Transcription

Hi, guys hi from Andrea Unger.

We're in a very tough situation, Coronavirus is spreading all over the world and well we are traders, so we have to talk about trading even though we probably have other concerns but this is what we can do from home.

As here in Italy, today we had recommendations, even regulations to stay at home, obviously, it's something we can address today.

But the question is: how is trading, how is my style of trading, automated trading going these days with this volatility, we these crazy markets?

Obviously, I cannot have a look into all the 200 and more strategies that I have, but I want to let you see some of them, 4, I chose 4 of them, not because they are the best.

I chose 4 because they are...I will explain to you why.

One is on the e-mini S&P, obviously, indexes are the highest concern today because they are falling down as crazy and on this market, I want to show you a strategy that I used in the first contest I won back in 2008.

It's the very same strategy and it did very well back then.

So the question is: it did well when there was high volatility, is volatility today the same as it was over 10 years ago?

It was 12 years ago.

Is the strategy still doing well?

This is a question that we will answer soon.

Another strategy or another market, DAX, European DAX index future as well.

Also, this one was a strategy I was using back in the early contest, and then I took other 2 on 2 markets I was not trading in 2008.

I started the crude oil trading in 2010 and gold, is that the one I will show you, even later.

So these are the strategies which I chose.

Why?

Because crude oil and gold are in this period again markets of high interest.

Why?

Because crude oil we all know what happened, an incredible get down on Monday morning or Sunday night depending on the times all you are, because of one side coronavirus, on the other side the politics problems between Saudi Arabia and Russia and many other things that led to an increase of production and this incredible drop in prices in crude oil, which is also affecting, in addition to coronavirus, all the markets.

And then gold, because gold when things go crazy... is still gold where we go, is still gold where we put our money?

What's happening in gold and how are the strategies we are trading in gold reacting to this?

So I chose 2 strategies which I was using some time ago in a signal service in Germany.

I chose these because these are old strategies, so it's good to see what happened in the past, have a look with me, I will tell you something more on my cloud server.

So guys, here we go.

First strategy: e-miniS&P

This is a chart of the minS&P, and this system, as I said, did very well back in 2008.

You can see some activity here in the old times.

It's very active, very dynamic and the great part of its performance in 2008 was due or thanks to volatility.

To tell the truth, the system comes from an idea from my mentor, Domenico Foti, I have to praise him for this.

I took the idea and elaborated it to what you see today back in 2006 I think, or 2007 or something like that.

In 2008 it got the great results I was telling you about.

So the question is: volatility in 2008, now we have volatility; is the system doing well? Is the system doing well also today in current conditions?

So we can immediately have a look at the equity line first of all.

This equity line is probably not the nicest from a pretty pure aesthetic point of view, but you see that here in the middle it's quite, quite years and no real gains with the system, this is clearly visible here, but when things go crazy we see again the equity line going up.

Here it was 2008, so if we look at the annual performance you see that over $200,000 in 2008 really great year, but lately $23,000 now in 2020 and all of them even more in March, now at the very beginning of March which is interesting if you look at here.

Here we go.

So volatility seems to have helped the system to produce profits, and it did.

The good news is that a very old system leads again, still good performance when the markets go to the conditions, here you see the trades.

This is one of the most complex systems I have, my systems are not very complicated.

You see here it's a real grid of trading which is complicated, but when things go crazy, and this system works on conditions that things are going crazy, the system produces profits.

You need a strong heart and mindset to trade this anyway, because obviously on one side it's tough to trade when markets go crazy, on the other side this system itself has a behavior which is not for relaxed guys in my opinion, and this is something you have to take into account.

But, as said, the good news is that, when performance is needed, this system helps you to gain performance.

Second strategy: DAX

Another system I used in 2008, the model on which this is built, this is DAX future, is this one and we look at the equity line throughout the years.

I told you more than once that DAX lost its effectiveness and in fact, some years ago you see how this system itself, generally DAX was responding bad, but now in the last period, this system came back to produce some profits and if we look at now, we see that anyway in March it lost money.

In March it lost money and the year is still positive, it made money before, here we have losing years as I showed you in the past, the system was in trouble, weak years.

But now, in spite of the spike here, in trouble in the very last period and if you look at the daily, we see, here it is, it's all in March.

All the red days, it traded it lost.

Why?

Because this system enters on trend following on breakout and the volatility of these days led to changes in the direction so that in spite of early profits, it then was stopped out.

We have different cases of this kind, initial positive trades which then were stopped out because of a fixed stop of the system.

So you could argue that trailing stop could be beneficial, take profit, all these things.

Obviously, I've tried all of this, I might show you this, in one of the next videos maybe, you know I'm not a lover of trailing stops, something we can discuss, but the reality is that this system experienced trouble in this changing market conditions.

Third strategy: Crude Oil

If we go further first to energy, crude oil is a market that here you see the big gap which happened after the get down.

This system here, is the system, the gap is here, the system I used in the newsletter for German customers with signals and the system actually did well and then it was a bit stable for a while, lost money, and later came back to see interesting profits in the very last period here.

If we look at the periodical analysis, on a monthly basis, we see any way that it made money in 2020, but it stopped, in March it did not trade.

So actually it was not interested in the big move we saw here, and here again, it captured a nice down move, but it exited at a take profit, this is as a take profit.

So, in this case, somebody would say: "Hey you lost a great opportunity obviously here!"

Okay, so the idea could be: instead of using a take profit, to use a level in correspondence to that.

A theoretical take profit exit, a level.

Once it reached this level you start trailing your exit.

This could be an idea, but if we are honest enough and, again we can analyze this in one of the future videos, but if we are honest enough in this case here where we exited in this take profit, I think it's about $8500 I don't remember exactly now because I have too many the systems.

If you look here, at the situation, we could say: "Okay it reached the level of about 45/50, but it then, if we look at the chart, went up around 48, so actually, sincerely speaking, we would probably have been triggered out in any case.

We have just believed an illusion that we would have been in the trade down to these lower levels, it's just an illusion anyway.

So actually, once you look into these matters using numbers and detailed analysis, you see that the ideas you might have are not always that effective.

Forth strategy: Gold

Gold is the other market which is obviously interesting because everybody thinks about gold as a safe place to invest once things go crazy.

This is one of the strategies I used in that newsletter and in this case, the periodical analysis here, it shows some losses in March, but interesting gains before, so we are slightly positive in 2020, with an equity line which showed a weak period, but lately, this is a weak period when it lost some money, but lately it came back to interesting profits.

So this is a good system in general, but also this system lost money in March.

It's not really due to the volatility, in this case, it's not really due to the way the market moves, it's a normal period of losses.

So it was not really affected by the volatility of the moment.

If we look at these trades here, they are disappointing of course, because they were stopped out, in some cases were, you see, at the limits of the move, but also here, we could play with the levels, that it would be tricky.

So it is nonsense to change the levels whenever we have this kind of thing, these things happen, shit happens somebody said.

So this is just an example of what can happen, which is a point, which is not necessarily related to the overall situation and we have to accept this.

So gold, in this example did not suffer from the volatility.

I can tell you, generally speaking, my systems on gold are many.

Some made huge profits, some made huge losses, I'm overall more or less on breakeven on gold, so as I am on energy futures, which means that systems did a good job because they did not lose the money that investors lost on the stock market, but it would be more or less the same as being flat with less stress.

In conclusion

So the decision, in this case, is: does it make sense to let systems run or is it better to switch them off and stay quiet?

It's a big question which has no answer even in numbers in this case, but the good news is that the systems where a good defense against the losses that we have seen in the market, this is an important part of it.

So this is the situation, obviously, it's not an exhaustive explanation, it's just a pick into what we see and you see everything is automated, then it's nothing about discretional intervention which could be maybe better in this period, I don't know, but I'm an automated trader, so I build trading systems and the question is: how do they behave today in this situation?

Trade systems are what I do, if you want to know something more about trading systems you can register to the link here below, it's completely free, so you will know some more information.

This was sort of detailed in some strategies, but here in the link below, you can find further general information about the world of automated trading which is where I believe.

I hope we will soon discuss more relaxed topics, I hope we will soon be facing a better overall scenario in the world, that everything goes back to normality.

In the meantime, we keep in touch here and we get the next video, next week maybe, here from Andrea Unger.

Ciao see you next time ciao

NEXT UP ON THE BLOG

World Cup Award Ceremony

Interviews

Read More...

---

Robbins-PFGBEST World Cup Trading Championship Awards Presentation at CME Group

Interviews

Read More...

---

On forex markets - Dukascopy

Interviews

Read More...

---