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BOOK YOUR FREE STRATEGY SESSION NOW >>In this video, we dive into two strategies for trading Coffee, a soft commodity that thrives on trend-following techniques.
Both strategies use the Donchian Channel to manage entries. One is an intraday strategy, closing positions by the end of the day, while the other spans multiple days, holding positions longer.
Together, they've racked up over $26,000 in gains this year alone.
Curious to learn more?
Watch the video now and discover:
-How the two strategies work
-Detailed performance insights
-Handy tips for trading Coffee futures
-An often-overlooked metric that’s crucial for evaluating strategy performance
Enjoy watching! 😎
Introduction
Hello and welcome to this new video where, as usual, we’ll dive into a couple of our portfolio strategies that have performed very well recently.
Today, we’re specifically talking about coffee futures traded on the ICE exchange, a market we’ve covered before.
This time, we’ll introduce two new strategies: one intraday and the other multiday.
Coffee futures are intriguing because they allow for the creation of effective trend-following systems that aren't overly complex. However, there's still no micro contract available, it’s more suitable for traders with a medium to large capital.
With that said, I’m one of the coaches at the Unger Academy, and let’s start with the first system analysis.
Intraday Strategy
This is an intraday strategy, meaning each position will close by the end of the trading session.
It operates on a 5-minute timeframe, with entry levels calculated using a n-period Donchian channel.
Trades are filtered using our pattern libraries and include risk management measures such as a monetary stop loss set at $1,700 and a take profit at $1,900.
Looking at the metrics, the equity line is impressively stable.
It has generated about $242,000 in net profit since 2010, with a maximum drawdown of around $10,000.
The average trade is $184 spread across 1,315 trades, which is quite good for an intraday strategy, especially given the instrument’s pretty large tick value of $18.75.
I’d also like to highlight a less commonly discussed metric, the time analysis, which measures how long our system stays in the market.
In this case, the percentage is very low at 6.57%, which has the great advantage of lowering the risk by keeping trades open for only a short duration.
Multiday Strategy
Now, let's move to the multiday strategy. This uses an n-period Donchian Channel for entry levels.
However, this strategy keeps positions open beyond the end of the trading day. If the trend continues, the position is kept open until it reaches the profit target, while if it changes its direction, it is kept open until it reaches the stop loss or the breakeven stop.
Evaluating its performance, this system has produced around $197,000 since 2010, with a maximum drawdown near $29,000.
As you can see, the equity line of this strategy is less regular than that of the intraday strategy.
Moreover, drawdowns are deeper due to a tight stop loss of $1,100 and a wide take profit of $11,000, leading in a relatively low profitability percentage of around 35%, which is typical for trend-following strategies.
The average trade here is higher, at around $262.
Looking at the net profit distribution over the years, we see some excellent years and some less favorable ones.
In recent years, the strategy has performed very well, including 2024, with a net profit of over $19,000.
Conclusion
Today, we’ve reviewed two very interesting systems that have performed excellently this year.
So we’ll monitor them to see if they’ll continue to perform well for the rest of 2024.
And that’s it for today! For more information, please click on the link in the description.
From there you can watch a video by Andrea Unger, get our best-selling book "The Unger Method" by covering the shipping costs, or book a free call with a team member.
Thank you very much, and I’ll see you in the next video.
We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.
BOOK YOUR FREE STRATEGY SESSION NOW >>Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.
I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems.
In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.
Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.
Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.
