LottaBits System Test Performance

The LottaBits Systems have been thoroughly back-tested and modeled over 20 years of historical data.  Future results, of course, depend upon many factors, including market conditions, portfolio management, and the continuing performance of the systems.  Thus, although the results below are considered representative, no future performance claims or guarantees of any kind are made or implied.

Refer to the table below for back-tested performance percentages for each system portfolio. The numbers are produced by a model that assumes $100,000 starting capital and no more than 5% of current equity risked on any one trade.  This means that a) not all signals are necessarily traded, and b) available capital may not always be fully deployed.  In later years larger positions are taken in the model, which in practice might have to be diversified or skillfully entered and exited.  The first column shows performance for the LottaBits Whole Market portfolio and the second column shows the LottaBits Optionable portfolio.  Some Limitations of these model results are discussed below.

All performance numbers below are percentages.

(1) Data for 2,500 days by year, ending 10/16/09 (1999 & 2009 are partial years).  Max Drawdown is computed from the last "high water" mark.

Limitations of Back-testing
The later performance numbers (last 6 years or so) are considered to be more representative than the 1999-2009 timeframe for a variety of reasons:

a) Due to stocks splits the selection criteria does not work well on earlier years which are normalized (adjusted) for the splits.
b) The list of stocks selected for trading optionables is this year's list.  Lists from earlier years would have been used for those earlier years.
c) A large number of stocks have been merged, gone private, or gone out of business.  We've observed the disappearance of over 1,500 symbols over the past few years.
d) Large variations can be produced depending on the amount of capital, size of positions entered, leverage, slippage in fills, commissions and other trade-related factors.
e) The trading system limits selections by trading volume.  The model results above have this limitation removed in order to include older data from markets not having today's characteristic volume levels.
f) Results when real cash is at stake often differ from those produced by a model.