WLK Balanced Portfolio Discussion

What is it ?
The system is a trend following system, which generally means we do not predict the market. We will wait till the market turns, before following it, and wait till the market turns around again before getting out. This also means we will never buy when its lowest and never sell at its highest. The idea is to try and get most of the trend.

This system was created with managing large accounts in mind. The key principle that everything works around is capital preservation.

How does it work?
The system is a mechanical system, which means we know exactly when to get in, when to get out, what to do when it goes up, what to do when it goes down, and most importantly how much to trade. All of this is predetermined before any trades are taken.

There is a strict, conservative money management system in place. Lot sizes are consistent, profits and risk are all accounted for. There is no martingale strategy running in the background.



What are the features and what should you be aware of?
There are long periods of time when the system is not trading. When the markets are unfavourable, the system keeps out of the market. It works like a medium to long term investment, not gambling.

Drawdown is low, below 10%. Even after making over 10,000 pips the system is only up 120+%. Meaning that the account is not heavily leveraged. A random 1500pip black swan spike will not burn the account.

It does makes losses, and that is natural. Nobody can predict the market. Just that the profits outweigh the losses significantly. There is no huge equity drawdown.

The system has been running since sept '11, and is returning profits steadily. There are another 6 months of history behind that, with broker transaction records to back it.



What this system is NOT
It is not a get rich quick scheme. It will not return you 50+% a month. The system has an average return rate of 40-60% a year when back tested over the last 5-7 years.

It is not risk free. When the system starts taking positions, the portfolio has an average exposure of 20-25%.



What does it cost?
Minimum investment : USD10,000
Management fee : 2% / year
Performance fee : 25% based on high watermark. For larger accounts, fees are negotiable.
Broker : IBFX Australia, or your broker with LPOA.

You say that its Manual but your basket of trades were 14 positions all opened within a few minutes. To me if I were to trade longterm with several pairs I'd place the trades at predetermined levels via limits/stop orders just like you stated

'The system is a mechanical system, which means we know exactly when to get in,'

Entering 14 positions with market orders doesn't sound like knowing exactly when to get in unless its trading based on fundamental news releases. Is it?

Either way, Congrats on your progress and your methodology! Please give us some more info.

Thanks for your feedback. Your thoughts and concerns seem genuine, and would help me build my eventual presentation. I'll try my best to address your post here.

I think what you're seeing here are the underlying mechanics. As mentioned it is traded as an investment, and in some ways a basket of instruments. A similar example would be trading an index, where we trade the the index as a whole, not its component instruments. Some of the components will make, some will lose. But the idea is, as an overall, it ends up on the positive end.

What I meant by 'we know exactly to get in' was that there are a certain set of rules. Those rules are simple and straight forward, no subjectivity. When those rules say buy, we buy. When it says sell, we sell. And most importantly, when to stay out.


Do keep your thoughts coming !

Thanks for the many inquiries regarding managed accounts, but unfortunately, as of now, I am unable to _directly_ take on any investors from the US of A. This is because my broker is NFA accredited, and is abiding by their guidelines of not allowing US citizens to have forex / trading accounts overseas (or something along those lines). This is very regrettable.

-LK

'The YELLOW line should always be above the RED line. It means you've cut your losses, and let your winners run.' Lol - could it be so simple? I'll try it.

He's done it once ( Sep - May ) but can he do it again?

I mean yes, because he cut his losses and leave his profits, in long terms he must catch great trends from time to time.