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BOOK YOUR FREE STRATEGY SESSION NOW >>Currency futures are certainly not among the easiest instruments to trade using trading systems due to their notorious low volatility. Nevertheless, it’s possible to find quite effective strategies that can prove helpful for portfolio diversification.
Especially in times of increased volatility in the currency markets, these strategies could provide very interesting results. Examples of this are two systems in our portfolio that trade on the Japanese Yen, namely futures that track the trend in the exchange rate between the Japanese Yen and the US Dollar, which have significantly outperformed in recent months.
By watching the video, you’ll discover:
-How these two strategies are built (one is a reversal strategy and uses Pivot Points, the other is a trend-following strategy and also exploits a bias)
-Their performance over the last year and a half
Enjoy! 😎
Hello friends and welcome to our usual chat about the strategies in our portfolio that have performed the best over the last period.
Okay, today I want to talk to you about a currency future. I'm talking about the Japanese Yen, which tracks the trend of the exchange rate between the yen and the US dollar.
Now, basically, like many other currency futures, we can say that Japanese Yen isn’t very easy to handle with trading systems. And the reason for that is that generally, this isn't a very volatile market.
And in fact, we know very well that there are some institutions that are in charge of keeping the currency stable. In Japan, it’ll be the bank of Japan that will take care of the yen.
In Europe there is the European Central Bank, whereas in America, there is the Federal Reserve.
As a result, currency futures tend to stay in a range and of course, this isn't good for automated strategies, which as you know, in order to work well need momentum and need significant movements of the market that we want to trade on.
So today, I want to share with you two strategies in our portfolio that have been performing pretty well lately.
In particular, we're going to be looking at this strategy, which is calculated on Pivot Points, which is a well-known technical analysis indicator.
This is a reversal strategy, so we’ll buy at a support level calculated using Pivot Points, which is the blue line here, this slightly darker blue line.
On the other hand, when a false breakout occurs at the resistance level number 1, we'll enter the market by opening a short position.
So, basically, we’ll wait for a breakout below the blue line and then we'll wait again for a rise above that level to open a long position.
While on the other hand, if there’s a false breakout that’s occurred at the opposite level, we’ll go short.
This is a strategy that over the last 360 days, we could say over the last year or year and a half since we're talking about trading days, has been able to – let's say it’s gone through ups and downs.
As I said previously, it isn’t very easy to approach these instruments systematically.
We can see that in the last months of 2021 and also in the first months of 2022, this strategy was in, let’s say, a somewhat sideways phase that unfortunately had been going on for quite some time.
But then, at some point, with the more recent volatility, the outbreak of the war in Ukraine, as you know, and other external factors, the volatility in this currency market returned, and the strategy was able to take advantage of that.
The trend is undoubtedly erratic. However, I'd like to remind you that the performance that we are seeing here refers only to the last year or year and a half.
The average trade is $220, which is definitely an excellent value.
This is a multiday strategy, so positions are left open beyond the end of the day and eventually closed out with a stop loss, or a take profit, or with a reversal of the open position.
Let's move on to the next strategy that I want to show you today.
Now this strategy, we could say that it is the "opposite" of the one that we have just seen.
In fact, this is a trend-following strategy, but it’s also based on an hourly bias that is present in this market.
So we can open the long trades at the second bar and then for three bars from the second bar from the beginning of the session.
While on the other hand, we can open the short trades only from the seventh bar and only for two bars.
The long and the short trades are opened, respectively, on the highest highs of the last three bars and on the lowest lows of the last two bars.
So, this strategy will therefore trade both long and short. Also, in order to avoid buying and selling against the trend, we added a trend direction filter calculated using a moving average.
So, if, at any time, the price is below this moving average, which is calculated using 200 periods (we are on a 60-minute time frame, so 200 hours), then we will only open short positions.
On the other hand, if the price is above the 200-period moving average, we’ll open long positions.
And in fact, I mean, you can see that in a bearish trend, as we’ve seen in the last period for these futures, the strategy has only made or tried to make short entries, which is exactly what we wanted to achieve.
In this case, the average trade is lower because the positions are closed by the end of the session, so the positions are open for less time.
And again, we can see that after a bit of a sluggish end of 2021 and early 2022, the strategy has picked up, and it’s been fairly consistent.
So, guys, go and give it a try too! Currency futures generally aren’t the easiest instruments to trade with trading systems. Nevertheless, they can be a good option to diversify your portfolio in difficult times. So, go and try your hand at them too!
And if you want to know more about systematic trading, I’m going to leave you a link in the description of this video. From there, you can watch a free presentation by our founder Andrea Unger, or get our best-selling book by paying only the shipping costs, or even book a free call with a member of our team.
If you enjoyed this video, please give us a Like, go and click on the Like button! Subscribe to our channel, click on the little notification bell to stay updated on the release of all our new and upcoming content.
And with that, thank you so much for watching and yeah, we will see you again soon in our next video! Bye-bye for now!
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.
