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BOOK YOUR FREE STRATEGY SESSION NOW >>In this video, we talk in detail about the winning strategy of our May 2023 Strategy of the Month contest and two other strategies that we found particularly interesting among those submitted by participants:
-Multiday reversal on Gold futures (winner of the contest)
-Another multiday reversal on Gold futures
-Intraday Breakout on Gold futures
The winning strategy is an excellent example of the application of the Unger Method™.
Its backtest on market data since 2010 produces a consistent equity curve and an average trade of approximately $330.
The Strategy of the Month contest is reserved for students of the Unger Academy® and rewards the participant who has developed the best strategy using the Unger Method™ with a €1,000 Amazon gift card. To learn more about the contest and how you can participate click here.
Whether you are looking for new ideas to diversify your portfolio or want to get an idea of the type of strategies we teach to develop at the Unger Academy®, don't miss this video!
Enjoy! 😉
What is the Strategy of the Month contest at Unger Academy?
Hello everyone, and welcome to this brand new video.
Today we're going to be looking at the results of our Strategy of the Month contest for the month of May.
We'll look at the most promising strategies from all the submissions you sent us and find out which strategy won.
You gave us a bit of a challenge this month because you sent us so many strategies, most of which were well-developed.
And we are very pleased because that means that the Unger Method works, it is easy to learn and can be replicated.
As always, we'll be going through the basic logic of the top strategies of the contest and observe their performance, providing you with some interesting trading ideas.
I want to remind you that the Strategy of the Month contest is reserved for Unger Academy students. Each month they can participate by submitting a strategy for a chance to win a €1,000 Amazon voucher.
I'm one of the coaches here at Unger Academy.
Okay, now let's cut the chatter and take a closer look at this month's top three strategies, all working on Gold futures.
Strategy on Gold: "intraday breakout"
Here we are at the first strategy designed precisely for Gold futures with a 15-minute time frame.
We have uploaded market historical data from 2010.
The student who developed this strategy used an Unger Academy template and optimized the different parameters.
It’s a strategy we can call a breakout of highs and lows.
In particular, the strategy opens a long position when the price crosses the highs of the last four sessions.
In this case, the four sessions, namely the first, second, third, and fourth, have recorded a high at this level.
And at this level, the next session, we entered because this price was exceeded.
The strategy closes all positions at the end of the day, so it's an intraday strategy.
Based on the same logic, it goes short when the price falls below the low of the last four sessions.
So, it's a perfectly symmetrical strategy, where the same conditions apply in a mirror image on the long and the short side.
This, on a commodity like Gold, is definitely a positive factor and an indication of the robustness of the system.
A stop loss, take profit, and monetary breakeven are also applied.
The breakeven also contributes significantly to reducing the maximum drawdown of the system.
Now let’s move on to the metrics. Net profit (as of 2010) is over $161,000 versus a maximum loss of just over $9000.
The ratio between these two values is almost 18, which is a good metric.
The curve is rapidly rising and smooth. Definitely on the long side, but the short side also contributes very well.
An average trade of $156 may not seem very high for the instrument, but considering that the average trade duration (we read it here) is only 30 bars, that means 7-8 hours, this is an excellent result.
Finally, if we look at the annual report, we see that there were only positive years with reasonable regularity, as we have seen in equities, so this seemed to be a good strategy.
Strategy on Gold: "multiday reversal"
Let's move on to the second strategy, which was also developed on Gold futures with a 15-minute time frame.
We uploaded data from 2010. Unlike the previous strategy, we could call it a reversal counter-trend strategy.
In the sense that it buys against the trend, as we see in this case, that it opens a long position when the price is falling.
So how does this strategy work? Starting from the session's opening level, which I'm showing you here, we see that the price fell to this level and then went up again.
Based on the session's opening price (so this one), the strategy establishes high and low levels, which, if crossed first down and then up in the long case, and vice versa in the short case, open a position.
So, in this case, we see that the price has decreased.
It crossed downwards through the long entry level we set, then broke up, so it re-entered on the upside.
In this case, that level was crossed to the upside, and we entered with a buy order.
Otherwise, we would have entered with a short order. Here we see an opening order at the level we discussed, closing the previous trade and "reversing" the position, opening an equal and opposite position.
So, this is a counter-trend reversal strategy.
It is also a multi-day strategy where all open positions are closed after a maximum of five sessions or through a monetary stop loss and take profit.
The system is perfectly symmetrical on both the long and short sides.
It is also very well-structured in calculating entry levels based on the session opening, to which a delta is added and subtracted in terms of the instrument's volatility.
Let's go through the metrics. We have a $383,000 profit versus a maximum loss of $23,000, so the ratio is 16.5.
The curve is rising sharply again on the long and short sides.
And the Average trade here is substantial. We are talking about $300. It's a multiday strategy that has more time to make a good profit.
The annual report page shows all positive years except for 2017. This is also an excellent strategy.
Winning strategy on Gold: "multiday reversal"
And here we come to the winning strategy for May, which was submitted by our student Alessio... Congratulations, Alessio!
This strategy was also developed on Gold futures with a 15-minute time frame.
It is a reversal strategy similar to the previous one. The entry-level is the low and high of the previous session, increased by a few ticks.
Here I've drawn the indicator for the entry levels on the chart to understand better how it works.
In this case, we see this blue line marking the entry level in this session, which is slightly above the previous session's high.
This red line is slightly below the previous session's low.
We’ll wait for a break of the price downwards and a re-entry upwards to enter long.
While we'll do the opposite on the short side.
Let's take a look at a trade. Here's one.
Here we see the long entry, this red line crossed downward by this bar, by this red candlestick, only to be crossed upward again, the with a return of prices upward, with this green candlestick.
So, we have the entry conditions here.
The trade continues its run, and after a few sessions, we see that the trade ends with a reversal of the position.
Let's zoom in a little bit. Again, we see the same conditions as before, so the break of the blue line to the upside, a re-entry to the downside with this red bar, and here we have the conditions for a short entry.
So, this strategy exits the trade after a maximum of seven sessions, placing a monetary stop loss and a take profit at the correct levels.
Let's look at the metrics.
We see a net gain of $348,000 versus a maximum loss of about $20,000, so a ratio of 17.5.
The curve is smooth and undoubtedly rises on both the long and short sides. We can see it.
The average trade is around $329, and regarding the maximum number of sessions that the strategy can stay in the market, we note an average number of bars per trade of around 200, which is equivalent to 50 hours, so about a couple of sessions.
So, in practice, the maximum number of seven sessions is reduced because the average trade lasts a few sessions.
If we look at the annual report of the strategy, we see that all years except the first are in profit with excellent consistency.
As we always do, we screen all the strategies that come to us, especially those that look as promising as this one, evaluating their performance with values in the neighborhood of the ones used. I must say that we have always had outstanding results with the strategy submitted by Alessio.
The strategy has a symmetric structure, which is something that works very well with a commodity. It also has a well-optimized time window, has very few conditions, and, as we have seen, generates trades that have a quite short duration.
And of course, it also has excellent metrics! In short, all of this convinced us to declare this strategy the best of the month.
Congratulations again, Alessio, from the entire Academy technical team!
Conclusion
If you want to develop trading strategies like the ones we just saw, you've come to the right place.
While learning, you can also enter this contest, exclusively for Unger Academy students, to win a €1,000 in Amazon vouchers each month.
We invite you to click the link in the description for more information.
From there, you can access a free presentation by Andrea Unger, get the best-selling book "The Unger Method" by covering only the cost of shipping, or book a call with a member of our team to receive a free strategy consultation.
If you enjoyed the video, please leave a Like and subscribe to our channel to stay updated on the release of new content.
Thank you so much for watching, see you next time!
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.
