RE: Oil Machine Trade Software Development Update – v4 vs v3.
Today we reverted back to the version 3 software and have abandoned the version 4 software.
The architecture for the version 4 software has too much downside risk (it is too unpredictable in varied market action), even with the possibility of ongoing tweaks (updates). There is no guarantee that we would achieve a state of operation that minimizes downside risk to an appropriate level.
As such we will only be running version 3 going forward and discontinuing version 4 development.
Version 3 provided low downside risk with about 83% ROI in real-world testing lasting just over a month (longer duration trading will determine the exact return). In the first month of testing with v3 there was only one day with draw down and it was about -0.2%.
Version 3 also provides for low risk even in unpredictable markets because its architecture does not allow for accumulation type trade positions within a range (it does not accumulate or hold positions), which version 4 did. Version 3 hits key support and resistance with appropriate size and trails out quickly. It is a precision trade architecture design. The version 4 architecture is more designed for positioning within a range, with order flow of entities it identifies as dominant. The two versions are considerably different structurally.
Version 3 will lose sometimes, but will lose very small at all times because it is not an accumulation architecture. This was proven out in real world testing. We estimate that on average over a number of days that about 1 in 10 trading days v3 will see a draw down on average equal to or less than its average day gains.
In early testing version 1 software ran at about 20% ROI, version 2 at 40% and version 3 at just over 80%. All approximate and all short term testing lasting less than 60 days. The v4 software may have reached the ROI goal of 160%, but the road to that goal is too volatile.
Here forward version 3 of the crude oil machine trade software will run and follow-up updates will provide additional information about the architecture of the decisions the v3 software makes to trade so successfully so that our clients that trade manually can use some of the rule-set for their own trading.
And lastly, to the questions I have received about future considerations for v4, the answer is no. At this juncture we would rather enjoy the fruits of our labor as it has been a near 3 year development process (an expensive one) and at some point we must settle in with what we have, what we know works, and what provides the lowest down-side risk.
V3 at approximately 80% ROI per year is world class software and world class is better than good enough.
Again, thanks for being a part of the journey.
Any questions email us firstname.lastname@example.org.
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Article Topics: crude oil, machine, trading, software, memorandum