Summary
After two years of real-world operation, it is time to assess how SPW has performed and why these results matter to long-term investors. This article explains how SPW behaved compared to a simple buy-and-hold approach, what lessons can be learned, and how it can help investors seeking consistent, moderate-risk returns.
Two years ago, I launched SPW, a simple trading system for the S&P 500, with one goal: to provide transparent, real-world results without overfitting or excessive complexity. In this article, I review SPW’s actual performance since August 2023, compare it with a buy-and-hold approach, and discuss lessons learned and next steps.
Why SPW?
When I created SPW, I wanted a system that was transparent, easy to track, and realistic for long-term investors. Many trading systems online look promising but lack credibility because they:
- Don’t provide a public record of trades
- Show short, non-representative track records
- Use high-leverage derivatives unsuitable for long-term investors
- Rely on excessive parameters or AI “black boxes”
Instead, I built SPW to be:
- Low drawdown – limiting capital loss in tough markets
- Consistent – performing across different market phases
- Simple – with only essential parameters, avoiding overfitting
SPW trades SSO, an ETF that tracks the S&P 500. From the beginning, I documented every trade in a blog so anyone can verify results and draw their own conclusions.
Results Since August 2023
SPW started operating publicly on August 11, 2023. In this period, buy & hold slightly outperformed SPW in total return, but with higher drawdown. Importantly, SPW was invested only 37.6% of the time, showing much better risk-adjusted returns.
| Metric | Buy & Hold | SPW |
|---|---|---|
| Profit/Loss (USD, starting 10,000) | 4,311 | 3,139 |
| % Winning Trades | n/a | 87.5% |
| Max Drawdown (MDD) | 18.9% | 16.0% |
| CAGR | 20.1% | 15.0% |
| Time in Market | 100% | 37.6% |
| Risk-Adjusted Return (CAR/TiM) | 20.1% | 39.8% |
| CAR/MDD | 1.06 | 0.94 |
| RAR/MDD | 1.06 | 2.49 |
SPW closed 8 trades: 7 winners and 1 loser, for a strike rate of 87.5%. The profit ratio (average profit / average loss) reached 4,834%.
Training vs. Real Operation
Performance is broadly in line with training results. In bull markets, SPW tends to show higher win rates and lower drawdowns, while in mixed markets the advantage appears in bear phases (by staying out and re-entering at better prices).
| Metric | Training (2006-2023) | Real (2023-now) |
|---|---|---|
| % Winning Trades | 75% | 87.5% |
| Max Drawdown (MDD) | 22.6% | 16.0% |
| CAGR | 18% | 15.0% |
| Time in Market | 53.9% | 37.6% |
| Risk-Adjusted Return | 33.4% | 39.8% |
| CAR/MDD | 0.8 | 0.94 |
| RAR/MDD | 1.48 | 2.49 |
What’s Next for SPW?
No changes are planned for SPW at this time. However, I’m considering enhancements to improve resilience, such as:
- Using SPW signals to invest simultaneously in USD and EUR to hedge currency risk
- Adjusting capital allocation based on broker returns on idle cash
Key Takeaways
- SPW’s real results match training expectations, showing no signs of overfitting.
- Risk-adjusted performance clearly beats buy & hold, despite slightly lower total return.
- SPW remains simple, transparent, and effective for long-term investors seeking moderate risk and double-digit returns.
You can explore SPW’s full track record and methodology on my blog (https://spwoodpecker.com/wordpress/) , where every trade is logged for full transparency.
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