Chuck LeBeau – Design, Test, Evaluate & Implement Systems (Video 959 MB) (traderclub)
Product Description.
Chuck LeBeau – Design, Test, Evaluate & Implement Systems.
A good trading system allows you to test your entries and exits, and make them more objective. Now you can follow an internationally prominent systems expert as he explains, in the course of two days, the ins and out of system development, including indicators, multiple timeframes, and more. You also get to learn trading psychology and money management from Dr. Alexander Elder who joined Chuck LeBeau at this workshop.

Combining RSI and ADX.
Yet again we have managed to talk a top trader into providing a trading lessons for our subscribers. Chuck LeBeau is not only a great trader, he is a recognized authority on trading systems.
by Chuck LeBeau.
Now that I am spending seven hours a day doing trading for the new hedge fund I haven't had much time for research or writing new Bulletins. However a comment in one of the trading newsgroups that I monitor got me thinking about the potential benefits of combining our knowledge of RSI and ADX into a simple system. Both the ADX and RSI are valuable trading tools and a combination of the two would seem to offer some interesting possibilities.
I like to use the RSI primarily as an indicator for buying on dips in an uptrend. The ADX is my primary indicator of trend strength.
Here are a few ideas on how the two indicators might compliment each other in a system that "knows" when to enter on strength and when to buys on dips. (I'm only going to use the long side for examples but the logic should apply to short trades as well.)
When the ADX is rising it usually indicates that a strong trend is underway. In many cases waiting for any sizeable dip would be costly because the market could run away and the dip entry would be too late to maximize our profits. In this case we must enter on strength. To make this idea into a simple trading rule we might state that if the ADX is rising (and we have some indication it is rising because an uptrend is underway) we will buy whenever the RSI is below some very high threshold like 85. This rule would give us a very prompt entry in most cases and the result would be almost identical to simply trading whenever the ADX is rising which seems to be a good idea. The RSI has little, if any, benefit in this situation except it might occasionally keep us from buying into an extremely overbought market where the RSI was above 85. In this case a slight delay on the entry might be prudent.
The 20-bar moving average must be rising. If the ADX is rising (ADX today is 0.20 or more higher than yesterday) then buy if the 14 bar RSI is less than 85.
If the ADX is not rising (ADX today is not 0.20 higher than yesterday) then buy if the 14 bar RSI is less than 50. Here is where you can influence the frequency of trading. For more trades use a higher threshold like 60. For fewer trades use a lower threshold like 40.
If the ADX is not rising (ADX today is not 0.20 higher than yesterday) then sell (long exit) if the 9-bar RSI is greater than 75. If the ADX is rising (ADX today is 0.20 or more higher than yesterday) and the open profit is greater than (pick some amount - maybe 4 ATRs or some unit of price) then sell if the 9-bar RSI is greater than 75. You need some additional exit rule for the losing trades. Use your favorite loss-limiting exit or you might want to exit when the price goes below the 20-dat moving average or when the 20-day moving average turns down. (See entry rule 1.)
by Chuck LeBeau.
Chuck Le Beau's System Traders Club.
Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our disclaimer.
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Chuck lebeau trading systems

System Developer Interview.
Founder of System Traders Club.
Interviewed by John F. Gallwas, Founder of Striker Securities, Inc.- August, 2005.
Chuck LeBeau (66) co-author of “Computer Analysis of the Future Market”, also founded the System Traders Club in 1998, which provides its more than 13,000 members with educational material and guidance relating to the design and testing of trading systems. Mr. LeBeau, recently donated his extensive personal library on trading to the Cornerstone Investors Network (Southern California) reference library before moving from California to Arizona and semi-retirement.
John Gallwas: Now that you are settled in Arizona, with your background and experience as a broker, system vendor, CTA, educator, and author, what areas do you plan to focus on in semi-retirement?
Chuck LeBeau: I’m still unpacking and the new house is keeping me busy. Once I have more time I would like to catch up on my writing. I have two books that have been started and need to be finished. I also need to spend more time working on my TraderClub web site. It’s been neglected and it is badly in need of a makeover. I’m trying to learn some basic web programming so I can maintain the site myself and keep in closer touch with our 13,000 members.
The new house is on the ninth fairway of a nice golf course near Sedona so I also want to spend some time working on my golf game.
John Gallwas: After California State and a tour with the U. S. Army, you started as a broker with E. F. Hutton in 1967. Briefly tell our readers your background and how it lead you to the development of the System Traders Club.
Chuck LeBeau: Well, I got involved in testing systems way back before the there were any personal computers. I was the commodity broker at the E. F. Hutton office in Torrance, California and our office was surrounded by big aerospace corporations like TRW, Northrop, and Hughes. These companies had billion dollar contracts with the government and they all had big main-frame computers that took up several air conditioned rooms and had to be tended 24 hours a day by a staff of computer technicians.
I was fortunate that those computer technicians were my clients and they were allowed to use the computers while they were working. The computer guys would come to me for trading ideas to program and test. I had about six programmers that would test various ideas and then we all would get together on Saturday mornings and discuss the test results. The ideas that we tested were very simple and there weren’t really that many strategies to test at that time. Most of the stuff was basic trend following using moving averages and various types of breakout strategies.
Most of what we tested did not work very well. You might be interested to know that in this early testing work the strategy that produced the best results was something known as Dunnigan’s One-way Formula. It was a simple ABC pattern or “W” pattern that was later promoted extensively by Ken Roberts who made the system very well known under a different name. I know of successful traders who are still using this basic pattern but now it’s referred to as a “fractal” and part of Chaos Theory because there are small “W” patterns within bigger “Ws” within bigger “Ws”. The secret to success seems to be in using the correct time frame to identify the pattern.
As you can see I got started in this system testing and development at a very early stage. This was many years before personal computers and fifteen and twenty years before the introduction of programs like “System Writer” which eventually evolved into TradeStation ™ and the formation of the Systems Trader Club.
Chuck LeBeau: I think that the opening of world trade in the 70s has brought about the biggest change in the agricultural markets. Commodity pricing has always been about forecasting “supply” and “demand”. This trade expansion changed the pricing of commodities from supply driven markets into markets that were priced based on the demand for the commodity. For example the all-time high for Soybeans was $12.90 in July of 1973. Very few traders will recall that this was the largest Soybean crop in history at the time so everyone was betting that the prices would drop and overlooked the importance of the demand created by opening up our markets to world trade. In the new era of world trade rather than focusing on the size of the crops we had to focus on how much China and Russia intended to buy. Forecasting supply is easy –it’s more or less like counting or taking an inventory. But forecasting demand is always much more difficult – we don’t have any way to measure how much of a commodity someone will want. Fortunately for those of us trading during this period the demand-driven markets resulted in much bigger trends so the 70s became the golden era of trend following. Huge fortunes were made on the simplest trend-following systems imaginable. You just had to have the guts to step up and buy the highest prices in history and hold on. It might sound easy but believe me without the advantages of hindsight buying historically high prices was not that easy and holding on was even more difficult.
The second factor that has changed trading over the years was the introduction of financial futures. In my mind the fundamental price forecasting of stock indexes and interest rates is much more complex than forecasting agricultural markets. As the financial futures grew in popularity I think that reliance on technical analysis has replaced much of the previous reliance on old-fashioned fundamental analysis. As technical analysis has become more widely accepted it has lead to the popularity of systems based on computer analysis of technical indicators.
John Gallwas: How can a trading system based on technical data keep pace with these changes in the marketplaces?
Chuck LeBeau: I think that system developers have to work harder on developing systems that can adapt to changing market conditions. We need to use tools like Average True Range (ATR) to set stops and profit targets instead of using a set amount of dollars or a specific number of points. Systems based on ATR can adapt to changes in volatility so that the stop points and profit targets will stay in line with current market conditions and will adapt when those conditions change again.
Even with the use of ATR tools I think we must always be prudent and assume that all systems will eventually fail. We need to do a better job of monitoring our systems and look for signs of failure before we lose too much money. Unfortunately I think that we are still in the dark ages as far as monitoring systems. The industry only seems to recognize failure after we have lost 50% or more, which doesn’t make much sense to me.
John Gallwas: Your many fans who read this interview, will want to know: What’s new with Chuck” and we want to give you the opportunity to respond.
Chuck LeBeau: I am presently working on developing systems that control other systems. Most systems don’t make money at a steady pace. Systems have “hot steaks” and “cold streaks” based on the underlying market conditions. I think that it is possible to objectively quantify the conditions in the market that determine the success or failure of particular systems. The “control system” would look at the big picture and monitor the general market conditions in order to switch the sub-systems “On” or “Off” as the market conditions dictate. If the control system works as intended the sub-systems would be operating only during favorable market environments. With lots of sub-systems being monitored and switched “On” and “Off” appropriately we might be able to make money all the time. Now wouldn’t that be nice!
Thanks for thinking of me as someone worthy of an interview. I don’t know nearly as much about systems as I would like and I’m still trying to learn more - even in my retirement. Fortunately I enjoy the work and the challenge. It’s quite a bit like playing golf.
Disclaimer: The actual trading results for Dean Hoffman's personal account illustrates the four systems: Synergy, Fusion, Checkmate, and Interplay. The record started with Synergy trading a 15 market portfolio of highly liquid commodity contracts risking 2% per trade or a minimum of 1 contract. Later, Checkmate was added, and then in early 2004 Mr. Hoffman started trading Fusion. Finally, in late 2004 Interplay was added. The risk per trade amounts were adjusted as systems were added. The information and links on this website are for informational purposes and not to be construed as an offer to sell or a solicitation or an offer to buy the commodities or any securities herein named. The factual information on this website has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Striker Securities, Inc. ("Striker") or its affiliates. The risk of trading can be substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Striker is a member of the National Association of Securities Dealers (NASD), the Securities Investor Protection Corporation ("SIPC") and the National Futures Association ("NFA"). Please read Striker Disclosure Statement for the additional disclosure.
Securities Exchange Commission (SEC)
Commodity Futures Trading Commission (CFTC)
National Association of Securities Dealers (NASD)
Securities Investors Protection Corporation (SIPC)

Charles Le Beau eBooks Free Download.
Technical Traders Guide to Computer Analysis of the Futures Markets by Charles Le Beau.
This book is very precious and it is easy to read, clear, as well as perfect. It has much precious information on what parameters to employ for every indicator. This vital book fulfills the gap between the essential instruction that comes with software programs and what a trader really needs to be familiar with to increase and text gainful futures trading system. This book includes exact information on how to set up and use computer-generated technical studies of the most well-liked indicators. As well as, it also includes how to construct a trading system tailored to the reader’s exact need and realistic instruction on how to display and study technical information.
In this book, the author gives advice for developing well restricted money management, risk control strategies, and techniques for monitoring a trading system to identify if something has gone wrong before most important losses happen.
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