“DUST In Wind” System

I am now offering a “signals service” for some of my systems that I personally trade. They can be purchased as a subscription here. I am willing to sell the actual methodology of this system as well. The “DUST in Wind” system is simple enough to trade that you don’t need backtesting software to handle any calculations. Contact me here for more information about a flat fee for the system details, or if you have questions.

Requirements for actually trading this system are at the end of this page.

“DUST in Wind” got its name because this was originally developed for the 3x leveraged inverse gold miners ETF called “DUST”. Also, there’s an old rock song called “Dust in the Wind”. This system trades using both DUST and the long version NUGT.

An equity graph, showing the growth of $100,000 since the start of these ETFs at the end of 2010:

$100,000 becomes $2.7 million in hypothetical backtesting over 6.3 years. Pretty good, but that’s just hypothetical.

EXCEPT…I developed this system at the beginning of 2016, and have been trading it live in true out-of-sample testing for a full fifteen months (at the time of this writing).

This is what the live trading period looks like (not accounting for commissions):

This is the sort of system that you really need to stick with for 9-12 months, since depending on where you start, you might end up ‘flat’ or even down for six months or so. My recommendation is to start with a small ‘test’ position size if you’re allergic to volatility. These ETFs (and gold in general) are highly volatile. The results over the longer term however have – so far – been pretty awesome.

For the full nerdy details and stats, read this PDF.

Trading is of course very risky. Most traders lose money. You are responsible for any trades you make, including any losses you incur. I am providing signals for trades I am making myself, so I have actual money at risk. None the less, the future is unknowable, and you might lose money. Trade at your own risk, and don’t come crying to me if things go poorly.

Requirements:

  • If you’re trading a smaller account (or want to experiment with a small position size), consider a zero-commission brokerage.
  • Signals are only sent when they appear, in the evening after the closing bell. When you receive a signal, you will then enter at the next close depending on whether the day is an up or down day (the specifics will be provided after you sign up).
  • The system averages 1.7 trades per month over the long term. However, trades have picked up over the past few years (yay!). For the live trading period, trades average 2.7 per month. There will be additional signals that are not acted upon, because the close for the signal day does not move in the right direction.
  • The only stops are “time stops”. In this particular case, you are only holding for 24 hours (close to close). There are no other exits, and stop-loss exits only hurt returns.  Your protection against too much drawdown is simply that your exposure is for a very short period.