striker report February, 2020 
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Developer/CTA Interview
Paul Priestley
Diffusion Trading System
Program(s) Developed: John F. Gallwas, Founder of Striker Securities, Inc.
Interview Date: October, 2014
Interviewed by John F. Gallwas, Founder of Striker Securities, Inc.
Priestley Systems developed "The Diffusion Trading System", one of the top performers at Striker in 2013 and 2014. The owner and system developer is a European trader and wishes to remain anonymous. Messages can be forwarded to him by Striker. After majoring in physics at Cambridge and Oxford in England, he has pursued a career in teaching for the past forty years, as well as using computers to trade his personal account. He built his algorithms from scratch for his own trading and has only recently permitted other traders to participate.
John F. Gallwas: Congratulations with Diffusion rate of return of 178.03% a/o September 26th 2014 - does this rate of return since inception at Striker come in line with your expectations?

Developer: Yes, we had a very good patch from December through April as well as some flatter periods. The year as a whole has been slightly better than the back-testing results: in the last ten years, Diffusion made an average of $12000 a year and in the last twelve months around $16000 (gross of costs).

John F. Gallwas: Tell us about Diffusion 3 - why the name? what makes it different?

Developer: Well, I noticed that several clients are trading multiple lots of Diffusion and it occurred to me that a better return-to-risk ratio could be achieved by trading variants of the system, rather than multiple lots of the same thing. So I studied variations of the algorithm and came up with alternative similar - but not identical - systems, which I called Diffusion 2, 3, and 4. Diffusion 3 was the most robust, so I decided to offer that to clients. It takes the same trades as Diffusion about six times out of ten, and then takes some trades which Diffusion does not. The drawdowns have been similar, but only about 50% correlated in time, so someone trading one of each would have seen the same overall growth with a smaller overall drawdown than someone trading two lots of the same system. There may also be a slight difference in slippage as the two trade at slightly different times and there are now over 100 lots of Diffusion being traded.

John F. Gallwas: Your system Vacuum Pump has a rate of return of 43.76% a/o September 26th 2014 - what makes this system unique and drive?

Developer: Vacuum Pump seeks to "vacuum out" a profit from the tendency of the stock index to mean-revert. The mean reversion has some particular features which the system seeks to exploit. Vacuum Pump tends to be in the market for a series of trades alternating short and long as the market zig-zags and then stands back for a while when the algorithm predicts that the mean reversion will be a smaller part of the price movement.

John F. Gallwas: Some of our client are aware of you in our March 2014 interview, but however, tell us again how you became a system developer?

Developer: I first became interested in futures nearly 40 years ago, but it was always a hobby rather than a career. My field is physics and math and I've always been fascinated by the idea of finding patterns in seemingly chaotic data.

John F. Gallwas: Do you need to update your trading systems to keep pace with changing market conditions?

Developer: It can be very tempting to keep re-optimising your systems when they seem to be fitting the live data less well than before, but it can be quite dangerous. I've seen other system-developers keep readjusting and watched the results turn out badly. The problem is that even the best systems have flat or losing periods and, if you rush to change whenever that happens, you end up like the non-system trader whose trading suffers from emotional decisions. I wouldn't say "never", but any adjustments should be made only after a long period of observation and effect rebuilding a system from scratch if it stops working. I've not adjusted the algorithms on any of the systems I trade with Striker.

This interview is for informational purposes only and is not intended to be a solicitation of any kind. Trade only with risk capital. The risk of trading can be substantial and each investor and/or trader must consider whether trading systems are a suitable investment.
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Author, Trading System Developer
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There is a risk of loss in trading. It is the nature of commodity and securities trading that where there is the opportunity for profit, there is also the risk of loss. Commodity trading involves a certain degree of risk, and may not be suitable for all investors. Derivative transactions, including futures, are complex and carry the risk of substantial losses. Past performance is not necessarily indicative of future results. Please read additional risk matters on our web site, It is important you understand all the risks involved with trading, and you should only trade with risk capital. This communication is intended for the sole use of the intended recipient.

About this report The information and links on this website are for informational purposes. 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 Futures Association ("NFA"), the Managed Funds Association ("MFA"), and the National Introducing Broker Association ("NIBA"). Striker is registered with the Commodity Futures Trading Commission ("CFTC"), and was formerly registered with the Securities Exchange Commission ("SEC"). Additionally, Striker is a former member of the Financial Industry Regulatory Authority ("FINRA"), and the Securities Investor Protection Corporation ("SIPC"). FINRA is the largest non-governmental regulator for all securities business in the United States. Please read Striker Disclosure Statement for the additional disclosure.

The trading performance cited throughout our web site is based on actual trading history, unless otherwise noted. The starting account balance is based on the system developer recommendation. Striker tracks actual performance by recording and maintaining each trade ticket for each system generated. The performance information assumes that no additions or withdrawals have been made. The rate of return for all systems disclosed in the Striker Report is cumulative from the day the system actually started trading at Striker. We maintain a "life" track for all 3rd party systems. We do not necessarily base our records on any particular client account. No one particular customer has achieved these results. The percentage returns reflect inclusion of commissions and fees.The actual percentage gains/losses experienced by investors will vary depending on many factors, including, but not limited to: starting account balances, market behavior, the duration and extent of investor participation (whether or not a client takes all signals for a system) in the specified system and money management techniques.

Striker is a revolutionary concept in action: an international, professional team of brokers dedicated to trading only for clients. It bears repeating: unlike most other brokers, Striker does NOT trade futures for itself or any of its employees. This policy has been in place from the start in order to guarantee that our entire focus remains on the interests of our clientele. Striker believes that when brokers are allowed to trade for themselves (or have in-house trading practices) there is a strong potential for conflict of interest, as the broker may place more importance on his own trading activities (or that of his firm's) than on those of his clients. Finally, Striker has no financial ties to system developers, so there no bias or pressure on how we report the actual trading results posted in our client section. This section is designed specifically for Striker's clients, so they may audit their results on a daily, weekly, monthly, or annual basis.