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BOOK YOUR FREE STRATEGY SESSION NOW >>In this video, we discuss two strategies for Nasdaq futures that have made the most of the bearish moves that have affected this stock index in 2022.
The first strategy is based on a countertrend approach and thus exploits the Nasdaq’s "traditional" mean-reverting trend. In contrast, the other strategy tries to exploit the trend-following trend that has been unfolding in this market in recent years.
Both strategies are intraday and have been live for several years.
By watching the video, you’ll discover:
-The entry and exit rules of the two strategies
-Their recent performance
Enjoy 😎
Hey, everyone, and welcome to our usual chat about the strategies in our portfolio that have performed the best over the last period.
Alright, so this week, I want to talk to you about a market that has been performing very well lately, which is the… Nasdaq.
Specifically, we're going to be talking about intraday strategies, which have been able to intercept movements better than, for example, multiday or longer-term strategies.
So let's start with the first strategy that I want to show you.
It’s a mean-reverting strategy that tries to enter against a trend, let's say.
Like in the case of this trade, for example.
You can see that the market was going up. As soon as it hit the high of the previous day, which was, let's say, around this point here, it went through a false breakout, so, a breakout was first up from this level and then down from the same level, and at that point, the strategy made the short trade.
Long trades will happen instead in the exact opposite way, so, at the previous day's low level, namely this point here.
You can see that the market has crossed this level downward first, and then it returned above this level and the strategy entered the market.
So, this is a strategy that, as I said, is mean-reverting intraday and will close its positions at the end of the day.
What worked very well was mainly the short side.
Let's say that this is to be expected in a year like 2022, where the market has had some huge drops that can be easily explained if we consider both the strong rally that we’ve seen in the last couple of years and, more generally, the geopolitical situation that we’re seeing around the world.
So, the equity line of the system is this. It’s a strategy that’s been out-of-sample since 2018, so we could say that it’s been out-of-sample more or less from this point on for several years.
And you can see after the pandemic, the strategy was able to take advantage of the volatility generated by this market.
However, there was a period that we could say went from July 2020 to early 2022, with a general leveling off, with a decline that lasted for quite a while anyway.
But lo and behold, in the current year, in conjunction with a bearish year, which is a little bit strange, the strategy was able to return to its equity peaks.
Let's move on to the next strategy.
This is a strategy that, we could say, is the exact opposite of the previous one because, in this case, we’ll try to enter in favor of the trend and not against the trend.
So, if the market goes up and moves in such a way that it breaks the levels calculated on the Average True Range, specifically, six times the Average True Range from the day's opening, so if the market is up at least six times the ATR since the day's opening, we’ll buy.
The reverse is true for the short side.
Like the previous one, this strategy also makes short trades.
It has a take profit that can be described as very "short" for this market.
To be precise, we’re talking about a take profit of $2,000, which is no longer much in this market.
It sometimes takes just a few bars to open and close a position.
It's also an intraday strategy, so in case the stop loss or take profit are not reached before the market closes, we’ll still close all our trades at the end of the session.
This strategy was also developed in 2018, at this point here, and you can see that it worked very well in out-of-sample.
This is further proof of the fact that this market, the Nasdaq, as well as somewhat the SP 500, let's say the big brother of Nasdaq, have developed in more recent years, especially in 2022 but also generally after the pandemic, a trend-following behavior, so not just mean-reverting as it used to have in the past.
This strategy has also been able to generate good gains on the long side but, again, it was the short trades that made a difference in this market.
So, guys, go and give it a try as well.
Nasdaq isn’t a remarkably scalable market, but there are micro futures. Micro-Nasdaq, in particular, is a very liquid market that is certainly accessible and worth 1/10th of the total contract, and this means that you can generally approach the micro-Nasdaq even with low capital. So, try it out for yourself.
If there is anyone among you who’s interested in the world of systematic trading, I recommend that you click on the link in the description. From there, you can go and watch a video of Andrea Unger, our founder and only 4-time world trading champion in real-money trading, or get our best-selling book, "The Unger Method", by just covering the shipping costs. Or hey, why not, you can even book a free call with a member of our team.
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And with that, we will see you 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.
