This new test is based on the QQQ and QID Trader (2007) script found on the old Wealth-Lab 4 site. The original script barely beats the Buy & Hold strategy over the 5.83 years of test (results will be provided shortly).

A number of modifications to change most of its trading philosophy and methodology were applied to more closely resemble mine. An underlying accumulative inventory stance changed the very nature of the script.

Improvements can only be called improvements if they can be compared from a common base. In this new test, the same testing conditions as in the first implementation are applied (43 stocks with $100k each). As in the prior test, a small position is taken initially and then the program tries to accumulate as many shares as available equity allows. Full utilization of the excess equity buildup is permitted however from observation it is not always fully used.

Here are the test results:

 QQQTrader Table

To accomplish the above level of performance, more pressure was applied to the trading component than in previous tests to such an extent that it produced most of the profits. The numbers are quite remarkable: over 90% compounded annual return.

To achieve about the same numbers as the test, it was required to set the parameters for the simplified Alpha Power equation to the following values:

 

QQQTrader equation

Based on the results, most of the emphasis has been on the piggyback trading module to produce higher returns. The efficiency of the trading module at generating excess equity is remarkable.

Looking at the table above this is not a minor modification to an old script that is in operation here. It must be that the changes applied, changed the very nature of the script.

Note that only 1 of the 43 stocks is still underwater. And since the methodology is basically a Buy & Hold routine, you can wait (hold) for better days as this particular position is a very small fraction of the total. One could also accept the loss and simply move on!

Also note that 6 of the tested stocks had zero stop losses. The winning trade ratio is almost 95%. This particular model (0.5) was still at level 0; with no covered call program and no leverage applied.

Here are the corroborating charts produced on the old Wealth-Lab 4 site: 


AAPL  27/5/2011 :: Piggyback Trading Module ADM  27/5/2011 :: Piggyback Trading Module AGQ  27/5/2011 :: Piggyback Trading Module AMZN  27/5/2011 :: Piggyback Trading Module

BHH  27/5/2011 :: Piggyback Trading Module BIDU  27/5/2011 :: Piggyback Trading Module CCK  27/5/2011 :: Piggyback Trading Module CF  27/5/2011 :: Piggyback Trading Module

CMG  27/5/2011 :: Piggyback Trading Module CRDN  27/5/2011 :: Piggyback Trading Module CSX  27/5/2011 :: Piggyback Trading Module DBS  27/5/2011 :: Piggyback Trading Module

DDS  27/5/2011 :: Piggyback Trading Module DIT  27/5/2011 :: Piggyback Trading Module ERX  27/5/2011 :: Piggyback Trading Module GLD  27/5/2011 :: Piggyback Trading Module

GTLS  27/5/2011 :: Piggyback Trading Module IBM  27/5/2011 :: Piggyback Trading Module IMAX  27/5/2011 :: Piggyback Trading Module IPGP  27/5/2011 :: Piggyback Trading Module

JNPR  27/5/2011 :: Piggyback Trading Module NFLX  27/5/2011 :: Piggyback Trading Module NTES  27/5/2011 :: Piggyback Trading Module PAAS  27/5/2011 :: Piggyback Trading Module

PANL  27/5/2011 :: Piggyback Trading Module PCLN  27/5/2011 :: Piggyback Trading Module SCCO  27/5/2011 :: Piggyback Trading Module SINA  27/5/2011 :: Piggyback Trading Module

SLV  27/5/2011 :: Piggyback Trading Module SLW  27/5/2011 :: Piggyback Trading Module SOHU  27/5/2011 :: Piggyback Trading Module SRZ  27/5/2011 :: Piggyback Trading Module

TBL  27/5/2011 :: Piggyback Trading Module TDSC  27/5/2011 :: Piggyback Trading Module TRMB  27/5/2011 :: Piggyback Trading Module TRN  27/5/2011 :: Piggyback Trading Module

TSCO  27/5/2011 :: Piggyback Trading Module TZOO  27/5/2011 :: Piggyback Trading Module ULTA  27/5/2011 :: Piggyback Trading Module URI  27/5/2011 :: Piggyback Trading Module

WLK  27/5/2011 :: Piggyback Trading Module WTW  27/5/2011 :: Piggyback Trading Module XOP  27/5/2011 :: Piggyback Trading Module


Created on ... May 30, 2011 © Guy R. Fleury. All rights reserved.

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