Mid Year Analysis

The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading.

First the bad news. The 74% Solution trading system continues to under perform for 2016. As of todays date my actual real money trades shows a loss of $117.11 for the year. I have made 12 trades this year, 3 losers at 25% and 9 wins at 75%. So at least I am beating my historical win loss ratio of 74% winning trades.

Today I went over my paper trading records for the year. It does not look much better. Of the eight ETFs that I trade, four are showing a loss for the year and four are showing a small profit for the year. The paper trading record breaks down as follows:
QQQ  -15.23
SPY + 2.27
IWM  +2.59
MDY +1.48
IGV  -0.31
IEV  -0.91
TLT  +1.95
XLK  -2.59

Also on the plus side my trading record since 2014 when I started this Blog is still showing a profit. From my Trading Record page, here are the results since 2014 to date:
2014 – 2016 Trade Summary to Date

49 Total Trades.
Net Income To Date $327.60 / 49 Trades Equals $6.69 Per Trade.
38 Winning Trades = 77.6%.
11 Losing Trades = 22.4%.
Largest Winning Trade $243.45.
Largest Losing Trade $-659.90.
Total Number of Days in Trades; 206 Days.

No trading system is perfect. Despite what their promoters claim, every system will have off years. Even Warren Buffet, but for him an off year is 10% return instead of 25%.

I am not the only one struggling this year; check out this article. Hedge fund managers are waiting for the world to change, read here.

I vowed to myself, when I started this Blog that I would not BS my readers and that I would honestly present the facts of this trading system, good or bad.

Having said that it is important to understand that the 74% Solution trading system has been profitable going back to as far as I have researched and paper traded the ETFs that I follow. Here is a partial reprint of my Blog of January 17, 2016 The Good, The Bad, and The Ugly!

“To keep things in perspective it is good to look at the historical record of all the ETFs that I track, including all the trades that I did not make. The following information is derived from back testing – paper trading, and do not represent actual trades made. No allowance is made for broker commissions.

SPY: Back tested to January 26, 1998. 253 trades, average of 1.14 profit per share per trade. 223 winning trades, 88.14%; 30 losing trades, 11.86%.

QQQ: Back tested to January 2,1997. 260 trades, average of 0.80 profit per share per trade. 218 winning trades, 83.85%. 42 losing trades, 16.15%.

IWM: Back tested to July 31, 2000. 220 trades, average of 0.49 profit per share per trade. 181 winning trades, 82.27%. 39 losing trades, 17.73%.

MDY: Back tested to 31 March 2000. 115 trades, average of 0.99 profit per share per trade. 98 winning trades, 85.22%. 17 losing trades, 14.78%.

IGV: Back tested to 25 July 2001. 98 trades, average of 0.54 profit per share per trade. 84 winning trades, 85.71%. 14 losing trades, 14.29%.

IEV: Back tested to 11 October 2000. 52 trades, average of 0.55 profit per share per trade. 44 winning trades, 84.62%. 8 losing trades, 15.38%.

XLK: Back tested to 15 January 1999. 211 trades, average of 0.51 profit per share per trade. 177 winning trades, 83.89%. 34 losing trades, 16.11%.

TLT: Back tested to 16 October 2002. 87 trades, average of 0.68 profit per share per trade. 76 winning trades, 87.36%. 11 losing trades, 12.64%.

All the above ETFs that I track have all shown substantial losses and they all recovered their losses and showed a profit. This is why I still have faith in the system and am still trading it.”