Money Management  |  FEB 1996

Evaluating Performance by K.D. Angle

MONEY MANAGEMENT Evaluating Performance When you're taking a look at records of trading systems and money managers for consistent performance, here are some things to look for. By K.D. Angle Knowing what to look for in the performance characteristics of any trading system or management program is vital for anyone interested in the markets. I have been involved in developing trading strategies for the past 15 years, and I have come up with some standards with which to measure performance either in research on historical price data or in real-time application. I began by examining the performance characteristics of top traders, those whom the industry regards as being the best in the field. Many of these trading icons now manage a billion dollars or more. It's not surprising their annualized performance, with these huge levels of equity, have generally been disappointing over the last few years. What I wanted to examine, however, were those initial growth years of over three to four years when they initially earned their reputation. After analyzing the performance of several such traders, I noticed some similar performance characteristics among them.

by K.D. Angle