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Gibbons' Trading
Timer Digest 2002/2007/2008 Timer of the Year
Gibbons' Trading Blog: "I don't think trading strategies are as vulnerable to not working if people know about them, as most traders believe. If what you are doing is right, it will work even if people have a general idea about it. I always say that you could publish trading rules in the newspaper and no one would follow them." -Richard Dennis- "It's not luck Todd" -Louis Winthorpe III in Trading Places- Many ask what is the basis of your trading system? The answer to that question (kind of) is provided below
Gibbons' Value Trading Method (VTM)
There is no Holy Grail- but the VTM is close
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 price based trend following and pattern recognition 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 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 concept that lies beneath the VTM. If we know where a market has been, we also know where it is most likely to go. Once a market or stock breaks out of a defined range, it is likely to continue in the direction of the break out. After the break out, we use a proprietary amalgamation of two trend following systems to ride the trend until the trend terminates.
A screen shot of the VTM Trend Following Model's buy and sell signals in the S&P 500 Note that blue bars at the bottom of the screen indicate an uptrend while red bars indicate a downtrend. I go long when the bars are blue and short when they are red. Very simple- but very effective. The bars are based on closing prices and a measure of time which is then translated into an indicator of trend. This is currently all I use to trade and this method has made myself and my clients significant profits over time with very few losing years. Publication schedule Gibbons' Trading financial publications are sent to you every Sunday morning. In addition, unlike other financial information writers that have a fixed publication schedule, we publish whenever the markets tell us to act. In a very active market, you might receive updates several times a week. We provide a totally disciplined approach to trading with no emotion added. We are not fundamental traders that write reams of prose with "stories" that support our trades. You get high probability trades, and we make occasional specific market comments based upon the Value Trading Method. The VTM is a proprietary price based trend following and pattern recognition 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 little 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. Because of our track record, our publications are not inexpensive. This is logical as our clients are willing to pay for the edge we provide on a consistent basis. Subscribers to our VTM publications include large traders, banks, forex dealers, hedge funds, brokers, futures funds, insurance companies, risk management firms, and many institutional money managers. Gibbons' trend following trading models work because they cannot miss a major market move by definition, and they cannot be on the wrong side of a moving market for long (cut losses short). This eliminates two of the major causal reasons for trader failure. The first reason is that many traders fail to capitalize (they miss the trade) on occasional major market moves that are responsible for much of the profitability in any given year. The second reason is that many traders allow losses to run. Disciplined systematic trend followers cannot let losses run because most trend following models will jump out of losing trades fairly quickly and reverse course to get on the right side of a directional move.
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The secret to our success is that we do not forecast or predict One of the biggest mistakes the vast majority of investors and traders make is to hold to the premise that you have to be able to forecast to make money in the markets. That is why "forecasting" services and predictions are so popular. People attempting to tell you (for a price like a fortune teller) what the best stocks are to hold for the future, what a stock will do a year from now, or if gold will be higher or lower in two years. Gurus galore and they tell you with great hubris how they have a special connection to the future. The reality is, no on can predict or forecast markets with any consistency over long periods of time. The reason for our success is precisely the opposite of making predictions. We follow trends- we don't predict anything. If a market is going up, at a certain point we go long because a market going up is repeating what it has done recently- that is, going up. If a market is going down, we sell and sell short. We don't have price objectives or targets and the so-called analytical methods employed by most stock analysts are worthless. We simply get aboard the bucking bronco and ride the horse in the direction it's going.
ETF Publication Our ETF Publication features a 100% Systematic Trend Following Model Portfolio 2009 ETF Twin Bar Trading System +46.4% 2010 ETF Twin Bar Trading System +2.7% (updated quarterly) The ETF Publication employs a proprietary mechanical trend following method developed by Michael Gibbons. No attempt is ever made to call or predict market turning points- since no one can do that consistently. Because we are trend followers, we are able to take big chunks out of large directional market moves. Trading signals are offered for three highly liquid stock index ETFs (DIA/QQQQ/SPY) and they are based on daily closing price data with no other inputs. We are always in the market long or short, and we average about four (4) signals per year for each of the three ETFs. 1 year subscription $25,000.00 Futures Publication We offer two (2) Model Portfolios Futures Option Writing Model Portfolio 95.6% winning trades S&P 500 Twin Bar Trading System has produced 76.0% winning trades since 2000 and $38,772,360.00 in profits (as of 2/5/2010) **all-time high equity high** We offer one Model Portfolio for futures trading and one Model Portfolio for writing options on futures. The Futures Model Portfolio only trades the S&P 500. Our VTM Option Writing Model Portfolio has been highly profitable in real-time trading. We write out of the money puts and calls in select markets and employ several proprietary credit option strategies based on signals generated by the VTM Futures Trading Model.1 year subscription $30,000.00
Private Research & Mentoring We provide our proprietary research to clients on an on-demand basis. The Value Trading Method (VTM) is capable of analyzing any freely traded market or stock in the world. If it is contained in our extensive CSI data base, we can research it for you. This research is designed for mutual funds, large institutional traders, and hedge funds that require ongoing generic buy and sell trading signals. Please inquire as to pricing. P rivate mentoring is made available to a very small number of traders per year. Michael Gibbons personally provides sixteen hours of one on one individual instruction, and the ability to speak with Mr. Gibbons several times per week for one year. The psychology of trading is stressed as well as trade selection and money management. Mentoring clients receive at least two mechanical trend following trading methods as well as the general conceptual basis of Gibbons' VTM Trading Method. Mentoring students are taught to fish so that they can catch fish in the future without any help from the mentor. Mentoring students must be prepared to unlearn what they think they know about trading to be successful. Those students who are able to unlearn old concepts and beliefs and learn new concepts- will be given the opportunity to make a large amount of money.1 year mentoring $15,000.00 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. Due to the nature of our trading, we can (and will) have periods of losses-sometimes long periods of losses. If you cannot afford to have trading losses from time to time, you should not trade. Note that Timer Digest receives our discretionary intermediate and long term market timing signals for the S&P 500. We reserve our short term timing signals for subscribers only. Therefore, our Timer Digest intermediate and long term market timing signals may not be in alignment at any given time with the short term VTM trading signals that we use for futures index trades and ETF trades that are in our Futures and/or ETF Model Portfolios. Note we do not offer refunds for any reason. Before you subscribe, make certain you are clear on the content of the publication you will be receiving. UNAUTHORIZED DISCLOSURE NOTICE CONFIDENTIALITY NOTE: The information contained in the Gibbons' Trading ETF and Futures publications is private, legally privileged and confidential information intended only for the use of registered subscribers. If the reader of either the Gibbons' Trading ETF or Futures publication is not the intended recipient, you are hereby notified that the reading, dissemination, distribution, forwarding or copying of the Gibbons' Trading ETF and Futures publications is strictly prohibited and grounds for the immediate termination of the subscription, without the right of refund, of any registered Gibbons' Trading subscriber who participates in such distribution, dissemination, forwarding or copying. Gibbons' Trading reserves the right to monitor the use of the Gibbons' Trading ETF and Futures publications, by whichever electronic means it deems appropriate. WARNING: Reproduction of any of the material contained in the Gibbons' Trading ETF and Futures publications, forwarding of same, or any portion thereof, by e-mail, fax, photocopying or any other means, substantial quotation of any portion of the Gibbons' Trading ETF and Futures publications, or any other use of same by any person other than the registered subscriber, without the written permission of Gibbons' Trading LLC, may violate copyright laws and subject the violator to legal prosecution. All rights reserved.
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