General Aspects of HOST
Here is a general overview of the HOST program, what it is and what is does. The overview is presented in Question and Answer form (Q&A) to allow easier reading and better understanding.

 1.  What is HOST?
 2.  What is a Key Date Seasonal Trade?
 3.  How did you find the KDTs?
 4.  Will the KDT's continue to repeat their historical performance?
 5.  Why do some markets contain more years of history than others?
 6.  Why are some KDT's on HOST less "accurate" than KDT's I've seen published by others?
 7.  Are there other types of seasonal studies?
 8.  Your KDT's list a percentage stop loss for flat positions. Can you explain what this means?
 9.  What if a given exchange will not accept a CLOSE ONLY stop loss?
10.  Why do some trades have a 100% stop loss?
11.  Do stops on the SPREAD KDT's work the same way?
12.  What should I do if a market is closed on the indicated entry or exit date?
13.  Should I ALWAYS get in and out of trades on the indicated entry and exit dates?
14.  Why get out of a winning trade just because the KDT exit date says to do so?
15.  Can I use futures options instead of futures to trade the KDT's?
16.  Why make this information available to the trading public if it's so good?
17.  How long will the trades in this version of HOST be valid?
18.  Is HOST a trading system, a trading method, or a timing method?
19.  Jake, are you concerned that too many people knowing these trades will affect the markets?
20.  How should I enter the HOST spread trades? Can I use market orders?
21.  Since there are so many trades on HOST, how can I find the best ones?
22.  Do some markets work better than others?
23.  What is the Profit/Loss Ratio? How is it computed?
24.  What is "drawdown"?
25.  What is "upswing"?
26.  What is the Daily PF?
27.  How do I begin using HOST?
28.  Can I share my log in and password codes with others?
29.  Contact Information

Q: What is HOST?
A: HOST is a library of over 1,000,000 Key Date Seasonal Trades. You can access the trades in HOST by date, month, market, % of time correct, or by market. Various combinations of searches are possible using HOST's state of the art search features.

Q: What is a Key Date Seasonal Trade?
A: A Key Date Seasonal Trade (KDT) is a futures trade that enters a specific market and contract month on given dates using a specific stop loss. A KDT can occur in a flat position (i.e. a position that is either long or short), or a spread position. HOST contains KDT's in flat positions as well as in spreads.

Q: How did you find the KDT's?
A: In order to find the KDT's for HOST I used a sophisticated computerized search engine that studies literally millions of combinations of entry and exit dates for all of the active U.S. futures markets. The program identified high odds seasonal trades that were then filtered for various additional factors such as accuracy, drawdown, number of losing years in a row, and length of trade.

Back To Top

Q: Will the KDT's continue to repeat their historical performance?
A: Not necessarily. A KDT is not perfect. It merely represents what has happened historically. Therefore it is NOT a guarantee of what will occur in the future. On the other hand, if you believe that history repeats, then you will likely find the KDT's in this program highly useful. Of course, there is no guarantee that any of the KDT's in this program will produce profits, however, it is my well researched opinion that seasonality is valid and that the KDT's are well worth considering in your trading program.

Q: Why do some markets contain more years of history than others?
A: Some markets, such as crude oil and heating oil, have only been trading for a relatively few number of years as futures contracts. Other markets, such as the meats, have been trading as futures contracts since the 1960's. This is why some markets have more history listed in the trades than do others.

Q: Why are some KDT's on HOST less "accurate" than KDT's I've seen
published by others?
A: The simple answer is that some sellers of seasonal information and historical data DO NOT include as many years in their study as I did. At times they base seasonals on as few as seven years of history. This distorts the percentages and gives a false or misleading picture of reality. I have tried to use more years of history than does any other provider of seasonal information. While their studies may seem more accurate, they are, in reality illusions that could cost you dearly.

Still another difference between my seasonals and the work of other seasonal researchers is that I provide a stop loss for every trade. This will lower the percentage of time a trade has been correct, but it will reflect a more realistic picture. If I were to exclude a stop loss from the KDT's I'd have higher percentage accuracy’s. But this would fail to reflect how traders really trade. And it would also distort the risk inherent in futures trading.

Back To Top

Q: Are there other types of seasonal studies?
A: Yes, there are a number of other avenues to conducting seasonal research and to determining seasonals. These include monthly cash seasonals, daily seasonals, weekly seasonals, weekly spread seasonals, as well as intraday seasonals. Information on all of the above can be obtained from my offices.

Q: Your KDT's list a percentage stop loss for flat positions. Can you explain what this means?
A: All flat position KDT's carry a specific stop loss. The stop loss is expressed as a percentage of the price on the day of entry. As an example, consider the following:

You enter a long Dec Gold on the close of trading 8/26/97 at $300. Your indicated stop loss on the KDT printout is 5%. To calculate the stop loss you take 5% of $300. The result is $15. You subtract $15 from $300. You get $285. The stop loss you will use on gold is $285 CLOSE ONLY. (If you do not know what a close only stop loss is, please call the HOST Support Line at 1-800-725-9788).

If you have a short position in gold at the same price then your stop loss would be $300 PLUS the $15, or $315, CLOSE ONLY.

Back To Top

Q: What if a given exchange will not accept a CLOSE ONLY stop loss?
A: The Chicago Board of Trade does not accept such stops. In this case you must either wait until 3 minutes before the close of trading and act accordingly if your stop loss has been penetrated OR you must WAIT until the close of trading and act accordingly on the opening of the next day if your stop loss has been penetrated according to the KDT rules.

Q: Why do some trades have a 100% stop loss?
A: These are trades that, in effect, have no stop loss. To trade then in this way would not be a good idea since you have unlimited risk. However, you can trade many of them with futures options which have a defined risk if you are buying puts or calls.

Q: Do stops on the SPREAD KDT's work the same way?
A: NO! PLEASE NOTE THA THE STOP LOSSES FOR SPREADS ARE CALCULATED DIFFERENTLY THAN THEY ARE ON FLAT POSITIONS. THIS IS VERY IMPORTANT!!!
The stop loss shown for spreads is in POINTS or CENTS. For meat spreads the indicated stop loss is 400 points. For grains the indicated stop loss is 30 cents.

Q: What should I do if a market is closed on the indicated entry or exit date?
A: If a market is closed on the indicated entry or exit date, then enter or exit on the CLOSE of business the next trading day.

Back To Top

Q: Should I ALWAYS get in and out of trades on the indicated entry and
exit dates?
A: This is something you will need to decide for yourself. The KDT's and their histories were derived using the exact dates shown. Hence, the results you will experience by using earlier or later entry or exit will not necessarily reflect the KDT rule as it was historically tested. My suggestion is to use timing indicators as an adjunct to the KDT ideal entry and exit dates. Using a timing indicator to enter or exit KDT's earlier or later may assist you in improving the overall results, however, I do not have solid evidence to support this contention.

Q: Why get out of a winning trade just because the KDT exit date says
to do so?
A: This is a valid and worthwhile question that has two answers. The first is that it makes good sense to ride a profitable trade. For all we know, the trade may continue to make money and getting out too soon may cut the profit short. IF you DO keep the trade beyond the exit date, then MAKE CERTAIN YOU USE A TRAILING STOP loss to protect the profit you may have. KEEP RAISING the trailing stop loss accordingly, as long as your trade continues to make money.

Q: Can I use futures options instead of futures to trade the KDT's?
A: I answer this with a qualified YES. You may do so as long as you avoid deep out of the money options. In fact, the best strategy is to use options that are close to the money or those which have relatively high deltas. (If you are not familiar with the term "delta" as it applies to options, call the HOST Support Line at 1-800-678-5253 for assistance, or ask your broker).

Back To Top

Q: Why make this information available to the trading public if it's so good?
A: This is another valid question. The simple answer is that the information on HOST is only as good as the traders who use it. The information in and of itself is merely a reflection of history. It is only a historical study, but a highly detailed and analytical one at that! If you're a bad trader, one without discipline, then HOST will likely not help you because you will find ways to break the rules that are provided herein. Information is only as valuable as the individual who uses it. When you bought HOST from me, you paid me NOT for the Holy Grail, but for solid historical and statistical research that took thousands of dollars to develop and hundreds of hours to extract. The value of HOST will be a function of how you use it.

Q: How long will the trades in this version of HOST be valid?>
A: If history repeats itself then the trades in this version of HOST should persist over time. In order to validate the trades, however, I plan to release an up to date version of HOST every year. Each edition will update the HOST trades in flat positions and in spreads while also containing information on new markets and, where applicable, new methods for applying the KDT trades and principles.

Q: Is HOST a trading system, a trading method, or a timing method?
A: In actuality HOST can be all or the above or none of the above. In its purest form HOST trades are historical data. They merely indicate what has happened in the past. They DO NOT predict the future. On a broader scale, however, the KDT's in HOST likely reflect intrinsic seasonal moves within circumscribed periods of time in each of the markets. Hence, HOST is somewhat of a fundamental indicator as opposed to a technical indicator. When combined with risk management principles HOST can develop into a trading system or method, but this is up to you.

Back To Top

Q: Jake, are you concerned that too many people knowing these trades will affect the markets?
A: NO. There are over 1,000,000 trades in HOST. The odds of all traders who have the HOST software making all 1,000,000 trades, or the odds of many trades making the same trades on the same day are small. The simple fact of the matter is that most traders do not have the discipline to trade HOST or any other method consistently.

Q: How should I enter the HOST spread trades? Can I use market orders?
A: Many spreads are thinly traded. Using market orders is NOT a good idea. You are best off using limit orders. In other words, please an order at a particular price and attempt to get filled. If you do not get filled then you may "chase" the market a bit. The same holds true for market exit on spreads. Work with your broker in placing such orders. While the procedure here is somewhat more complicated and involved than with flat positions, I think that it will be well worthwhile in terms of your price executions.

Q: Since there are so many trades on HOST, how can I find the best ones?
A: My advice is to not try and find the best ones. Try to find trades with reasonably high percentages and reasonably high profit/loss ratios. Then, from among these, consistently trade a balanced portfolio of several markets. Picking and choosing markets every time is not a good procedure. Most traders seem to pick and choose incorrectly.

Back To Top

Q: Do some markets work better than others?
A: There is no firm answer to this question. This is more a function of time than of market. There are times of the year during which some trades are more likely to be correct than others. You can discover this by working with the HOST sorting features.

Q: What is the Profit/Loss Ratio? How is it computed?
A: the Profit/Loss Ratio (P/L ratio) is a ratio that compares the average winning trade with the average losing trade. A P/L ratio of 1:1 means that the average of all the losing trades is the same as the average of all the winning trades. A P/L ratio of 10:1 means that the average winner will be ten times the size of the average loser. Clearly, a higher P/L ratio is better than a lower P/L ratio. But don't let the P/L ratio be your only guide to finding trades. Historical accuracy and drawdown are important as well.

Q: What is "drawdown"?
A: Drawdown is the maximum successive decrease in equity from an equity peak. In other words, drawdown measures how much cumulative profit declined from a high in total profits. This is important since it will give you an idea of how volatile a KDT has been. Many times the best trades occur AFTER a period of large drawdown.

Q: What is "upswing"?
A: Upswing is a term I coined to describe the opposite of drawdown. It tells us how much a market has moved up in cumulative equity before it turns lower. This is an important figure since it tells us how consistent a KDT has been in the past.

Back To Top

Q: What is the Daily PF?
A: The daily PF is the “daily profit factor”. This figure is only relevant when comparing several trades in SIMILAR MARKETS. In other words, in markets that have the same dollar value per tick. The higher the PF, the more money the trade has made, on average, on a daily basis. PF can help you decide between several trades in the same market that tend to occur at about the same time.

Q: How do I begin using HOST?
A: It’s easy. Now that you have logged in just brows through the different features. Practice is the key to effective use.

Q: Can I share my log in and password codes with others?
A: We ask you NOT to do so for your own good. You paid good money to gain access and the information rightfully belongs to you. We monitor the number of log in’s by each user as well as the length of time users are on line. We reserve the right to ban any user from our site if we feel, for any reason, that passwords are being shared with others who do not have the legal right to access this information.

You can reach me via email at the following address: [email protected]

Truly
Jake Bernstein

Back To Top

Related Websites: MBH Trade-Futures  |  Patterns For Profit  |  Stratadat