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BOOK YOUR FREE STRATEGY SESSION NOW >>RBOB Gasoline futures can be very rewarding if traded with the right approach. However, in order to obtain positive results, it's essential to keep in mind two very important characteristics of this market, namely high volatility and low liquidity (especially during the night session) that tend to increase the risk of slippage.
That said, profitable trading on RBOB Gasoline is possible, as demonstrated by two of our strategies on this market that are producing excellent results.
In both cases, these are trend-following strategies that use ADX to filter entries...
...but to learn more about how they are structured and the rules used to filter entries, watch the video now!
Enjoy!
Hey everyone and welcome back! One of the coaches at Unger Academy here, and today we’re going to be talking about the strategies in our portfolio that have performed the best in the last period.
Alright, so let's start with the video. Today we're going to be talking about a market belonging to the energy futures sector, namely the RBOB Gasoline. Gasoline is a derivative of Crude Oil, which, as you know, is the most important future in this category.
In terms of volumes exchanged daily, this future is smaller than Crude Oil and also than other energy futures such as Heating Oil and Natural Gas. So, it's a less popular market, but if you approach it in the correct way, using trend-following strategies, or even some bias approaches, you could definitely get some interesting results.
Obviously, this market also presents some risks, because it isn’t very liquid, so the risk of slippage is higher on markets of this type, especially at night when this market is traded by very few investors.
Last but not least, the Big Point Value, namely the value of a single point on this market, is worth an impressive $42,000. This future is worth around $2.60 and today has a countervalue of over $100,000, in addition to being characterized by a very high volatility.
But let's start with the first strategy. It's a trend-following strategy, which, as I mentioned before, is a type of approach that works very well in this market.
More in detail, the strategy will enter on the highest between the high of today and the high of yesterday, which means that it will take the higher value between these two. Vice versa, for the short side we'll take the lower value between the low of yesterday and the low of today.
We also added some other conditions such as, for example, an indicator. In fact we used the ADX indicator and set a condition that requires it to be below a certain threshold. Because as we know, the ADX calculates the directionality of the trend, and so when it is low, there might be the possibility of seeing an increase in volatility and some potential breakouts in the following days.
This is the equity line that the system has produced since the end of 2020 to date. You can see that we're more or less at the highs. The long curve is really very nice while the short curve has suffered a bit in recent periods. However, we need to consider that the Buy and Hold has been strongly bullish, so I'd say that this strategy was able to perform pretty well.
This is the overall equity curve. If we look at the annual results, we should be satisfied. The results are already net of commissions and slippage, so as you can see, in 2021 we produced a profit of $16,000, and 2022 also seems to be off to a good start, with profits already over $3,000.
Let's now move on to the next strategy, which unlike the previous one is intraday, so it will close all the open trades at the latest at the end of the session, or at a stop loss or profit target, of course.
This strategy will simply buy at the break of the previous day's high and go short at the break of the previous day's low.
A number of additional conditions have also been included here. As in the previous strategy, we used the ADX indicator. So, we see that indeed this indicator is continuing to give good signals on this market, but also on other markets. So why don't you give it a try too?
Let's look at the results of the strategy. It definitely did a little worse than the previous strategy. However, in 2021 it earned over $9,000. Since this is an intraday strategy, it obviously makes less profit than a strategy of the same type but which keeps its positions open for several days. However, even in this case, 2022 seems to have started on the right foot.
This is the equity line of the strategy. As you can see, there are periods of low volatility or strong directionality where the strategy just doesn't place any trades, and this is due to the filtering of trades by the ADX and also by another filter that is based on the range calculated on the last day - so on yesterday - which doesn’t want extreme volatility.
Well, the video has come to an end. Today you’ve seen two potentially very good ideas to trade the RBOB Gasoline, a smaller future but certainly, if used in the right way, one that could give good results.
Below the video you'll find a link where you can access a free presentation by Andrea Unger. You'll also be able to buy a copy of his best-selling book, "The Unger Method," paying only the shipping costs. And if you want, you can also book a free call with a member of our team for strategic advice.
Finally, please remember to subscribe to our channel to stay updated on the release of all our new videos.
And with that, will see you soon! Bye-bye!
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.
