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BOOK YOUR FREE STRATEGY SESSION NOW >>The Standard & Poor 500 Index (S&P 500) was created in 1957 and tracks the performance of the 500 most-capitalized companies in the United States.
Its future can be traded with different logics and has shown a certain consistency over the years.
In today's video we'll share with you two strategies from our portfolio that are performing particularly well on this market.
By watching the video you'll discover:
- The rules of our intraday reversal strategy
- The rules of our multiday strategy which exploits of a well-known pattern of the S&P 500
- The real performance of these strategies
Enjoy the video! 😎
Hey everyone! One of the coaches at the Unger Academy and welcome back to our usual chat on the best-performing strategies in our portfolio over the last period.
Okay, so this week we’re going to be talking about the S&P 500 future, which has seen a rebound in price after an initial downturn in 2022. Now it's rebounding a bit, and some strategies that enter with mean-reverting logics have taken advantage of this situation.
The first strategy we want to show you today is an intraday strategy, which means that all positions, whether long or short, will be closed at the end of the day, namely at the last bar.
The unique thing about this strategy is that it has two signals, both of which are based on a reversal approach. So we have a traditional fade breakout, meaning that we wait for a close, for example below the previous day's low, and then a close above the previous day's low in order to enter long.
Or we can also directly place a limit order on the previous day's low. These two signals are activated and deactivated in different phases. So, maybe on one day we'll have an active entry with the limit order and maybe on another day we will have an active entry with the crosses.
It doesn't really change things because, as I mentioned before, both signals enter more or less on the same level but work with slightly different logics.
This strategy was built on a 15-minute timeframe and works out pretty well. Let's look at the performance report of the strategy, which has been out-of-sample from 2018, so more or less from this stage.
Immediately after that there was a slightly more difficult phase, but then we see that the strategy recovered. We all remember that in the first months of 2018, and also in the last months of the same year, the S&P 500 recorded important declines and mean-reverting strategies had suffered some drawdowns. However, then this strategy was able to recover and performed very well for the next 3-4 years.
Now, the second strategy that we want to show you today is also on the Mini S&P 500, but this time we'll keep the positions open beyond the end of the session. So this is a multiday strategy.
However, it's quite a particular strategy because we'll wait for the occurrence of a well-known pattern on the S&P 500, namely we'll wait to see a close in the previous day in the lower range.
Let's focus on this session for example. The high of the session was recorded here while the low was recorded on this level at 4,445. As you can see, the close of the market was very close to the low of the session, so, if a bearish close were to occur within the lower 20% of the total range of the session, which we said is this… As for example happened in this case and also in this case.
Here the market has practically gone down and has closed close to the lows. The next day, at the stroke of midnight, the strategy enters the market.
This pattern is usually called "day drop" and is characterized by a very negative closing the day before, so with a strong bearish closing that is close to the lows, as I was saying.
And here it is: this is the strategy performance report. Thanks to the last two trades, we reached the equity peaks.
This strategy only enters long, so it will only make bullish entries. As you can see, it's definitely something that works on this market. It has been doing well even during market drawdowns and, as I said before, it's now on equity peaks.
This market, the S&P 500 future, is really very interesting. You can approach it with different logics and over the years it has proven to maintain a certain consistency. So, give it a try. You can find a lot of good ideas.
Well we hope that this video has been helpful to you. If there is someone among you who is interested in the world of systematic trading, I'd suggest that you click on the link in the description of this video. From there you'll be able to watch a video of Andrea Unger or get our best-selling book covering only the shipping costs. Or why not, book a free call with a member of our team.
Please remember to leave us a Like, subscribe to our channel and click on the notification bell so that you can stay updated on the release of all our new videos and all our new content.
And with that, will see you next time. 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.
