How to read a trading track record
Three kinds of numbers show up on trading sites. What each one tells you, what it leaves out, and five questions to ask any service, including us.
Every trading service shows numbers. They are not all the same kind of number, and the kind matters more than the size.
Three kinds of numbers
1. "The price got there"
A service names an entry, then counts how far the price went from it: "doubled from our entry", "up 300% since we called it". That measures the best price after the call, not a trade. Nobody sold at the top. There is usually no exit, no stop and no costs, the calls that never worked are often not in the count, and there is rarely a way to check when the call was made. The number can be true and still tell you almost nothing about what a follower made.
2. Backtests
A rule tested on past data. Done carefully, with the settings fixed before the test, costs counted and data the rule wasn't built on, a backtest tells you whether an idea held up in the past. It is still not trading: nothing was filled, and it was built with hindsight. Futures rules (CFTC Rule 4.41) require every backtest figure to carry a label and a fixed statement saying exactly that. That is why ours do. A backtest with no label, or one that shows only its best years, is worth less than one that shows its worst.
3. Every published call, counted
Calls posted at the time they are made, before anyone knows how they end, with every losing call kept and costs counted. It is still not your account, because your fills and size differ. But it is the closest a publication can get to a real record, and if the times can be proved, it can't be edited afterwards.
Five questions to ask any service
- Are the losing calls in the count? Ask for every call, not the best ones.
- Is there an exit? A result needs an exit, not just the best price reached afterwards.
- Are costs in? Commission and slippage on every trade turn many small edges into nothing.
- When was the call made, and can you prove it? A time the service controls can be changed.
- Is it a backtest? If so, is it labelled, and does it show the worst stretch as well as the best?
How we answer them
- Losing calls: every read stays in the members' daily read and goes on the record 24 hours later, losers included.
- Exits: each call says when the rule goes in and when it is flat again, and the next call follows from there.
- Costs: every backtest figure on this site counts commission and slippage on each side of every trade.
- Proof of time: each call is written into a hash-chained ledger before it is posted, and each day's ledger is timestamped with OpenTimestamps, so a call can't be changed or back-dated without it showing. Anyone can check it on the ledger.
- Backtests: labelled as hypothetical, with the full statement, settings fixed before testing. What failed is listed in What we tested, including what failed, and every backtest trade is in the archive. The Open and The Close each have a course lesson on their worst year.
None of this makes our numbers a promise. It makes them checkable.
Education only. Nothing here is advice about your account.