As 2025 comes to a close, the Owl Bundle User Group (OBUG) held its year-end meeting with a clear and deliberate focus: Studying and stress-testing Dr. Ken Long’s trading methodology using systematic backtests and market structure analysis in EdgeRater.
OBUG is not a signal room or a trade-calling service. It is a research-driven study group dedicated to:
Understanding why trading systems work
Testing those ideas across full market cycles
And evaluating results using EdgeRater’s institutional-grade backtesting tools
This last meeting of the year — OBUG Meeting #147 — was designed to step back from individual trades and review what the backtest data actually showed across regimes, volatility environments, and capital flows.
2025 in One Sentence: Structure Mattered More Than Direction
One of the strongest conclusions from this year’s research: Markets rewarded traders who aligned with structure — not those who chased direction.
Across bull phases, rate-cut cycles, volatility shocks, and regime transitions, outcomes were driven less by directional forecasts and more by the market state at the time of entry. This insight guided every major study discussed during the year-end meeting:
Weekly market scans
Critical States backtests
Swing Systems development
Portfolio-level robustness analysis
How OBUG Studies Markets (and Why It’s Different)
OBUG does not rely on opinions, narratives, or one-off indicators.
Instead, markets are evaluated weekly using a repeatable, multi-layer framework rooted in Dr. Ken Long’s work:
Macro Regime & Volatility Context
• Stress vs stability
• Risk appetite
• Rates and currency pressure
Global & Cross-Asset Capital Rotation
• Where capital is flowing internationally
• Risk assets vs defensives
• Inflation and commodity behavior
U.S. Sector & Style Leadership
• Cyclicals vs defensives
• Large-cap vs small-cap
• Growth vs value
Institutional Positioning & Execution
• Allocation decisions already made
• Capital still in the process of deployment
At year-end, the structural read was clear: Risk-ON conditions persisted into late 2025, but leadership narrowed and acceleration slowed.
This is not a forecast. It is state awareness, grounded in data.
The Core Framework of 2025: Critical States
A central focus throughout the year — and the centerpiece of the final meeting — was the Critical States Template, derived directly from Dr. Ken Long’s methodology and implemented through EdgeRater scans and backtests.
Critical States reframes trading entirely:
It does not predict outcomes
It identifies conditions where certain outcomes become more probable
Rather than asking: “Is this bullish or bearish?” Critical States asks:
Where is price constrained across short-, medium-, and long-term ranges?
Is volatility normal or abnormal relative to history?
Are pressures aligned across multiple time horizons?
When those constraints align, markets become fragile, unstable, and sensitive to flow — creating asymmetric reward-to-risk opportunities.
The Weather Analogy That Anchors the Framework
One concept revisited throughout 2025 — and emphasized again in the year-end meeting — was the weather analogy:
Low pressure does not guarantee rain
Volatility compression does not guarantee a breakout
But both increase probability.
Even more important: The same weather system produces different outcomes in different locations. Likewise, the same market state does not work on every symbol.
This is why OBUG’s backtests are:
Run only on curated symbol universes
Interpreted at the portfolio level
Evaluated for regime robustness, not single-trade performance
What the EdgeRater Backtests Confirmed (2010–2025)
A major initiative in 2025 was running full-history and regime-slice backtests in EdgeRater, covering environments such as:
2017 low-volatility melt-up
2020 crash
2021–2022 rate-hike cycle
2022 bear market
2023–2024 AI bull market
2024–2025 rate-cut cycle
The data reinforced a critical principle from Dr. Ken Long’s work: No single system needs to work all the time. Instead, OBUG is deliberately building a portfolio of non-overlapping systems, each designed to activate under different structural states.
Several systems demonstrated strong cross-regime robustness, while others benefited from optional regime-based position sizing rather than rule changes. This is systematic research — not optimization theater.
Swing Systems and Critical States: Two Complementary Sleeves
A key clarification reinforced at year-end:
Swing Systems define how to trade (patterns, execution, exits)
Critical States define when conditions are favorable
They are parallel strategy sleeves, not substitutes.
This separation:
Reduces overtrading
Improves expectancy
Encourages patience — one of the most valuable skills in 2025
The Real Takeaway from 2025
If there is one lesson OBUG members carry forward: Successful trading is less about predicting markets — and more about respecting when markets are structurally vulnerable.
By grounding its work in:
Dr. Ken Long’s methodology
EdgeRater-based backtesting
Market structure and regime analysis
Portfolio-level thinking
OBUG continues to train traders to think like risk managers and system architects, not signal chasers.
Looking Ahead to 2026
In the coming year, OBUG’s research focus will expand further into:
Capital-constrained testing
Correlation and drawdown alignment
Multi-factor analysis
Portfolio construction and allocation
JOIN US FOR AN EXCITING YEAR AHEAD
As we move into 2026, OBUG will continue to deepen its research into market structure, regime behavior, and portfolio-level system design, building on Dr. Ken Long’s methodology and our ongoing EdgeRater backtest studies. We invite you to join the Owl Bundle User Group and be part of an exciting new year of focused study, collaboration, and disciplined market research. Enrollment link: HERE
To jump-start your participation in OBUG, the Applied Swing Systems Trading Home Study course provides a fast and practical way to get familiar with the core terminology, concepts, and framework used throughout our weekly sessions.
The Owl Bundle User Group (OBUG) is an educational research community hosted by AbleWayTech. All content is for educational purposes only and does not constitute investment advice.