Systematic Compounding
S&P 500 Trading 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.
• Documented in detail. The methodology, assumptions, position-sizing rules and the summary backtest from 1963 are public, and the app lets you re-run every figure yourself.

Requirements and risks

• High risk, by design. Leverage of 1–9× per trade. 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 −37% — 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 26 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. Index CFDs are quoted by individual providers, and their trading hours and financing terms vary. A CFD does not trade through the futures session, so it has to absorb a larger opening gap: historically up to −7.5% against −3.0% for the future. CFDs also charge an explicit daily financing fee; with futures the cost of carry is built into the price instead. 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 reduces returns: 50/50 roughly halves the compound growth rate. Over three years that is about a third of the profit. Over ten years and more the gap grows much wider. And it needs $25,000. One contract becomes possible at $13,900. Only from $25,000 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, only full size is possible — and it carries materially greater risk. This is advice, not a rule: switch when a drawdown hurts in dollars, not when it hurts in percent.

How much starting capital is required?

One MES contract ties up $7,000 at the current index level (7,681) — stop distance plus margin — but the floor with full position sizing is $10,000. 50/50 sizing needs $25,000. One contract becomes possible at $13,900. Only from $25,000 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, only full size is possible — and it carries materially greater risk. 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 keep the Free plan at no cost. It shows closed trades only, no live signals. Premium adds live signals: $499 per year or $59 per month, billed 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. 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.