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 >>In this video we’ll introduce you to two strategies for the DAX index that are producing excellent results.
Both are based on the Bollinger bands and open positions when significant levels calculated using this indicator are broken. The difference is that one strategy enters in favor of the trend, while the other strategy enters in the opposite direction of the current trend.
Watch the video to find out:
-How the two strategies work
-Their recent performance
Enjoy! 😎
Hey hey, everyone, and welcome back to our usual chat that we have about the strategies in our portfolio that have performed the best over the last period.
Now, as you know, we are definitely approaching Christmas, and so this will be the last appointment before a very short market break to enjoy the Christmas holidays to the fullest and also to be able to recover a little bit from the hard work of an entire year of trading.
Okay, so this week, I want to talk to you about the DAX, a market that, as you know by now, is well-suited to different logics, whether they be trend following, reversal, or bias.
In the specific case of this week, we’re going to see two strategies that we could say are based on opposite rules. In fact we have a reversal strategy and a trend-following strategy, both of which have brought benefits to our portfolio.
The first strategy I want to show you is the reversal strategy that enters the market at significant levels calculated on Bollinger bands.
So, we’ll buy at a downward breakout of the Bollinger bands.
So, if the market is in a downtrend, we'll try to open a long position, as it was, for example, in this case, and where we saw that the trade ends at take profit.
Of course, the opposite is true on the short side, where we’ll instead wait for a break of the upper Bollinger band, and then enter in countertrend, so basically, against the trend of the underlying market.
This strategy was coded in 2017, and I've got to say that over the last 365 trading days, it’s been able to exploit the movements that the DAX has made pretty well.
The annual period was positive. As you can see, in 2021... All right, in this case, it’s cut off, but we can see that in 2022 we had an Average trade of even €1,500 which is very high especially considering that this is a strategy that was developed precisely at the end of 2016, and consequently, this whole period is absolutely out-of-sample.
The number of trades that this strategy makes isn’t very important. We’re on a 15-minute time frame, so there are many signals on these bands, there are multiple signals, so it will be necessary to filter these entries so that they don’t result in too many false signals during the out-of-sample period.
35 trades in the year. So, we're talking about approximately three trades a month, so it’s a strategy that certainly doesn't work a lot, but it knows, let's say, very precisely where the DAX reversal levels will be.
So, let's turn now to the next strategy. As I mentioned earlier, it’s the opposite strategy of the strategy we’ve just seen.
Indeed, it also uses Bollinger bands, but in this case, in favor of the trend.
So, if there’s a break of the lower Bollinger bands, we’ll place short market entries and orders on the other hand, if there’s a break of the upper Bollinger band, we’ll place long orders.
So, this is a strategy that is opposite of the previous strategy. In a certain way, this strategy tries to identify the underlying trend and chase it a little bit, confident that the trend will probably continue for a few more days.
The Dax is a market that I think is atypical of the basket of equity indexes because it’s also – I don’t want to say easy, but easier than other markets – to go short in this market.
And indeed, this very nice trade achieved on December 15 is testimony to that.
The report on this strategy is also positive.
As you can see, in this case, the Average trade returns to more normal values, but it’s also true that this strategy makes about twice as many trades as the previous strategy.
And you see, the results are satisfactory. Now let's look at the overall Average trade.
We are at $470, and the equity line of the system is this. So, in the last phase we have a sharp increase, while in the first part, when the, let's say, inverse strategy was doing very well, this strategy struggled a little bit more.
Here’s the thing, in the last few months, starting in September, these two strategies actually correlated and they worked together in the same period.
These strategies are easy to code. Bollinger bands are a very widely-used indicator, especially in this market. The DAX, as we’ve seen, lends itself well to reversal and trend-following logics.
So, go and try it out as well! And if there is anyone among you who's interested in the world of systematic trading, I recommend that you go and click on the link in the description of this video, we'll leave it in the description there at the bottom. You can watch a free presentation by Andrea Unger, go and get our best seller by just covering the shipping costs, or even book a free call with a member of our team.
And if you enjoyed the video, please leave us a Like, please subscribe to our channel and go and click on the notification bell to stay updated on the release of all our new content.
And with that we thank you so much and we will see you soon gain 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.
