Key Points
- Algorithmic trading strategy
- Simple to trade
- All trades at open
- 0-4 positions, 25% of equity per trade
- Blow-off valve to dodge secular bear markets
- Smaller account sizes can opt to take 2 positions of 50% equity
- Trades from Nasdaq 100: big, liquid & optionable stocks
Data & Metrics
| Compounded Annual Return (CAR) % | 39.08% |
| Maximum Drawdown (MDD) % | -14.7% |
| Winning Trade % | 64.7% |
| Total Trades | 2065 |
| Equity Exposure % | 49.82% |
| Average Trade Profit/Loss % | 0.7% |
| Average Trade Length | 3.54 days |
| Average Trade Win % | 2.8% |
| Average Trade Loss % | -3.16% |
| Maximum Consecutive Wins | 20 |
| Maximum Trade Positions Drawdown | -32.33% |
| Profit Factor (Winners profit / losers loss) | 1.54 |
| Risk-Reward | 0.86 |
| Sharpe Ratio | 1.33 |
More Data & Metrics
Important Data & Metrics
You did not read that first line wrong. The DL’s BlackBoxx has a compounded annual return of nearly 40%! If you started trading the BlackBoxx system in 2000 with 100k, what would your account look like?
Video clip from Quants: The Alchemists of Wall Street by Marjie Meerman
How does the BlackBoxx work?
The DLʼs BlackBoxx system was designed with one goal in mind, to make it easy to make money. Our algo runs over night and tells us what to do. Each morning, these instructions are emailed to our subscribers and when the markets open, you execute the buy and sell orders and make money.
We did not stop there though. To make it even easier, we tapped our existing relationship with Think or Swim (TOS) and we are pleased to make this product available through their autotrade program. All you need to do is subscribe, have an account with TOS, set your allocations and your off making money. In this environment, it is truly an automated way to make money and you have literally turned yourself into a quantitative hedge fund!
What is the difference between BlackBoxx-2 and BlackBoxx-4?
The difference between the two is the number of picks and the capital size required for the system to make you money. The maximum number of open trades in BlackBoxx-2 is two and the maximum number of open trades in BlackBoxx-4 is four.
The DL recommends a minimum of ~3-5k of capital for BlackBoxx-2 and ~7-10k for BlackBoxx-4. We always prefer the upper end of the range, but these are just starting points for you and some have traded the system with less and been successful.
How does BlackBoxx avoid downturns and meltdowns like May 6, 2010?
One way our BlackBoxx system avoids potential draw downs and disasters is through equity exposure. Our algorithm limits exposure to the equity markets when it believes that the markets could be headed down in the near-term. In context of the "meltdown" on 05.06.10, our BlackBoxx algorithm only had 50% equity exposure on that day, which means that we were "half in cash." As the market fell over those couple of sessions, our BlackBoxx was systematically buying extremely oversold stocks. Some of our current subscribers even use BlackBoxx's equity exposure to time short-term moves in the markets. If the system moves into cash, it may be a good time to short some potential stocks or buy some puts!
Since BlackBoxx buys extremely oversold stocks, the system usually does not move down as much as the S&P 500 on down days, but will outperform the S&P 500 considerably on "up" days. When the S&P is "up" for a given session, our BlackBoxx system tends to outperform by 100 bps or more!
"I'm setting up The DL’s BlackBoxx to auto trade. What do I need to know?"
First, make sure you have an account (margin is preferred if the account is not an IRA) with Think or Swim (TD Ameritrade). Since BlackBoxx is long equity only, you CAN auto trade this in your IRA! Auto trading our BlackBoxx product in your IRA allows one to have tax FREE gains! Once you have these things in place it is time to set your capital allocation level.
Here are two examples to make this easier: If I subscribe to BlackBoxx-2 and put 15k into the system to trade, that means I have a buying power of 30k with margin. I will allocate 25% ($7,500) of my total margin buying power of 30k per trade. The additional buffer is set aside for days when the system sells both open positions and gets long 2 new positions.
BlackBoxx-2 & auto trading in your IRA: This does change a bit if you are trading BlackBoxx-2 in your IRA. Since you can not have margin on your IRA account, you will need to have all 30k of the buying power in cash. Once again split this into 4 allocations of 25% ($7,500 per trade). Use this formula of 4 allocations of 25% on any capital level of your IRA account.
If I subscribe to BlackBoxx-4 and put 25k into the system to trade, that means I have a buying power of 50k with margin. I will allocate 12.5% ($6,250) of my total margin buying power of 50k per trade. Again, the additional buffer is set aside for days when the system sells all 4 open positions and gets long 4 new positions.
BlackBoxx-4 & auto trading in your IRA: This does change a bit if you are trading BlackBoxx-4 in your IRA. Since you can not have margin on your IRA account, you will need to have all 50k of the buying power in cash. Once again split this into 8 allocations of 12.5% ($6,250 per trade). Use this formula of 8 allocations of 12.5% on any capital level of your IRA account."
"Do I need to trade BlackBoxx on Think or Swim (TOS)?"
Absolutely not! Trading our BlackBoxx in Think or Swim does, however, make the process 100% automated. If you do not have a TOS account or do not want to auto trade the program, you can still harness the power of our BlackBoxx trading system. Our BlackBoxx trade alerts are sent directly to your email and are also archived on our website. Simply execute the trades on your own at the open. It is that easy to trade BlackBoxx!
Free Trial! Get instant access. No credit card required!
We offer a free trial for those that need to see it to believe it. All you have to do is create an account by clicking here. There's no credit card or personal information required. Once you've created an account you'll be directed to the BlackBoxx Trade Archive. There you can see for yourself why The DL's BlackBoxx is so amazing. Once you're ready, subscribe to BlackBoxx and start autotrading!
