Sand2Pirls Market Signal

Risk Management

Please understand that no market timing system is perfect, including ours. If you trade securities, you will experience draw-down as well as trading losses, and should only invest risk capital. However, it is important to have enough confidence in your trading system to be able to be patient with it through the draw-downs and losses. An unfortunately common scenario for new investors is to select a system which has recently experienced unusual success, but soon goes through a very difficult, high draw-down period. At this point, many inexperienced investors sell their positions at a loss, move on to select another system that was successful during this difficult period, but which soon also experiences great difficulty, thus repeating the cycle and loosing even more precious capital. To avoid this scenario, wise investors determine their investment strategy carefully, and know how much more than the historical draw-down they can weather.

Free Risk Management Game

Based on the position sizing experiment by Ralph Vince reported in Technical Traders' Bulletin, March 1992, and Van Tharp's marble game discussed in his book, Trade Your Way to Financial Freedom, Sand 2 Pirls has developed a Risk Management Game to help you acquire the position sizing skills essential for successful trading and investing. Van Tharp's game is available free from his web site but requires a 63.8 MB download and installation.

You can play our game right now. It only takes a few minutes or even seconds to play. No installation is required, but you must have Microsoft Excel installed. Turn off your pop-up blocker and click the button above. Import the Sand 2 Pirls, Inc. digital certificate and allow macros when prompted. If you have trouble launching the game from this site, you can download the game in zip format, extract it on your PC and play it there.

Our Track Record: Real Time Portfolios

Our portfolios published here are not "back tests." They were managed in real time using S2P Market Signal timing and various stock selection strategies. 

2005 Portfolios
These are all our 2005 tracking portfolios. We did not discard any poor performers.

Portfolio 1: 104% Summary Transaction Detail

Portfolio 2: 124% Summary Transaction Detail

Portfolio 3: 225% Summary Transaction Detail

Portfolio 4: 143% Summary Transaction Detail

Portfolio 5: 175% Summary Transaction Detail

How about 2006 and 2007? 

In 2006, the S&P 500 beat the Nasdaq Composite Index which rose less than 10% for the year with a total range of less than 20%. Until the end of July 2006, the market was not trending strongly. At least one prominent long term market observer and advisor commented that this period was the most difficult he had seen in over a decade. After extensive analysis of our 2006 signal calls, we decided against modifying our trend following model, since the required changes would hurt more than help in other recent years and in our estimation would be likely to make future signal calls less reliable with greater draw down.  In short, 2006 was not a good year for long term trend following systems, but the lack of a strong trend prior to August did not justify modifications to S2P Market Signal version 4.268. 

As of June 15, 2007, both the Nasdaq Composite and the S&P 500 are up about 8% for the year with the S&P 500 leading the Nasdaq slightly. Thus it appears that 2007 may provide us with a similar scenario to 2006, albeit more bullish if the low in March 2007 becomes the pivot to the upside for the year.

In summary, Sand 2 Pirls Market Signal can help maximize market gains when the market moves strongly up or down, and although we may not beat the market in relatively flat periods, the advantage of being in the market to take advantage of strongly trending periods more than compensates.

Membership plans: $19.95/recurring monthly... $22.95/one month... $39.95/two months... $99.50/six months...

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