Could you use a purely mechanical timing formula that has produced 30 percent gains a year since 1986 with strictly controlled risk? Nelson teaches you everything you need to trade the Pankin Sector Fund Strategy for exceptional profits and reduced risk. The Pankin Strategy trades Fidelity Select sector funds. Sector funds tend to trend more consistently than individual stocks or commodities and produce unusually reliable trading patterns. If you had traded this simple yet powerful system over the past twelve years, you would have outperformed 99 percent of all CTAs. The Pankin Strategy takes just a few minutes each week to update, uses straightforward logic and works for virtually any size account.
The Pankin Strategy has a superb hypothetical track record — 35 percent annual gains since 1986 (real-time performance has been just as strong). However, the original strategy requires withstanding drawdowns most individual traders find unacceptable. Money manager Mark Pankin, developer of the system, posted returns of 57 percent in 1995 and 45 percent in 1996 but the drawdowns sometimes represented as much as 25 percent of total equity.
To better gauge the risk, Nelson tests the Pankin Strategy over a wider range of market conditions. In this workshop, he simulates Pankin trading back to 1970 (considerably longer than the Fidelity Select sector funds have actually been traded). You will see that the original strategy would have generated reassuringly strong profits throughout the past twenty-eight years but with frequent and often punishing equity drawdowns (the maximum equity dip would have been an unacceptable 45 percent).
To help curb the risk, Nelson introduces you to a variety of defensive tactics he uses along with the original Pankin Strategy. As he adds risk-control measures, you will observe a powerful trading system unfold. To insure that the evolving system is theoretically sound, he tests the findings across multiple portfolios, time frames and signals. The resulting variant of the Pankin Strategy has gained 30 percent a year since 1986 with just 12 percent drawdown!
Central to this final comprehensive trading system is a filter Nelson uses to confirm Pankin signals. He demonstrates how this indicator is almost certain to capture every major stock market trend. With this and other defensive measures, you will trade the Pankin Strategy more confidently to achieve aggressive profits with limited risk.
Building a Mechanical Trading System from the Ground Up (1996).
Testing is a critical area often neglected by technicians and traders. Nelson clearly demonstrates the ease with which testing can be performed given today’s sophisticated workstations and high-performance computers. The testing power that these tools provide is now readily accessible to all traders and managers.
Nelson describes the process of building a mechanical trading system, providing concrete examples of high-return/low-risk strategies for a range of markets. Nelson also shares his favorite high-performance trading systems tested on TradeStationTM. The code (which is given to you) and methods Nelson uses are clearly stated and can be translated for use with many other popular software systems.
PDF Workbook
Nelson Freeburg is editor of Formula Research, a monthly financial letter that builds systematic timing models for the futures, fixed income, cash, and stock markets. Nelson took up trading while pursuing a Ph.D. at Columbia University. Totally absorbed by the financial markets, Nelson left academia. He decided to let the markets, rather than the university, provide his education. He began publishing Formula Research in 1991 in order to share his findings with a small nucleus of professional traders. Today, Formula Research serves hundreds of money managers and serious researchers in the cash and futures markets. Nelson’s subscribers include many of the leading names in global trading and finance. Nelson initially confined his research and trading to chart signals. When overall results proved poor, he began to examine point and figure, Elliott Wave, Market Profile, candlestick analysis, and an assortment of other technical theories. Nelson considers all of these methods deficient in their application because of their reliance on subjective judgement. In particular, Nelson feels that chart patterns become elusive in fast-paced, highly leveraged markets (such as cash foreign exchange) and that the clear buy and sell signals illustrated in textbooks rarely appear as clearly and reliably in practice. To address these shortcomings, Nelson began testing the theories of leading technicians as well as his own theories against an extensive historical database covering a broad variety of traded market items. Nelson uses the financial database he built, which reaches back into the last century, to test systems in which he can examine clearly defined and precise mechanical buy and sell signals, devoid of subjectivity. Using these objective standards, Nelson can rigorously evaluate complex system features. Additional rules, such as the user’s profit targets and stop orders, or mental stop points, can further strengthen this testing process. As a result of his research, Nelson has developed an impressive number of advanced trading systems.
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In response to comments above that this strategy is out of date and has no current record, there is actually areas on Pankin's website that are up to date from 1996 through to the present. Here are recent yearly returns:
Year Selects System Index 500 Weekly Trade Lists & Computations
1996 31.2% 21.9% 1996 Weekly Trade List
1997 33.1% 28.6% 1997 Weekly Trade List
1998 17.1% 27.7% 1998 Weekly Trade List
1999 56.4% 19.6% 1999 Weekly Trade List
2000 32.0% -10.8% 2000 Weekly Trade List
2001 -20.5% - 9.5% 2001 Weekly Trade List
2002 -23.8% -21.3% 2002 Weekly Trade List
2003 18.4% 28.2% 2003 Weekly Trade List
2004 14.7% 8.8% 2004 Weekly Trade List
2005 12.5% 7.4% 2005 Weekly Trade List
2006 12.8% 13.6% 2006 Weekly Trade List
2007 11.2% 6.9% 2007 Weekly Trade List
2008 -42.4% -38.4% 2008 Weekly Trade List
2009 90.5% 32.9% 2009 Weekly Trade List
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Average(96-09) 17.5% 8.3%
These can be found here: http://www.pankin.com/select/trades.htm
I suspect that the big draw downs shown above would be largely avoided if a trader added the Pentad filter that Nelson Freeburg describes in his variation on this system.
Sam Stoval, Chief Investment Strategist of Equity Research at Standard and Poors, in his 2009 book, "The Seven Rules of Wall Street" describes in detail a similar investing approach using the nine S&P 500 sectors, using ETF's and back tested to 1990hen sector ETF's came into being. The result is that the method outperforms the S&P 500 by 400 basis points for a 14.6% annual rate of return--that was for 1991 to 2007.
Using equally weighted Rydex sector ETF's upped the returns to just over 700 above the S&P's with a standard deviation of 13.7, well below the market's 16.5, and doing so 7 out of 10 years. This looks like an excellent approach for a conservative investor, and is Stovall's favorite of the 13 portfolios presented in detail. There are a couple of approaches that have higher returns, but also have a portfolio turnover of about 300%.
Stovall's book is worth the price for just this one investing approach alone, IMHO.
Putting aside its antiquity, I found the audio very annoying. Very scratch. No one else mentioned it, so perhaps its unique to me. It doesn't happen with any of your other webinars.
Tom
I found this audio interesting but also frustrating since it was from 1997 and there's no update. I checked both Freeburg's and Pankin's websites.
Pankin seems to be much more interested in the "Dogs of the Dow" system now. And Freeburg's site is quite spare.
Neither has written or talked in public about this strategy much since the mid-90's and there are no books on Amazon by either man. Also very little on the internet about this.
With 35% annual returns, 10 years later you'd think more people would be talking about it but I can find almost nothing.
It's basically buying whatever sector has the most relative strength at that time, which doesn't seem all that unique.
It is interesting but with no current information and little follow-up after 12 years it's hard to know what this is all about or why it was posted here.
Any comments?
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Tim,
Yes, this seminar is a little bit older. Here is one site I found regarding Pankin: http://www.pankin.com/dow/. We try to share all of the information we have stored in-house. So... we put it out there and you can decide how you want to use it. Let me know if I can try to help with anything else.
Thanks for the comments.
Best,
Lindsay Thompson
Director of New Business Development
INO.com & MarketClub
this guy promoting a timing model which he contends is a top program.
http://club.ino.com/trading/2008/12/saturday-seminars-trading-the-pankin-strategy-for-30-annual-gains-low-risk/
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We put out information from all types of well-known traders who all have recommended strategies and various methodologies. There are many different methodologies and trading strategies out there... this is just one of them.
Best,
Lindsay Thompson
Director of New Business Development
INO.com & MarketClub
Hello..your charts and loga and graphs all relating to timing the market ,means nothing in this melted down market..ahowever what realy counts in making back 401k money is he current opportunity bin low price high yield strong business and overlooked companies...such is the SEA Shippers comprising the DBI index..The DRY BULK INDEX....take a company like Safe Bulkers
only on the NYSE about 7 months..Earnings recently up 85% andthey declered a new incresed
dividend og .475 cents per share or $1.90 oer year per share yet the price in holding around 5 bucks after bottoming in November..they went
public with 10 mil shares @ 19.75...business is
expected to bouble ove 09 into 2010 and beyond....also in the DBI index is EXM DSX DRYS NM and many others in that index that with triple in price in he comming BULL MARKET .This BULL MARKET will happen around the time Pres Obama
takes office...This Bull Market will in my opinion stagger but growth to over 11000 on the DOW .This will be a surprise to most investors who will probably attach themselves to this BULL
market when the stocks rise 50% from here...This is my opinion only but thaught i would share my thinking with you>>>>>THanks