Hidden Secrets of EOD SR trading systems

Long days before I had seen one advertisement on leading Business News Paper. On that advt. they have
mentioned they would provide tomorrows niftys Turing Point, for that they are providing software and
they climbed you earn very good return based on Turning Point.

I also had some curiosity to learn this turning Point, Because some of my trading friends told they are
following one web site(I dont want to name it) from there it will give tomorrow nifty Buy sell Point. In
the same web site they have given 3 years Track records which gave 7500 Points ( in free analysis
system). By average it gave 208 Points per month i.e. Rupees 10400 per month and it would gave Rs
124800/- per Year. If niftys Trading Margin for one is Maximum 50000/- then CAGR is nearly 400% is
great.

Since this software similar to that website formula I bought the software which asks to enter nifty EOD
price based on that it gave Tomorrows Turing Point

Using common sense I could able to write a AFL Program similar to that software
Here You can see nifty EOD chart where TP is Ploted. It data from 25th
th march 2011 to 31 oct 2011 chart

On eye it Looks like very good Trading system

system. Then I added Buy sell signals

Some Pain Areas I Have rounded. I b

back tested using EOD according guidance given by the software
vendor.

Last six months it gave 1123 Points.. after deducting brokerage it gave 51370 profit

With initial capital of 50000/ you can make it double with six months!!!!!.
 Equity curve of the system

This what software vendors telling to their clients as well as they Put in their Track records in their web
site.

Trade Date Price Ex. date Ex. Price Points

Short 18-04-2011 5813.06 20-04-2011 5870.6 -58
Long 20-04-2011 5804.32 28-04-2011 5784 -20
Short 28-04-2011 5838.66 27-05-2011 5466.35 372
Long 27-05-2011 5461.26 10-06-2011 5484.15 23
Short 10-06-2011 5514.18 14-06-2011 5515.8 -2
Long 14-06-2011 5504.93 15-06-2011 5450.6 -54
Short 15-06-2011 5505 24-06-2011 5484.05 21
Long 24-06-2011 5393.88 12-07-2011 5539.95 146
Short 12-07-2011 5593.45 13-07-2011 5599.75 -6
Long 13-07-2011 5593.8 15-07-2011 5586.95 -7
Short 15-07-2011 5593.93 19-07-2011 5624.3 -30
Long 19-07-2011 5593.54 20-07-2011 5569.55 -24
Short 20-07-2011 5596.16 22-07-2011 5645.55 -49
Long 22-07-2011 5592.15 26-07-2011 5574.35 -18
Short 26-07-2011 5604.82 30-08-2011 5003 602
Long 30-08-2011 4979.74 12-09-2011 4942.45 -37
Short 12-09-2011 4979.4 14-09-2011 5019.15 -40
Long 14-09-2011 5014.36 22-09-2011 4913.9 -100
Short 22-09-2011 5051.72 29-09-2011 5019.4 32
Long 29-09-2011 4978.65 30-09-2011 4934.3 -44
 Short 30-09-2011 4977.32 10-10-2011 4993.3 -16
Open
Long 10-10-2011 4914.82 31-10-2011 5347.1 432

Nett 1123
1123 Points in six Months !!!!
Winning % is Just 30% but Nett profit is important.

Now we will get into system

Take 29 aug 2011 Nifty Closed @ 4933.15 the system was in sell and told for tomorrow buy above
4979.74 i.e. You should buy above 4979.74 if You Look Performance result (i.e Track record it gave exact
4979.74) Buy Price

Now we ZOOM EOD Chart

Honestly nothing wrong with system

Now we will zoom intraday Chart

 This is 29 aug 2011 5 Min Chart.

I Plot Horizontal Line at Turning Point and if 5 Min candle above TP buy signal would appear if 5 Min
candle close below it sell.

So Intraday chart give 7 Trades where if U Look EOD chart I gave only one Trade.

Now we go to 14-sep-2011

I Have zoomed EOD chart.14 sep 2011 date is rounded

There is no Trade as per System

Now Look at Intraday chart

It gave 6 Trades in Intraday but EOD chart ignores it

This is the problem with EOD Stop and Reverse system if we contact the software vendor they will guide
Put 25 Pts Intra Day Stop .They will tell even if You Loose 20% of Points By this whipsaws, still You Gain
900 Points and they are giving 100% Transparent system.

OK Let us Look What happened if take count in Intraday whipsaws

Now Look the equity curve

Trading system Performance with Intraday Levels

One Lakh capital reduced to 67483.30 Nearly 33% capital Loss.

Equity curve at any stage not showing any Positive. Winning % is just 6.30%

if contra Trade then We can earning 30000/- with winning ratio of more than 90%!!!!!!!

Though I am not recommending you to trade contra Trade which is against logic, for understanding
purpose I attached the report.

OK Now Look What happen if we took trading decision at EOD closing price

Trading system Performance with EOD Levels

If we took EOD closing basis one lakh capital appreciated by only 3307.

For maximum system Draw down was -39260

Equity curve also not suggesting any good pattern.

Moreover winning % is Just 22%. So we cannot say it is a Great system

A simple MA crossover can give better results.

Conclusion

The Purpose this article is to give a warning to traders who are seeking EOD SR System.
Many Commercial EOD Trading system considers closing basis only but showing performance they say
they have entered in Intraday Level. if it was false crossover they simple say this EOD system so at stop
loss Purely on closing basis only. Most of traders see the false performance and follow the system and
lose the money. Whenever failure happens they blames them self as it was only because of their fault.

I dont want mention any name of the vendor but they are marketing the software saying that their
system 100% Percent fool proof and any trader and office going people can make money regularly by
spending just 5 Minutes per day.

I think this article at least helpful for a trader who are Planning to buy a trading system