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BOOK YOUR FREE STRATEGY SESSION NOW >>Gold is undoubtedly one of the most traded commodities in the world. It's considered an important safe haven asset and is often included in asset allocation models along with stocks, ETFs and bonds.
In complex periods characterized by rising inflation or critical geopolitical situations, such as the conflict between Russia and Ukraine, this commodity tends to rise.
In today's video you’ll learn about two strategies in our portfolio that are making the most of the fluctuations of the Gold Future.
By watching the video you'll discover:
- How our mean-reverting strategy works
- How our strategy which leverages the famous Gold Bias works
- The real performance of these two strategies in the last period
Enjoy the video! 😎
Hey everyone! One of the coaches of Unger Academy here, and welcome back to our usual chat about the strategies of our portfolio that have performed the best in the last period.
Okay, so this week we’re going to be talking about Gold, namely the Gold Future. It's a very heavily traded contract. We've seen it rise dramatically over the last few weeks and even months. This is due to an increase in inflation, and also because we know that gold is a commodity that generally acts as a safe haven both in times of high inflation and in times of war, for example. So when the news from the various world fronts is not so good, this market should serve as a shield for our capital.
And indeed, we've seen it go up. This future is present in many types of asset allocation that involve mixing not only shares but also ETFs, bonds and even commodities such as gold.
The first strategy I want to show you is a mean-reverting strategy, which basically means that when the market goes up, as we see for example in this case, we'll enter short. The entry trigger for the short side… Well, we'll wait to see a close above.... Let's zoom in… We'll wait to see a close above the high of the previous day, which in this case is here.
And then when prices return below this level, we'll go short. So, basically: when the market breaks through the highs of the previous session but then makes a sort of bluff and goes back, in that case we take the opposite position to what was the trend.
Vice versa on the short side. You see here that the market was down. Near the low, the low of the day before, there was this fake breakout. So, the market tried to break this level downwards. It didn't make it. It bounced back up. The strategy entered long and then closed the trade in profit.
This strategy has a take profit that we could say is relatively small. Because it's around $1,500. That's not much for an intraday strategy on Gold but it is something that would work very well in a mean-reverting strategy.
This is the equity line for the last 365 trading days, so roughly a year and a half. Here's the short side. Surprisingly, in the face of these big upswings however the strategy managed to run into a great series of short trades.
Obviously, a strategy of this type will have more opportunities to enter mean reverting when the market rises. And vice versa, for the long: the more the market goes down, the more there will be opportunities to buy. This is obviously risky so please use extreme caution when using this type of strategy especially on commodities.
Here is also the long side, which as I said, instead, has performed a bit worse than the short side, even here incredibly. But, overall, we can definitely be satisfied with how this strategy has performed.
The next strategy I want to show you is a strategy known by those of you who have been following our channel for a long time. It is a bias strategy, but it also awaits trend-following confirmations in order not to enter only in proximity of a specific time of day, but also to have a sort of confirmation on the short-term trend.
The short will enter in the first part of the day, so it will be enabled between the first bars of the day, of the session. While instead the long as you see will enter in the second part of the session and then close in the first part again, before entering short.
This is the famous, very famous bias on gold. This strategy is continuing to perform very well.
So, guys, as always, I invite you to try it too.
If there is anyone among you interested in the world of systematic trading, please go and click on the link in the description below. You'll have the opportunity to see a presentation by Andrea Unger, or get our best-selling book covering only the shipping costs, or book a free call with one of our team members.
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Bye everyone, I will see you soon!
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.
