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2008 stock trading profit -10.6% 2008 futures trading profit +53.5% We provide our VTM trading signals to hedge funds, large traders, and institutional money managers Our proprietary VTM Trading System combines value investing, market timing, trend following and money management 69.5% winning ETF trades 73.7% winning stock index trades $6,400,118.00 in closed stock trading profit since September 1996 $31,400,975.00 in closed stock index trading profit since August 1999 Gibbons' Trading LLC is engaged in proprietary trading, research, and publishing. Gibbons Trading LLC is operated by Michael Gibbons. All buy and sell signals are based entirely on his Value Trading Method (VTM). The VTM is a fully integrated trading method that combines value investing, market timing, trend following, and money management. Because of the screening process that is an integral part of the VTM, the most basic problem has been solved for successful investing-what to buy or sell and when. Our method differs from standard trading systems because we make fewer trades. For us, having fewer trades results in a higher winning percentage and less overall risk.Michael Gibbons has been trading since 1968, and was one of the first to discover what is now known as stock index arbitrage. He was one of the first to use computerized trading-his first computerized trading method was programmed in 1971. He worked for major brokerage firms and has managed large amounts of money. He eschews industry organizations, and is now a very private trader and researcher. He is a self-made millionaire and has won consistently in the markets since his discovery of the Value Trading Method in 1997. He currently provides his highly proprietary research primarily to large traders and hedge funds. His fees for his proprietary stock and futures market research are among the highest in the world. Gibbons' Trading LLC currently offers publications dedicated to stock index trading, ETFs, and futures. Pricing for our two publications can be found by clicking on the subscription button below. The only way to obtain our model portfolio trades is to subscribe to our publications, as we do not provide trading positions to anyone other than our subscribers.
Timer Digest 2002 and 2007 Timer of the Year Top Long Term Timer Last 2 Years
Gibbons' Value Trading Method (VTM)
The discovery
of the Value Trading Method (VTM) enables
us to win at a rate far greater
than traditional investment strategies. If you examine the trading
results below, you will see why we think the Value Trading Method (VTM) is
one of the most effective trading methods ever discovered. This is not hype or
some exaggerated claim in any context. Simply examine our trading record-it
speaks for itself.
The VTM is a proprietary black-box "quant" method of trading that uses a minimal number of
parameters so as to not reduce statistical degrees of freedom. The accuracy and
profitability of VTM trades continues to be consistent with acceptable deviation
from the mean. We have enhanced the money management aspect of our trading, and
thus we expect continued gains with even less volatility of returns. The VTM
over ten years of real time trading has proven to be among the most profitable
trading methods in the world.
The VTM
combines value investing, market timing, trend following and money management.
It is an integrated and statistically robust trading method that trades with a
significant edge. The accumulation of edges on a per trade basis produces large
profits in most years. Low probability situations are ignored, and high
probability situations are always employed.
All price action is based on the
axiomatic value concept that lies beneath
the VTM. If we know where a
market has been, we also know where it is most likely to go. No attempt was ever made to improve upon the
original VTM discovery, since the discovery is the basis of all market movement-both in the
past and in the future. The VTM, as opposed to the optimized trading methods that are
popular with most traders, has only one parameter and an entry/stop technique so as to not
reduce statistical degrees of freedom. It is far too uncomplicated to be believed, yet The
Value Trading Method reveals the very essence of all market price action.
A
screen shot of the VTM analyzing the S&P 500
"We cannot direct the wind, but we can adjust the sails."
Michael Gibbons
Eight Trading Basics & Rules
Michael
Gibbons' Important
Trading and Investing Concepts
There are many important things you
need to know to trade and invest successfully
in the stock market or any other market. Eight of the most important things that I can share
with you based on many years of trading experience are
enumerated below. 1. The market is always right
and price is the only reality in trading. If you want to make money in any
market, you need to mirror what the market is doing. If the market is going down
and you are long, the market is right and you are wrong. If the market is going
up and you are short, the market is right and you are wrong. Other things being
equal, the longer you stay right with the market, the more money you will make.
The longer you stay wrong with the market, the more money you will lose.
2. The trend is your friend. Since
the trend is the basis of all profit, we need long term trends to make sizeable money. The
key is to know when to get aboard a trend and stick with it for a long period of time to
maximize profits. Contrary to the short term perspective of most traders today, all
the big money is made by catching large market moves-not by day trading or short term
trading.
3. If you are looking for
"reasons" that stocks or markets make large directional moves,
I can tell you that you will probably never know for
certain. Large institutional investors and well capitalized players move markets
for reasons known only to them. Since we are dealing with perception of
markets-not necessarily reality, you are wasting your time looking for
the many reasons markets move. A
huge mistake most investors make is assuming that markets are rational or that
they are capable of ascertaining why markets do anything. To make a profit trading, it is only necessary
to know
that markets are moving-not why they are moving. The most profitable traders only care about direction and duration,
while market losers are obsessed with the whys.
4. Markets generally move in advance
of news or supportive fundamentals-sometimes months in advance. If you wait to invest
until it is totally clear to you why a stock or a market is moving, you have to
assume that others have done the same thing and you may be too late.
The market reaction to good or
bad news in a bull market will be positive more often than not. The market
reaction to good or bad news in a bear market will be negative more often than
not.
5. You must
let your profits run and cut your losses
if you are to have any chance of being successful. Trading discipline is not a
sufficient condition to make money in the markets, but it is a necessary
condition. If you do not practice highly disciplined trading, you will not make
money over the long term.
In my long market
experience, at least 90% of investors lack the necessary discipline to be
successful. Emotion will replace discipline for most investors at the most
critical of times. This is the real reason most people cannot beat the market-
the market simply beats them psychologically.
6. The Efficient Market Hypothesis (EMH) is fallacious
and is metaphysically a derivative of the perfect competition model of capitalism. The
EMH at root shares many of the same false premises as the perfect competition
paradigm as best described by economist George Reisman in his work Platonic
Competition. The EMH was created by University of Chicago academician Eugene
Fama, who borrowed many of the same concepts from another University of Chicago
professor- Frank H. Knight. Knight in Risk, Profit, and Uncertainty
(1921) provided the intellectual basis for the EMH forty years earlier by
describing perfect competition. The perfect competition model
of capitalism and markets (and the EMH) is not based on anything that exists on this earth. Inefficient markets can last for long periods of time.
You see, there is no valid reason to think that investors are rational. That is,
the EMH is based on a false premise that investors are rational. It is precisely
because investors are irrational that trends last for much longer than any
rational person could reasonably expect. You cannot explain away bubble periods
in markets as just an aberration. "Irrational exuberance" is hardly a rare
phenomenon. The presence of large emotionally driven swings in markets gives
trend followers an opportunity for large profits.
7. You should make your own
trading decisions. Never trust the
advice and/or ideas of trading software vendors, system sellers, market
commentators, financial analysts, brokers, newsletter publishers, trading authors, etc., unless they trade
their own money and have traded successfully for years. You should note that
those that have traded successfully over very long periods of time are very few
in number. I know some very rich traders, but no rich analysts.
8. There are no market gurus. Good
traders take advantage of high probability trades and capitalize
on timing, direction, and duration. Beware of all self-proclaimed or self-anointed gurus.
Most of them are net losers in the markets. The biggest scams are perpetrated by
prompters of the teachings of dead gurus that employed waves, cycles and
angles.
"I agree with
the metaphysics of technical analysis that the fundamentals are discounted. You
don't get any profits from fundamental analysis; you get profit from buying
and selling. So why stick with the appearance when you can go right to the
reality of price and analyze it better?"
Richard Dennis
"The market is always right and
price is the only reality in trading. If you want to make money in any market,
you need to mirror what the market is doing. If the market is going down and you
are long, the market is right and you are wrong. If the market is going up and
you are short, the market is right and you are wrong. Other things being equal,
the longer you stay right with the market, the more money you will make. The
longer you stay wrong with the market, the more money you will lose."
Michael Gibbons
Gibbons'
Trading ETF/Stocks Model Portfolio 69.5% winning ETF
Closed Trades
Stock
Trading Performance
(Updated 7/4/2008)
Stock
Trading Performance
Yearly Rate of Return for all trades issued in our
ETF/Stocks Publication
The Rate of Return table
above reflects the results of all stock trading
in our ETF/Stocks publication based on our
Value Trading Method since September 1, 1996. The Yearly Rate
of Return is determined by dividing the Net Profit/Loss on all trades divided by
the average account size required using 50% margin. There was no option
trading.
Interest income has not been included nor have commissions
been deducted from results. Commissions are not a significant weight on trading
results because of the length of our average ETF/stock trade (two months). The
margin percentage used is generally 50%. Margin was not used in all trades, and was
employed about 65% of the time.
Our ETF/Stocks Model Portfolio trading record is based on trading individual
stocks only until early 2002, and after that, it is an amalgamation of stocks
and ETFs. At the present time, 100% of our trading in our ETF/Stocks publication
is in ETFs.
Value of a $1000 account started in 1996 for all trades made in our VTM ETF/Stocks
Model Portfolio
A
$1,000
investment made in 1996, is now worth
$58,087.91
Gibbons' Trading VTM Short Term Futures Model Portfolio
Trading
Record Futures
Trading Information
We have made considerable profits
for our subscribers over the past seven years
since the inception of the Futures publication. As good as our record is, we do not
win every month and we do have losing periods. That is why we recommend that
you capitalize your futures account at least four times
minimum margin requirements. Winners approach
futures trading as a business. Any business requires sufficient capital to
sustain it. One of the major reasons a business fails is because of under
capitalization. If you are trading, you must have adequate capital if you want
to remain in business. If you do not have adequate capital,
do not trade.
If you look at the failure rate
of most futures traders, the only conclusion you can come to is that many traders
really want to lose their money. This observation is from many years of dealing
with thousands of traders-the vast majority of do not have the necessary
discipline to be successful. Many traders are in the markets for thrills and
have a gambler's mentality. If you have a psychological need to lose money in
the markets so that you can get attention from friends and/or loved ones, we
suggest you not trade.
At times, the margin requirements
to take all of our trades would be too great for some smaller traders. This is
why we stress over and over that you must have enough
capital to trade futures. We need staying power to
hold valid trend following positions when they are
somewhat against us, and we do that
by having plenty of money in reserve.
Each VTM
Futures Short Term Model Portfolio trade we give to our subscribers
varies greatly as to the number of contracts assigned to that
specific trade. Most of the time, we employ multiple contracts to capitalize on what we
perceive as a high probability situation. Clients are certainly free to
adjust the number of contracts they trade to suit their individual situations.
Obviously, smaller accounts will trade less and substantial
accounts may hold larger positions.
Futures Trading Equity is updated every week and marked to
the market. Our VTM Short Term Model Portfolio has been highly profitable in the past and
we expect it to continue to be profitable in the future. Commissions and
slippage have been
deducted from results and interest credit has not been added. The average margin
to achieve the results below was 21%. The average drawdown was 23.7% with the
greatest drawdown 50.51% in 2004. We changed our money management algorithm in
2004, and as a result, our average drawdown for 2005 and 2006 is 11.0%. The
largest drawdown in 2007 was just 2.7%.
Most trading programs are so short
term that commissions and slippage dissipate much of the profit because of the
high turnover. For us, we trade so infrequently, that commissions and slippage
are generally a non factor. Note that we margin only 10-20% of total
account equity. This means that the return percentages listed below are 4-5X
greater if we were to calculate return on margin.
Gibbons' Trading VTM Short Term Futures Model Portfolio
Return on Equity (10% margined/90% cash reserve) (updated 7/4/2008) 2001= +203.5% 2002= +46.8% 2003= +6.21% 2004= +45.7% 2005= +147.1% 2006= +352.9% 2007= +133.3% 2008= +17.0%
Gibbons' Trading VTM Weekly Futures Model Portfolio
Return on Equity (20% margined/80% cash reserve) 2007= +21.8%
2008= +53.5%
The Commodity Futures Trading Commission requires we display the following
disclaimer and it applies to any futures trading statistics or other
futures trading information found on this site:
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 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. RESULTS NOT ADJUSTED FOR
COMMISSION AND SLIPPAGE.
There is a
risk of loss in trading stocks, currencies, bonds, futures or any other
financial market. Please be certain that you thoroughly understand the risks
involved in trading before you trade.
Gibbons Trading LLC does not
offer person to person individual advice nor will we comment on any specific
issue related to trading. We do not tailor our trades to fit any specific
person's portfolio. We do not manage customer funds. We are not commodity
trading advisors or investment advisors. Gibbons Trading LLC
is a stocks and futures electronic information publisher. We provide buy
and sell signals for a wide variety of markets based on our research.
Any trading of
stocks, bonds, currencies and futures involves risk-sometimes substantial risk
depending on current market conditions. If you cannot afford to take any risk,
do not subscribe to our publications. While we have made every effort to
eliminate volatility of returns by proper risk management, future trading
performance is not guaranteed nor is it implied. |