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The Trading Strategy Con Game and the Importance of Walk-Forward, Third-Party Trade Verification

Released on Thursday, November 2, 2017•STRATEGIES

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This session will highlight, and argue for, the need for public, go-forward testing and transparency for trading strategy developers (and marketers) and tie in with John Netto's strong belief in third-party performance validation. Excel spreadsheets, cherry-picked brokerage statements, and back-testing analysis are not solutions to the problem. They are the problem. Back-testing trading systems using historical data, and optimizing the mathematical parameters used by that system, then touting the results (either to yourself or to others) that you would have achieved, had you known to actually trade the system back when it mattered), are the cause of untold financial loss and mental anguish. The answer is to dismiss hypothetical back-testing as completely worthless, which it is, and call for all traders selling trade signal (alert) services, algorithmic strategies, or any form of software or service aimed at generating trade ideas to commit publicly to the results of a particular trading strategy. Then stand by its results, no matter what happens.

Rod Casilli

tradersdevGROUP, Founder, Lead Futures Trader

Rod Casilli is the founder and lead trader at the tradersdevGROUP (TDG among friends). He has been an active futures trader and automated strategy designer for over 20 years. Mr. Casilli began his career at Merrill Lynch during the tech speculation craze, spent time trading millions of shares of stock as a SOES bandit, and then transitioned to the futures markets in the fall of 1997, corresponding with the release of the S&P Emini contract. Most recently, he was the head of product management at Collective2, the worlds largest automated trading marketplace. Mr. Casilli has a BA in English from the University of California, Los Angeles.