Aberration is NOT a Curve-Fit System |
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NOTICE: “HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.” |
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Curve-fit systems yield extraordinary performance in computer testing because the system rules/parameters have been "tweaked" to fit the data. The more rules and parameters in a system, the greater the danger of curve-fitting. The problem with curve-fit systems is that real-time performance doesn't match back-tested performance. A clue to a curve-fit system is one that uses "unique" rules for each market, or different parameter values for each commodity it trades. Aberration uses one equation and one entry and exit rule for all 57 commodities. The equation has only one parameter, and the same parameter value is used across all 57 commodities. Clearly, Aberration is not a curve-fit system. |
Aberration is Profitable Over a Wide Range of the
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Another symptom of a curve-fit system is erratic performance across the range of it's parameter values. If the profits vary widely with changes in the system parameters, beware. The profit curve should vary slowly as the parameter values change, with a wide range of profitability. Moreover, if the system is based on sound principles, the system should "work" on a broad spectrum of commodities, not just one or two. The following graph shows Aberration's performance over a wide range of the single system parameter. To determine system profit for a given value of the parameter, enter the x axis and read up until intersecting the solid line, then read over to the left axis to determine the total profit for all 58 commodities at that parameter value. To determine profit per trade for the same parameter value, enter the x axis at the same spot and read up to the dotted line. Read over to the right axis for the profit per trade. For example, a parameter value of 70, yielded approximately $1,400,000 in system profits, while the average profit per trade was approximately $450. A slippage and commission figure of $75 has been deducted for each 60-day trade segment. 
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