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2005 Year in Review: Compass returns as Top Performer!

January 3, 2006

 

Day Trading Systems: (listed alphabetically)

AG Xtreme: www.agxtreme.com

Like many other Daytrading SP systems, AG Xtreme thrives during volatile market conditions and struggles when trading ranges are range bound. AG started out hot in 2005 with positive returns in 5 out of the first 6 months of trading, placing itself amongst the top of most performance lists. However, as volatility began to dry up during the summer months the system began to struggle and had significant losses in July and August. The system's troubles in the summer months were enough for most investors to take AG out of their day trading portfolio and replace with models that are less dependent on market volatility.

Despite this system's struggles Attain still believes AG Xtreme is an intriguing investment option in 2006 for those who specialize in market timing, or for those who want to expand their day trading portfolios during historically volatile time periods. Undoubtedly historically less volatile time periods like the summer and holiday months should be avoided.

Blue Wave Zones: www.bluewavetrading.com

What a difference a year makes! After Blue Wave Zones posted very impressive returns in 2004, actually taking the honors as the best performing system at Attain last year, the system hit a brick wall in 2005, suffering a steep drawdown which eventually led to Attain recommending all clients stop trading the system when it had reached Max DD levels of about 70%.

For those wondering what happened to Blue Wave Zones, the biggest issue in our opinion was the firm belief of the developer that the system should be constantly updated to reflect current market conditions. The reasons behind this are to allow the system to adapt to different conditions like choppy markets, breakout markets, or just a tight trading range.

While the constant changes sound good and appealed to many investors, that was probably the cause of the system's collapse. As most of us know , trying to gauge what type of market we are in is about as impossible as predicting the weather (that's why we're trading systems in the first place). Market conditions can change on a daily basis, so there is not telling what tomorrow will bring.

This is why Attain is very careful with upgrades to systems and we will always take a good hard look at them, comparing the old version with the new, and letting our clients and investors know the differences and any red flags. Things to be wary of include a former losing month in real time now showing as a positive month in the new version's backtesting. Although the intentions are very good, the results are more often than not poor.

We will continue to monitor any new systems from Blue Wave and think there is quite a bit of potential there in terms of the developer's ideas and theories about the market. But at this point, we are not trading any of the Blue Wave systems because of the constant adjustments and systems eclipsing their stop trade points. We hope that changes and we can see another great year of trading like 2004, but we will just have to be patient and wait to see what comes out of the Blue Wave stable next.

Clipper eRL: www.marinertrading.com

After a promising start in 2004, Mariner Futures' Clipper eRL system became a big disappointment in 2005 despite Mariner's Compass system shooting up to new equity highs. Clipper's problems stemmed mainly from its reversal logic, as some whipsaw conditions in the Russell market in the 3rd and 4th quarters of 2005 caused the system to often lose on both the long and short side in the same day, which basically doubled the size of expected losses.

Another issue to consider is that the Russell 2000 market made new all time highs in 2005, meaning the same percentage move became bigger in terms of dollars, where the same loss equal to 0.50% of the index was now equal to a much higher dollar loss than in the backtesting when the index was only 3/4 of what it is today. Because the initial capital is a set number of $10,000 - the larger losses due to the index being worth more translate into bigger percentage losses than would be expected from the backtesting.

With Clipper hovering right around its stop trade point while Compass has hit new highs - the Mariner developer is leaning towards introducing Compass eRL, which would be the exact same code in the Compass system merely applied to the Russell chart. Given Clipper's struggles and Compass' long term success - we will be recommending Compass eRL in place of Clipper and trading it ourselves upon release.

Compass: www.marinertrading.com

The most impressive track record among trading system investments continued in 2005, as the Compass system completed its 70th month of actual trading. That's just two months shy of 6 full years of actual trading in actual client accounts, having been released and tracked since March of 2000.

While some investors we're questioning Compass after it posted it's first losing year since release in 2004, we were telling anyone who would listen what a great time to get started that was - saying "getting involved with Compass after a losing year represents a great opportunity." in this same newsletter one year ago.

Well, we continue to be very high on Compass and actually gained a new found respect for the system with its performance in 2005 amidst several other day trading systems struggles (R-Mesa, Daybreaker) as trading conditions were less than ideal for day traders with volatility remaining at historically low levels.

In plain and simple terms - we believe Compass should be in every trading system investor's portfolio of systems, and view any losing day, month, or quarter as excellent opportunities to start trading the program. Some investors feel the system will get too popular, but there are still a relatively small number of contracts traded on the system (less than Blue Wave Zones or Helix at their peaks last year) due to its being available only through Attain as of Jan 1, 2006 and due to its drawdown and losing year in 2004.

We continue to recommend Compass to all all of our clients, whether you are new to trading systems or currently trading a portfolio of CTAs and/or systems. The track record really speaks for itself and we think our clients will continue to enjoy Compass for many years to come!

Day Breaker: www.traderassist.com

Creative Breakthrough, Inc., the developer of the Day Breaker family of systems, recognized the consistent downward trend and negative returns for Day Breaker SP in 2005 and is currently working on an upgraded version call DayBreaker Pro.

It is high time in Attain's opinion, as the system experienced few peaks and many valleys over the past year. The system lost money in 8 of 12 months in 2005, and in two of the positive months it made less than 1% on the recommended initial capital of $30,000. October, a very profitable month for other day trading systems, was the backbreaker for Day Breaker SP as it lost -18.4% in that month alone.

These figures were not the result of poor execution, either, as the hypothetical returns for the system for the year were actually worse than those seen in realtime. The system in its current form has reached its statistical threshold for risk and investors should seriously consider re-evaluating it as a component of any portfolio, at least until the developer rolls out a new version.

Helix: www.foundertrading.com

The once high flying Helix system has become little more than a whimper after heavy losses in 2005. Helix is considered the most aggressive strategy traded at Attain, and trading up to 3 times per day does not leave much room for error.

Unfortunately for Helix traders the low volatility of 2005 and aggressive behavior resulted in a down year. Looking ahead, should we see a return to higher volatility periods yielding larger daily market ranges we could expect to see some of the large winning months that made Helix famous. But until then the high trade frequency is something that will continue to plague the strategy.

Impetus eRL: www.tradingvisions.com

Impetus eRL, another system in the stable of the prolific TradingVisions Systems, could not find traction to the upside in 2005 after a very rough start to the year. High volatility in January left Impetus cold as it lost -17.3% for the month after costs and commissions based on its $10,000 recommended initial capital. The downward trend continued through the rest of the 1st quarter, albeit at a slower pace, and at the end of the quarter the system was down -27.3%. The rest of the year it was consistent, churning out a relatively high percentage of winning trades but managing only a 1.4% return over the final 3 quarters.

Impetus eRL does best in periods of low volatility but this is a double edged sword, as it trades less often during these times. Given the track record of TradingVisions' other systems, and our stance at Attain of patience while systems revert to their means, we believe Impetus eRL will eventually find its way out of the trading doldrums in which it spent 2005, making it an excellent opportunity for 2006.

Magnitude ES: www.foundertrading.com

Along with Helix ES and Cipher ES, Magnitude ES is one of the remaining remnants of Founder systems that took the industry by storm in 2004. Like it's sister systems, Magnitude ES biggest criticism is its penchant for being overly aggressive, as it will trade multiple times per day and nearly every day in an attempt to squeeze every possible penny out of the market.

While this strategy back tests well and has had flashes of brilliance, the high number of trades the system takes has ultimately led to its demise. The combination of high system lease fees and high commissions due to the large number of trades eroded any positive performance the system had in 2005. For some investors Magnitude ES is worth a look on a market timing basis in 2006, however most investors are better off passing on this system.

Nautilus ES: www.marinertrading.com

Nautilus ES was developed by Jack Telford of Mariner Trading Systems who is better known as the author of the highly successful Compass SP system. In this offering Mr. Telford mixes some original Compass code with the new offering that attempts to catch day long market trends rather than the afternoon trends Compass investors are accustomed to. Compass won't trade before 10:30 AM CST, while Nautilus can go at any time after the market open.

Even though the system struggled throughout 2005, Nautilus ES is still worthy of a look by investors who are looking to expand their day trading portfolios. First, all one has to do is look at the Compass SP system to notice that one down year of performance doesn't necessarily mean a strategy is broken. In fact those investors that took a chance on Compass in late 2004 are thanking their lucky stars that they pulled the trigger. Second, like many other day trading systems the lack luster market conditions played a role in Nautilus' struggles in 2005.

Because the system looks to capitalize on day long trends market volatility plays a bigger role in the success of this system than it does with Compass. A closer look at the developer's recommendations shows that the small $10,000 minimum account size makes its losses seem much greater on a percentage basis than they actually are in dollar terms. Our recommendation is for investors to watch this system in early 2006 and if performance picks up Nautilus ES is worth a chance.

R-Mesa 5: www.mesa-systems.com

2005 was just simply not the year for R-Mesa 5. After posting its third consecutive year of profits in actual trading last year, the system was unable to capitalize on the low volatility that persisted in the stock index markets last year. R-Mesa is a breakout entry system with a counter trend reversal strategy and performs best when markets open at the bottom (or top) of the day's range and close near the top (or bottom) of the range. The systems best trade and ideal scenario occurred on October 19th when the S&P futures climbed 26 points off their lows to aid R-Mesa in making +$5441 per contract. If the market can see just one such move every month, R-Mesa should go right back to its winning ways and erase the -59.6% drawdown its currently in.

With three straight winning year followed by a losing one, R-Mesa is looking eerily similar to Compass at this time last year, meaning you can get involved with a time tested system at bargain basement levels. For any contrarians out there who didn't pull the trigger on Compass after its losing year, R-Mesa has an excellent chance of a mirror performance in 2006.

In addition R-Mesa 5, we began trading R-Mesa on the Russell 2000 futures in August of last year, but found the intraday eRL market unattractive to its style so far. The eRL closed out the year down -$8,370 per contract which is just $2,306 from our recommended stop trade point, which again represents a great contrarian starting point similar to Compass last year.

RC Success ES: www.rc3200.com

RC Success started off '05 red hot, posting gains of 32.3 % through the end of May and moving up the lists as one of Attain's top rated systems. But the system have all those profits back and then some through the rest of the year. For the year, the system was down -7.6% and suffered a new max DD of -44.6% towards the end of the year in mid-December. Many investors are curious as to what fundamentally changed in the second half of the year to make the system less effective, and while there may not be a "silver bullet" answer - you can look at other systems that work off a combination of trend and counter trend logic and find that they had the same struggles.

In the end, we believe that the RC Success has sound logic that should rebound from what has been a tough year for the system. Attain trades the original version of the system, which we view as the cleanest and most pure form of the system. Additionally, we have applied the logic to other markets and seen the system test well across several index markets, telling us there is a robust logic behind the system which should show through as investor profits moving forward.

RC Miracles: www.rc3200.com

RC Miracles was developed in hopes of being a fusion of several different strategies from developer Rickey Cheung. The system looked very promising in the initial back testing but lost nearly 100% based on the developer's recommended balance of $10K in 2005, forcing Attain to issue a "stop trade" alert on the system around the down -75% mark. You can see the results listed under systems no longer traded on the website.

The added reversal logic that is not a part of RC Success took away from the system as opposed to adding to the bottom line. The system would often get caught on the wrong side of the trade and position itself to reverse near the money management stops and usually would take a loss on both the original trade and the reversal trade. A positive aspect of the RC systems is minimal slippage since all strategies are run on the specific contract that is traded. This makes trading electronically for the emini contracts very efficient and we have seen fills prices usually off by one tick at most (equal to the spread of the bid/ask).

Spectrum: www.tradingvisions.com

The Spectrum system is one of TradingVisions "Legacy" systems that was introduced several years ago for higher-volatility markets, and it was on its way to a very good 2005 before suffering one very bad trade in November. January and September were both very positive months for the SP and eRL versions of the system, but disastrous trades on November 10th for each system wiped out all the gains made for the year up to that point.

It must be pointed out that the Spectrum system behaves this way by design -- that is, it uses very wide stops and requires a high percentage of winning trades precisely because its risk is so high. In the high volatility periods it was designed for, it identifies trends and then tries to enter on the reversal of that trend, hence the need for the wide stop, in case the reversal is not timed perfectly. At times however, such as last month, it can be fooled into seeing trend reversals that are not there and its high risk parameters can lead to large losses.

Swing Trading Systems:(listed alphabetically)

AG Mechwarrior ES: www.agxtreme.com

AG Mechwarrior ES from Andrew Gibbs is the sister system of the AG Xtreme SP day trading systems. Using some of the same principles used in Xtreme Mr. Gibbs has molded his latest offering into a viable and unique swing trading option. Labeled a swing trader because it holds positions overnight Mechwarrior ES is actually more like a day trader that holds positions for 2 -3 days as it rarely reverses its position. Mechwarrior ES also finds most of its success during times of increased market volatility, however unlike Xtreme this system can also succeed during calmer market conditions as well. Traded exclusively during the fourth quarter of 2005 Mechwarrior hovered around the breakeven mark and investors expect that this system will pick up its performance early in 2006.

Axiom Index: www.tradingvisions.com

This second year swing trading system has earned the highest accolades for its stellar return profile in the e-mini Mid Cap Market. Since inception, the Axiom Index eMD system has returned 81% after commissions and system lease fees with 30.8% of the gains coming in 2005.

In order to provide investors with a diversified portfolio, Axiom Index is designed to trade across the four main US stock index markets (ES, NQ, eRL and eMD). But in spite of the system's stellar performance in the eMD and small gains in the NQ, many investors were left even or down on the year because of losses in the ES and eRL markets.

Why the losses in the last two markets? Well,. the system performs best during mini 3 to 7 day trends, such as those seen during October as the market sold off sharply and November when it rallied sharply. But beyond those two moves, there was little action amongst US stock indices in 2005, with the major indices finishing the year near unchanged. The exception to that was the eMD Index which advanced over 9% on the year. What will be next year’s big mover? If history does repeat, the best performing market with the Axiom Index program should provide us with an indication by years end.

Axiom CL: www.tradingvisions.com

The sign of a robust trading system is one that performs well in any market and across many different time frames without adjusting the original system parameters. Axiom CL 90 and 135 are products of this school of thought. Both were introduced mid summer as a lowly correlated complement to investors long term trend following portfolio with the goal of capitalizing on the shorter term swings of the Crude market using intraday data as opposed to end of day only.

Unfortunately the timing for adding the strategy was poor as the 2 year long uptrend in the Crude came to an abrupt halt, and was then followed by several months of undefined daily and weekly trends. In the hypothetical backtesting, CL 90 made a new equity high in August after hitting several 10k profit targets during the mid summer rally; however since then the strategy has slid into a ~-$13k drawdown.

Swing trading Crude Oil still holds a lot of promise, and we expect the shorter term Axiom 90 to do well in 2006 as volatility in the energy markets is bound to persist into the foreseeable future. It is an interesting diversification tool for those seeking some exposure to the energy markets.

Bounce MDRL Day Trade / Bounce MDRL Swing Trade: www.trademaid.info

The Bounce MDRL (e-mini Midcap and e-mini Russell) series comes from time tested developer Peter Zwag, who resides Down Under and has written a variety of publicly available trading systems.

Bounce MDRL is unique strategy as it only takes long trades, avoiding the short side of the market all together. Both systems use the same philosophy for entering trades, which in general is looking for long entry points the day after bid downward moves in the market. In effect the system is looking to catch the markets "bounce".

While the strategy is sound - with several nice trades in 2005 - the system was also been hindered by the lack of movement in the markets for most of the year. There have simply not been enough large downward moves to help trigger this strategy into the market. In effect these systems were dormant for long periods of time, which helps prevent losses, but is not much consolation to investors who are paying monthly lease fees. Like other Day trading and Swing trading systems Bounce will succeed in '06 if market volatility increases, and especially if we see an extended sell off back towards the 2003 lows.

Delphi eMD - Delphi eRL – www.tradingvisions.com

The Delphi system by TradingVisions systems was released in October of last year and was the result of continued work by developer Lincoln Fiske done after the release of Axiom. While it contains a good deal of separate logic, it does hare some logic as well, and in many ways represents a more aggressive version of Axiom.

The system started out red hot, but then went ice cold. As with any investment timing is everything. Delphi eRL and eMD started out their Attain career in October and appeared to be unstoppable. In their first 2 months of trading both strategies were on pace to average close to 75% return per year with the eMD up over 32% and the eRL up over 25%.

But then came December and the system went ice cold. December’s light volume and low volatility trading was less than ideal for the system’s 15 minute time frame. Although Delphi is designed to adapt to changing market conditions the lack of any identifiable trends resulted in the market erasing all of the prior 2 months gains for the system. Looking ahead into 2006 we fully expect to see the system bounce back to its winning ways along with the typical volatility and trends associated with the first half of the New Year.

Jaws Narrowneck Bonds: www.jawstrading.com

As far as bond systems go, Jaws Narrowneck finished strong with gains of 3.76% (based on 50k) in December resulting in gains of $2,750 for the year trading a combination of 3 bond strategies. Through the end of 2005 the developer was recommending trading the strategy with 2 US daily contracts, 1 US 240, and 1 US 60. To date and since inception the 240, which is the counter trend component of the strategy, has been the weakest link and has since hit its maximum tolerance point. As a result of the lagging performance he is now recommending dropping the 240. The new initial capital requirement to trade the strategy is 35k.

Investors who are interested in a short term bond component to their trading should consider Jaws and its 3 year live track record, which is much improved with the removal of the counter-trend component.

Mesa Bonds & Notes: www.mesa-systems.com

While 2004 saw Mesa Bonds down and Mesa Notes up, 2005 was the exact opposite, with Mesa Bonds seeing gains while Mesa Notes ended in the red. As a combined portfolio, however, the systems posted their second straight year of gains, finishing the year up about 5.5%. As individual systems, Mesa Bonds led the way with 19.6% where the Mesa Notes was down about 9%.

Despite the gains, however, the systems left us wanting a bit more at the end of the year, as both systems resembled more of a buy and hold strategy in 2005 than a swing trading system. Both systems stubbornly held long throughout the big bond sell off at the start of the fall, and in fact continue to hold long today. We approached developer John Ehlers with these concerns at the end of the year, and the result was an update to Mesa Notes which we are currently testing and reviewing.

Please call or email if interested in the performance of the new version of Mesa Notes.

Seasonal ST: www.theseustrading.com

The Seasonal ST system from Theseus Trading is the first ever seasonal based system traded at Attain Capital. Often regarded as a bit more fundamental than technical strategies, seasonal trading is sometimes looked at skeptically by system investors. But, if system trading is simply following a set of trading rules to the letter, whether those rules are technically based or based on the seasons and days of the year shouldn't really matter, should it.

Theseus Trading has set out to prove that it should not matter in the least with their first system, Seasonal ST. Submitted to Attain in early 2005, Seasonal ST went through a six month testing process that included both back and forward testing. After posting impressive returns throughout the first 3 quarters of the year Seasonal ST took it's first live trade in late October for profits of +$595.00 per contract. The system followed that trade up with a series of winning trades in November and December that allowed it to post gains and finish the year in the black.

Looking ahead to 2006, Seasonal ST provides a unique investing option for those investors looking for something other than another run of the mill swing trading system. And because this strategy focuses on seasonal indicators rather than moving averages or Bollinger Bands, this strategy should be lowly correlated to any of the technical indicator based systems in your portfolio. In addition to the e-mini SP this system can also be traded on the e-mini Nasdaq, e-mini Russell, and e-mini Midcap indices.

Tzar: www.alfaranda.com

After posting steady gains last year, Tzar struggled in 2006 with losses in 3 out of the 4 markets traded at Attain. All of the markets traded performed poorly in the third quarter only to finally get back into the "swing" of things late in the year. For the year, Tzar eRL was the best performer, posting gains of 4.1 % while the ES, NQ and eMD lost -10.9 %, - 16.7 % and -32.4 % respectively. The system can be defined as counter-trend by nature, but every so often it will enter in line with a dominant trend.

It was the counter-trend logic that left the system taking loss after loss in 2005. In short, if the market was trading in a consolidated range for a long period of time and then made a sharp move in either direction the system would sell the strength (or buy the weakness) assuming that the markets will be drawn back to the mean. Unfortunately, there were several trends that developed and followed through which wreaked havoc on the system since it usually has fairly wide stops in comparison with other swing systems.

On a positive note, Tzar has been a great hedge for customers trading other intraday swing systems such as Axiom or Eclipse. As these systems would jump in line with the trend, Tzar would often reverse its position and go against the trend giving the customer a hedged position and minimizing portfolio drawdowns. Another thing we like about the system is its robust nature-the system is not optimized and can be effectively traded on almost any commodity market without any adjustments.

After performing "ok" in less than stellar market conditions last year, we think Tzar is poised for a breakout year in 2006.

Long Term, Trend Following Systems: (listed alphabetically)

Aberration: www.trade-system.com

2005 saw some very trying times for the venerable Aberration trading system, but traders with the intestinal fortitude to stay with the system were rewarded with good news late in the year. Spring and summer saw one losing trade after another, culminating with sizable losses in Cotton and Palladium in July and August. Attain's Aberration Index, which tracks the performance of the system across the accounts of all of our customers trading the system, saw a drop in value of nearly 40% in those two months alone and an intra-year max drawdown of nearly 58% was hit in August.

Nearly all trend following systems traded had difficulty during those months, however, and if you guessed that that drawdown represented a perfect opportunity to jump into trend following you would be correct. Autumn brought the return of trending markets and Aberration took advantage by selling grains and buying metals to begin the climb back up to the levels seen a year ago at this time. Note that with trend following systems like Aberration, diversification is the key to profits. Very, very few people could have predicted the run-ups in markets like Gold and the Nikkei this fall, and an investor should "cast a wide net" with Aberration to make sure they are in on the next big trends in 2006.

Andromeda: www.andromedafutures.com

After a strong 2004 that saw Andromeda post its best year on record, the system struggled for most of 2005 right along side most other trend following systems. The system had a very successful year in the metals (Copper, Platinum, Palladium, and Gold) which trended higher for most of the year, and also had a series of profitable trades in the Nikkei futures and Sugar futures, both of which had long sustainable trends as well. However, the system's struggles in the financial and foreign currency markets ultimately sent the system into the red in 2005.

So, what is on Andromeda's horizon in 2006? Well, the good news is that this system has bounced back from down periods in the past to post big gains in the following year. The system's success in 2004 is a great example of this. And the historical averages for trend following CTAs and trading systems would tell us they should return to their average annual gains sooner rather than later. Our recommendation is to stay the course with long term systems like Andromeda. There is a reason why trend followers have been around so long, and that is because they have proven successful over the long term.

Axiom Long Term: www.tradingvisions.com

Axiom Long Term felt the ill affects of the long term trend following markets. Depending on the timing for starting the system, investor results ranged from down to slightly positive on the year. While the system on the whole finished down for the year it had several notable trades that clearly suggest that the system has the potential to live up to its historical performance when the markets are trending.

The most intriguing aspect of the Axiom Long Term is its portfolio construction and inclusion of many different foreign markets. The systems strategy to include a broad set of market components ensures that investors are prepared to capitalize in both US and foreign markets each and every day.

Brix: www.alfaranda.com

After a slow start to the year, Brix latched on to some positions that it would hold for the majority of the year-several of which the system continues to hold heading into '06. The hypothetical results of the program shows inflated profits (and drawdowns) for 2005, but the high risk associated with energy markets such as Crude and Heating Oil kept the majority of our customers from electing those trades, thereby keeping the large drawdown and subsequent profits out of our Brix Index, which averages the performance of all Attain clients trading the system.

Some highly profitable trades for the year include short positions in the Japanese Yen and Swiss Franc as well as short trades in Soybeans and Wheat. Treasuries have also been beneficial to Brix traders with strong trends in both the Ten Year Note and Thirty Year Bond. The system caught the bull run of the early part of the year, the move lower in the third quarter and has sent jumped on long in the various bond markets.

Brix should continue to perform favorably for investors who are patient and who are willing to fight through the drawdowns in pursuit of the "home run" trades that the system has become known for in its three plus years of actual trading at Attain.

Checkmate: www.traderstech.net

All Checkmate did in 2005 was complete its 33rd month of actual trading at Attain, hit new all time equity highs on its way to posting its best annual return since we began tracking it, post the seventh best performance of all systems for the year at Attain, and be one of just three trend following systems to post gains for the year (all three were Traders Tech systems) No wonder developer Dean Hoffman is telling anyone who will listen that his account trading his systems has been doing quite well. The man is telling the truth — and more and more people are paying attention.

Looking deeper into Checkmate's performance in 2005, the system showed a little more volatility than in previous years with some losses in the beginning of the year, but bounced back from the first quarter losses with consistent gains the rest of the year.

The consistency is driven by the system being far more particular about entering into new trades than its trend following counterparts. There were many times over the course of 2005 when the system was not active in any trades while other long term programs had between five and ten positions on. Often when the system was sitting on the sidelines, other programs were getting caught up in choppy conditions and it served to keep the performance steady throughout the year.

The exit strategy could be considered rather aggressive, and the system missed out on some of the gigantic winners that other systems had in markets like Sugar and Nikkei by not giving the trades enough breathing room. With that being said, the system also exited many profitable trades ahead of other systems that eventually lost money on the trades. This "base-hit" approach is contrary to traditional trend following programs which go for the "home run", but Checkmate has outperformed all the rest over the past three years - and demands attention for all those looking to get exposure to a diversified portfolio of commodity markets.

Fusion: www.traderstech.net

While Checkmate was busy doing quite well in a quite bad environment for trend following systems - it wasn't even the best system in Traders Tech developer Dean Hoffman's stable of systems. That honor goes to his Fusion program, which continued to impress in 2005 - its first full year of actual trading. The Fusion Index, which averages the performance of all Attain clients trading the Fusion system on all the different portfolios (including Dean Hoffman's own performance) managed gains of 11.2% with a drawdown of just 2% over the year, giving it the lowest drawdown of all systems at Attain and placing it as the fifth best performing system at Attain, and as mentioned previously, one of just three trend following systems to enjoy gains for the year.

As the name suggests, Fusion is an integration of different programs and ideas from developer Dean Hoffman. In the past, programs that attempt to combine the logic from several successful systems have been disastrous, but this really appears to be a hybrid of the best attributes of the existing systems from Traders Tech and has performed as such. Fusion is very aggressive in entering trades and often will actively trail profitable positions to minimize open trade drawdowns.

Of the four systems by Traders Tech, Fusion has been the top performer and should continue to do well moving forward, as its aggressiveness doesn't require the "classic" classic trends many other trend following systems require to be successful. Some impressive trades from last year included a long Sugar position that it continues to hold since mid-November after closing out a previous long trade and a short Yen position in the third quarter of '05.

Interplay: www.traderstech.net

The third and final profitable trend following system for 2005 was Trader Tech's Interplay system. The Interplay Index averaging all clients trading the system came in just behind Checkmate with gains just of 9.5% and a drawdown of just 4.2%.

Interplay performed very well in markets traded at the London Metals Exchange (LME), and acted as a sort of trend following canary as it was the first system to get into many of the trades that most other long term systems eventually entered into. Given this aggressive nature and propensity for getting into trends a bit earlier, the system did get caught up in several whipsaw trades - especially in the grain markets where a market would make a new high against the main trend, the system would get long and the market would turn around and revert back to the initial trend.

But all in all the system performed quite well, and did especially well when traded in conjunction with Checkmate and Fusion. Several Attain customers are currently trading all of the systems from Traders Tech per specific money management rules used by developer Dean Hoffman to avoid overloading the portfolio with too many positions in one market sector like bonds or currencies.

These money management rules have proven to be as responsible for the superior performance of the TradersTech systems as the system logic itself, and Attain is recommending all clients utilizing the Traders Tech systems incorporate some of the rules into their trading.

SEMA4 Symmetry: www.nextdsystems.com

SEMA4 Symmetry from the SEMA4 Group and head developer John Joseph completed its first full year of trading at Attain in 2005, with less than optimal results. Like most long term trend following systems, this strategy struggled for most of the year - but the system did stage a comeback in the closing months of the year to give investors hope of a turnaround in 2006. Recent long trades in markets like Sugar, Gold, and the Dollar Index have led the late year comeback. Unfortunately, an ill timed long trade in Crude Oil futures nearly wiped out all of these gains in October.

The unique attribute of this strategy is that it is traded on weekly bars compared to the typical daily bars that most long term trend following systems use. SEMA 4 provides a good diversification opportunity for investors who already trading other strategies like Brix, Fusion, Checkmate, or Andromeda as the time frame difference keeps correlation levels low. And if performance picks up in the first quarter of next year SEMA4 Symmetry may prove to be a must have strategy for your portfolio in 2006.

Synergy: www.traderstech.net

Synergy must feel like the runt of the litter after 2005, as it was the only Traders Tech system to not post gains for the year. But in all fairness to Synergy, neither did any of the other traditional trend following programs that use longer time frames for entry and exit. Synergy definitely has more of a long term approach than other systems by Dean Hoffman and that approach caused more losses in the beginning of the year.

With that being said, the system has been active in a few trades such as a long Nikkei trade from early August that have kept the system's losses in check. Several other systems exited long Nikkei positions during a retracement from the highs, but Synergy stuck with its initial stop and cheered on the recent new highs to add to its bottom line. The system is on target to make over $20K on the trade barring any major setbacks.

While Synergy is capable of standing on its own, after seeing the system work in conjunction with the three other TradersTech systems using the developer's money management rules, we are recommending it only be traded in such a portfolio and with the money management rules.

TrendChannel: www.trendchannel.com

The Trend Channel system is no longer being traded at Attain Capital, as a drawdown to start the year and corresponding portfolio switches by the developer to illiquid markets like the e-mini currencies left most customers seeing red flags.

The system was extremely volatile during the early part of the year with the portfolio consisting solely of foreign currencies, Crude Oil, Ten Year Note and the e-mini Nasdaq. When these markets were trending, the system performed optimally but the corresponding drawdown was too much for most customers to handle. The developer feels that this six market portfolio is more than adequate for diversification, but that also means the system's performance is completely dependent on the movements of just 6 markets. (a quick look at the website now shows the system operates on just 4 markets)

Diversification into more markets (you don't have to trade them all at once, but at least run the system on them) would no doubt help the system's performance and long term prospects.

Looking for a system review that wasn't included on this list. We researched and tested hundreds of systems in 2005, and would be happy to share our thoughts on any system you are considering. Call us at (800)311-1145 or email invest@attaincapital.com for a review of any system not listed above - or for more detailed information about the above systems.