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JANUS Models - Overview
Topic Starter
Mon Jul 12, 2021 - 16:44
The JANUS family of long-term models is based on a long-only, equity trend-following trading model that has been used very successfully in a professional investment company for the past 4 years. The goal for the development of the JANUS family was to match Subscribers’ desires for return, risk tolerance and purpose. The risk/return profile in the series ranges from conservative to extremely aggressive, allowing Subscribers to find a model that closely matches their needs.

All models were developed (trained) using US equity data from 4/1991 through 5/2014. Entries and exits of positions were done using Market Orders, except for Stops which required Limit Orders, and all trades were penalized with 0.5% of slippage. Commissions were assessed at 0.02% of the trade. The models were then tested over the period 5/2014 through 7/2021 to ensure that they exhibited similar behaviors, returns, and risk control using the unseen data compared to the training data.

By design, the models limit the effort required by Subscribers to follow model suggestions. The models trade only once a week using Market Orders executed only on Friday morning for 2-3 transactions (on average), with orders placed before the Market Open. Positions, once established, have trailing stops, which are also updated weekly. Total Subscriber time required to implement model suggestions is less than 15 minutes, once a week on Friday. Positions are generally held for 2-4 months (depending on the model). All models hold a maximum of 10 positions. Detailed performance results for each model are published separately.

WealthSignals provides a rather limited set of options for the Recommended Account Size (there are no options between $150,000 and $500,000). I have conducted extensive simulation exercises for all of the models and my recommended account sizes are listed below, but I have used the $500,000 account size to post all of the models.

JANUS 1a – The most conservative model, uses no Margin whatsoever, prioritizes reduced Risk and increased stability of Returns, and is suitable for tax-sheltered accounts. Recommended Account Size is $200,000.

JANUS 2 – This is a slightly more aggressive model than JANUS 1a and increases the emphasis on Return, still emphasizes risk control but with increased variability of returns, uses no Margin whatsoever, and is also suitable for tax-sheltered accounts. Recommended Account Size is $250,000.

JANUS 3 - This is an aggressive model which uses 2:1 Margin, but strongly controls risk and stability of Returns. Recommended Account Size is $300,000.

JANUS 4 – This is the most aggressive model which also uses 2:1 Margin, and increases the emphasis on Return, but with increased variability of returns, but still controls risk. Recommended Account Size is $400,000.

Please Note: These models use data from a high-quality vendor, CSI Data (http://www.csidata.com/). Market data is potentially subject to a variety of sources of both data error and erroneous trades (https://www.investopedia.com/terms/e/erroneous-trade.asp) that happen literally thousands of times a day. Almost all, but not all, of these data anomalies are identified and corrected immediately. Some errors cannot be identified immediately but are usually identified in the next 24 hours. This necessitates CSI to issue corrections to the data they previously distributed. As a result, on rare occasions, the models using these data sometimes require an occasional correction to suggested transactions. Please understand that there is little that I can do to prevent this problem, and I will issue a correction to the model’s previously issued suggestions.
16 RESPONSES
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Tue Jul 13, 2021 - 15:15
Great addition! Looking forward to seeing how these models hold up in WealthSignals out-of-sample testing/trading.
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Topic Starter
Tue Jul 13, 2021 - 15:32
Thanks Cone! Time will tell!!

BTW, can you remove the "JANUS 1" topic which is empty and I have Locked? Thanks!
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Thu Jul 15, 2021 - 02:13
Carova, what's your trading background?
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Topic Starter
Thu Jul 15, 2021 - 07:04
I've been building trading models (equities and futures) for almost 40 years for personal use, 30 years providing them to other traders, 20 years for our own firm (which we sold a couple of years ago). I've been at it a while.

HOWEVER, I suggest that you ignore me and watch the models. That is the real test.
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Topic Starter
Mon Sep 6, 2021 - 19:27
There was a question posed why the recommended account sizes that I suggest were so much larger than those suggested by other authors for their strategies. It is partially due to the current share prices for a number of the stocks which are part of the WealthSignals universe (https://www.wealthsignals.com/symbol-list). An example is SHOP, which currently trades for ~$1550/share. A $25,000 account with a 10% allocation/stock could only buy either 1 or 2 shares. This example is just part of the process which I have used to determine the suitable account size for my models. Yes, a Subscriber could employ a smaller account with the JANUS models, but then might have trouble replicating the real-time results observed here.

I want Subscribers to achieve results in their personal accounts that are essentially identical to the real-time out-of-sample results posted here.
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Topic Starter
Tue Sep 7, 2021 - 09:47
Fractional shares - I just got educated about this! I did not realize how widespread this capability had become, and the number of brokerages who now support it https://www.msn.com/en-us/money/other/best-brokers-for-fractional-share-investing-in-october-2020/ar-BB1agEHL

With this new info, I can confidently recommend significantly smaller size accounts for trading the JANUS models if a Subscriber is using a Broker who offers fractional shares.
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Wed Sep 8, 2021 - 13:47
However, WealthSignals isn't (yet) supporting fractional sizes for subscribers. :(
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Topic Starter
Wed Sep 8, 2021 - 20:54
I realize that, but I do hope that any of my Subscribers can use a calculator to get that result. ;)

Cone, are there any near-term plans for WS now that WL7 is getting close to stable and some more resources might be freed up?
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Wed Sep 8, 2021 - 21:18
Yes, every day is closer, but the resources are never free or freed up. We're still trying to push out a major new feature for the WL7 website... there's work going on that you don't see yet ;) My hope is that we can seriously get back to this in the next couple months.
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Topic Starter
Thu Sep 9, 2021 - 12:06
"My hope is that we can seriously get back to this in the next couple months."

I do hope that is truly the case.
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Topic Starter
Mon Sep 27, 2021 - 19:36
I was asked which models I trade for my own accounts. I use JANUS 2 in my tax-sheltered account and JANUS 3 in my regular long-term trading account, though at 1.5x Margin rather than the full 2x Margin.
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Topic Starter
Sat Oct 16, 2021 - 14:14
For many years my partner and I ran an investment company which managed accounts for a large number of clients, When we sold the company a couple of years ago some of these clients wanted to continue having access to the trading models that we used. The JANUS series of models were partially developed to meet the desires of these clients for self-trading, Since our company would no longer be doing the trades I made a host of modifications to the models to simplify their use for these clients.

Recently a couple of these clients asked if it would be possible to alter the current day for trades from Friday to Monday since it was often inconvenient to submit trades on Thursday night. I have asked all of my legacy clients if this would be a good idea and was surprised by the enthusiastic support for making this change.

As a result of this overwhelming support I plan to change the day trading signals are sent from Thursday night to Sunday night starting on Oct 24 of this year.
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Mon Oct 18, 2021 - 15:31
Sounds good Carova, sounds like you deftly maneuvered your way out of the headaches of managing "other people's money!"
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Topic Starter
Wed Oct 20, 2021 - 12:05
Glitch,

Actually, this arrangement works well for me since I use JANUS 2 & 3 for my personal accounts anyway, so sending the signals to my legacy clients and posting the signals here is not a big issue. Remembering to do it daily, that's the rub! :)

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Thu Oct 21, 2021 - 08:05
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Topic Starter
Fri Oct 22, 2021 - 17:01
Cone, Done!
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