shares: $725.71: $718.2: $-7.51: $7451.13: 06.44%
Tue 13-Aug: ADI: 15 shares: $736: $740: $4.: $7455.13: 06.5%
Wed 14-Aug: BAC: 50 shares: $731.5: $726.5: $-5.: $7450.13: 06.43%
You can try Beat The Market for free here:
https://www.cash-master.com/TradingWizards.php
Risking 10% of the account per transaction (per trade)? If so, that’s HUGE risk!
Peter, You make a good point. My experience to date shows that trades are kept open for a very short time and the markets are being monitored closely. Having said that one can’t totally discount a market correction that has a big impact. All I can put forward as mitigation is the statement on the site that they have averaged 39% profit per year which far outstrips the S&P 500 performance itself. I will raise your point with the system owner to see why he uses the amount he does and what evidence he has that it is a manageable risk.
Peter,
I’ve had a response from the system developer and rather than try to paraphrase I’ll quote part of his response directly:
“The 10% refers to the maximum investment in any one stock. If
that stock goes down 20% during a trade (EXTREMLY UNLIKELY)
then that’s a 2% drawdown.
The risk is mitigated as the system only trades S&P 500 stocks so
extreme downward moves are far less likely than say with penny
stocks.
Finally, the reason the system has had such consistent results is
that it trades quite frequently. Therefore, there is a trade-off
between position size (risk) and transaction costs. i.e. Larger
position sizes means less brokerage but higher risk and vice
versa. A maximum of 10% invested in any one stock has shown to
give the best results taking into account minimizing transaction
costs and the level of risk. Believe me, I’ve tested every different
position sizing algorithm out there (eg. fixed fractional, volatility
etc etc) before drawing this conclusion.”
I hope this explains the rationale. I’d like to quote your comment and the response in my next post if that is okay with you so that others who have a similar concern can be updated.