Systematic S&P 500 Compounding
Strategy for Small Accounts

What it does well

• Mechanical. Fixed rules, no discretion, no screen-watching. The model position is recalculated once a day after the close.
• Selective. About 2–5 trades a year, roughly a third of the time in the market. The rest is cash.
• Built for small accounts. MES futures at $5 per index point make the strategy tradable from $10,000 at full size.
• Sizing is part of the rules. Position size comes from a fixed stop distance, not from a gut feeling — and it compounds as capital grows. Run the numbers in the futures position size calculator.
• Fully disclosed. Methodology, parameters and the complete backtest from 1963 are public, and the app lets you re-run every figure yourself.

What it asks of you

• High risk, by design. Leverage of roughly 5–10×. This is not a low-risk ETF alternative.
• One bad stop is expensive. With the default settings a triggered stop costs about 31–61% of the account, depending on how your capital divides into whole contracts — and a wider stop costs more, not less. The Risk Visualizer in the app shows the figure for your own capital and settings. In 63 years of backtest this stop was never reached: it is the backstop, not the exit.
• Deep drawdowns are normal. −27.7% occurred in the backtest. In 1,000 reshuffles of the same trades the median was −21% and the worst 5% reached −35% — the historical order was worse than the median, not better. Reshuffling shows how much depended on sequence; it does not model a future in which the edge weakens.
• A thin sample. 87 trades in 27 years, about 3.3 a year. Every statistic on this page rests on that — a win rate from so few trades carries a wide margin of error.
• The subscription costs real money on a small account. $499 a year is about 5% of a $10,000 account; the monthly plan works out higher. At 3.3 signals a year, judge it against what you expect to trade — not against the backtest.
• You place the orders. The app gives signals, not execution. You need a futures account and you have to act promptly at the next open.
• Patience. Long flat periods are part of the method, not a fault. Few signals means little to do — for months at a time.

What is the AVALONPLUS S&P 500 trading system?

A rule-based S&P 500 futures strategy and Android app that provides end-of-day model position, approximately 2–5 trade signals per year, backtesting and risk tools. It does not execute trades.

Does AVALONPLUS execute trades?

No. It provides analysis and signals only. Traders place orders manually through their own broker.

Which instruments can be used?

The signals are designed for the S&P 500 and are implemented with MES or ES futures. AVALONPLUS recommends futures only. A CFD tracking the index opens at 09:30 New York, so its weekend gap reached −7.5% historically against −3.0% for the future — and it charges daily financing, which a future does not. MES suits accounts of roughly $10k–$100k; above that, ES. Test the difference in the built-in backtester.

What is 50/50 sizing?

50/50 sizes each position on half the account; the other half stays in cash and takes half of every gain. The stop distance is unchanged, so it does not make a stop less likely — it halves what one costs. It costs return: 50/50 roughly halves the compound growth rate - over three years that is about a third of the profit, and over ten years and more the gap widens sharply, because two compounding curves drift apart exponentially. And it needs $24,900 — one contract becomes possible at $14,000, but only from $24,900 did the account survive the worst stretch in the test data — the August 2011 downgrade, which took a full-size account down 68 %. Below that, use full size. This is advice, not a rule: switch when a drawdown hurts in dollars, not when it hurts in percent. Percent feels the same at $10,000 and at $100,000 — dollars do not.

How much starting capital is required?

One MES contract ties up $7,000 at the current index level (7,754) — stop distance plus margin — but the floor is $10,000 with floor with full position sizing. 50/50 sizing needs $24,900: one contract becomes possible at $14,000, but only from $24,900 did the account survive the worst stretch in the test data — the August 2011 downgrade, which took a full-size account down 68 %. Below that, use full size. The published small-account examples use $10,000. Actual broker margin and personal risk limits can require more.

How often does AVALONPLUS trade?

The app updates model position daily after the close, but new entry or exit signals occur only approximately 2–5 times per year.

What does AVALONPLUS cost?

The first 30 days are a free Premium trial. Afterwards you can stay on the Free plan at no cost (no live signals — closed trades only) or subscribe to Premium for live signals and trades — currently $499 per year or $59 per month through Google Play.

Are the published results live or backtested?

The large performance figures are hypothetical backtests. AVALONPLUS began live trading in 2026 and its own live sample is still small. The predecessor AVALON, which uses the same principle, has been traded live since March 2020; AVALONPLUS is its refinement with insights from recent years.

Is AVALONPLUS safer than an ETF?

Not at full size: that mode sizes every position on the whole account and carries substantially higher loss risk than an ETF. With 50/50 sizing the answer is different — in every window tested it produced more return than a buy-and-hold S&P 500 ETF at about a third of the drawdown, because it holds a position only about a third of the time. It is still leveraged futures, still hypothetical backtest results, and you still place the orders yourself.