Replies to post #627 on Rule-Based Trading Systems

[Little Chico]

Rydex

I just began, and closed my first trade with TMG for a 2.54% gain. I'm happy but that isn't enough data to tell you much except that my subscripion price is paid, so long as the rest of the month is good.

Chico

[husk]

Hi Bub; Yes, I am one of those Rydex traders, and a sub to the TMG system. First, as to the signal itself...it has been phenomonal, as can be seen by the record since it has gone public. Second....it is a system designed to trade at next-day-open..obviously a problem for us Rydex users.

I find the 10:30 order time is not usually optimum, because much of the days move has already occurred by that hour. I think one would profit because the signal is so good, but you would also leave a lot on the table.

The Capt provides a preliminary signal for the next day position by 3:30......if the system remains stable, that is the signal for the day. If there is a change, he tries to let us know of the change by 3:45-3:50..so we can still make the 3:55 cutoff for dynamic fund orders.

I have been taking the recommended preliminary position about 3:50, so that I get the eod position change. It has worked pretty well, so far. Of the nine positions recommended by the prelim signal, 8 were profitable when take end of day....the one day that was a loser, there was a late change in the signal, so I was on the wrong side of the signal.....I want to emphasize that the signal at the eod was correct, it was just that the signal was wavering by 3:30, and changed after all the compilations were completed after the market close.

What I should have done was just go to cash in that instance, since the Capt mentioned in the prelim note that it could go either way later.

Hope this helps. Regards.

[flatted3rd]

I just got back in and got caught up on posts. I'm a Rydex Merlin trader, and don't know whether I have much to add over the other fine answers, but here's my perspective.

Rydex funds are available to trade either directly through Rydex or through another broker-dealer. If you trade through another broker dealer, then there's no contest about whether to trade the preliminary signal or the next day, because to my knowledge you can't get the 10:45 morning pricing unless you trade directly with Rydex. In that case, if you trade the next day, the trade will be executed at the end of the day, 1 full trading day later than the signal (sort of like "Next Day Close"). That's just too late, so you have to go with the preliminary signal. As was said elsewhere, wait as long as you can to get as close as possible to the 3:55 cutoff since the prelim sometimes changes (be careful about cutting things too close!), then place it based on the preliminary signal.

If you trade directly with Rydex, then you have a bigger decision to make - go with the preliminary signal and trade End Of Day, or go with the 10:45 pricing the next day. As was already pointed out, so far, the EOD based on the preliminary signal has been an overwhelmingly better choice, but when it wasn't it wasn't in a big way, and the morning pricing was much better. Still overall, I agree with the contention that End Of Day based on the preliminary signal is better. That's because the market will much more likely be "aligned" with the market conditions that generated the signal at 3:55 the day of the signal than it will be 1 hour and 15 minutes into the next trading day. That's why I go with the End Of Day trade based on the preliminary signal.

Besides, if you're trading directly with Rydex, and the preliminary signal is not correct, you can decide to "get aligned" with it at the 10:45 pricing the next day.

Just for completeness, I'll say that the cutoff for the Rydex pricings for the Dynamic funds (2x) are 10:30 to get the 10:45 pricing and 3:55 to get the 4:00 pricing, unless the exchange closes early.

I'll also take this time to let anyone who's lurking and not yet a subscriber know that although I suspect the track record won't quite continue its torrid pace, I suspect excellent performance and have nothing but confidence in TMG's work, and the professionalism of the team, and am glad I'm a subscriber.

flatted3rd