What is the Strategy of the Month contest
Hello and welcome back to this brand-new video! Today we are going to be looking together at the results of our Strategy of the Month contest.
One of the coaches at Unger Academy here, and in this video, we’ll look at a selection of the most promising strategies from all the submissions we received and see which strategy won the contest.
Alright, so I have to say that you’ve given us a bit of a challenge this month because you sent us so many strategies and most of them were really very well developed.
And we are very pleased about that, of course, because it means that not only does the Unger Method work, but it’s also easily transmitted.
As always, in this video, we will also give you some trading ideas by going through the basic logic of those strategies and evaluating their performance.
I would like to remind you that the Strategy of the Month contest is reserved for Unger Academy students. Each month, our students can participate by submitting their own strategy and competing to win a €1,000 Amazon voucher.
I also want to inform you about a great new feature, the Unger Strategy Club. This is an exclusive Club
that gives access to a monthly live Masterclass, where members can get advanced training, monthly trading insight videos where we illustrate the key rules of one of the best strategies in our portfolio, and exclusive access to the open-source codes of the winning strategy of this contest, with the database of the codes of all the strategies that have won in the past.
Multi-day fade breakout strategy on Gold
Let’s look at the first strategy we’re seeing today, which was developed for Gold with a 15-minute time frame.
This strategy is based on a relatively simple concept.
For each session, we define two levels, an upper one, here in blue, and a lower one, here in red.
We’ll then wait for the price to cross the blue line downward to enter short and to cross the red line upward to enter long.
Let’s look at a few trades to understand this concept better.
Here we see a bar that has closed above the blue line.
The next one closed below.
So we got the cross that we were looking for to enter short.
Then, here at the next bar, we will enter a position with a short trade.
This trade will then change direction: in this case from short to long.
Because at this point, this bar that you see closed below the red line and the next one closed above the red line.
So, we had a cross contrary to the previous one, that went from below to above the red line.
This is the condition for going long, so we opened a long trade.
This is a multiday strategy where open positions are closed after about three sessions.
It is symmetric, meaning all conditions were developed symmetrically between the long and short sides, which is great for a commodity like Gold.
And it has well-positioned stop loss, take profit and breakeven monetary exits.
Let’s look at the metrics.
This strategy generates a net profit of almost $400,000 with a maximum drawdown of about $20,000.
So, the ratio of these two values, which is 19, is excellent.
We see the curve, increasing with perfect regularity.
And the average trade of $164 is well distributed between the long and short sides.
We can also see that the two equities are certainly quite regular.
Now, if we look at the Annual Period Analysis of the strategy, we see that we have spent all the years in profit and none of the years in loss, which further confirms the goodness of the strategy.
Weekly BIAS strategy on Feeder Cattle
Let’s now move to the second strategy, which was developed for Feeder Cattle futures with a 15-minute time frame.
This is a weekly bias multiday strategy.
What that means is that we will enter by exploiting a recurring feature of this instrument.
That is, we open a long position at the beginning of the week, close it in the middle of the week, on Wednesday, and then open a short position on Thursday and close it on Friday.
Here we see a short trade between Thursday and Friday and a long trade at the beginning of the week.
The strategy has few conditions, which is a good thing.
And even though this is also a commodity, the developer didn’t look for a symmetry in the conditions between the long and short sides.
However, this is okay because the long and the short trades occur in different days of the week.
Let’s now take a look at the metrics. The strategy has been making a profit of about $107,000 since 2010 with a very small maximum drawdown of not even $7,000.
The ratio between net profit and drawdown is 15, which is an optimal value.
The curve is smooth and increasing.
The average trade is $230, which is very good for this instrument.
We also see that the long side and the short side are very well balanced.
Again, if we look at the Annual Period Analysis of the strategy, we see that all years are definitely in profit.
The winner: Multi-day trend-following strategy on Platinum
And here we come to the winning strategy of the July contest, a strategy that was submitted by our student Domenico. Congratulations, Domenico!
This strategy is developed on Platinum futures with a 60-minute time frame.
This is a multiday trend-following strategy that was created using one of the templates the Unger Academy provides to its students.
The strategy uses the low and high of the previous session as entry levels.
Let’s take a look at some trades. Here we see that the low of this session was reached at this point right at the end of the session.
In the next session, this low was broken to the downside by this clearly red candlestick.
And this is where we got our entry signal and went short.
The signal then changed from short to long at this point.
Here we see the high of the previous session that was crossed upwards by this candlestick, and here we got the okay to enter in the opposite direction, opening a long trade.
The strategy uses a monetary stop loss placed at a very well-chosen level and in a very stable neighborhood.
It doesn’t make use of a profit target.
Let’s look at the metrics of the strategy.
So, the strategy has been making a profit of $205,000 since 2010 with a maximum loss of about $18,000.
So, the ratio between the net profit and the maximum drawdown is about 11.5.
The curve is undoubtedly rising and smooth, somewhat rippling in the last part.
And the average trade of the strategy is over $200, which is undoubtedly an excellent level for this instrument.
If we look at the Annual Period Analysis of the strategy, we see that all the years are in profit.
Although the year 2023 has yet to be up.
Anyway, the strategy is almost always on the market and trades with a maximum duration of a few weeks.
So, we tried out what would happen if we set a take profit, which the developer didn’t add to this strategy.
When we tested it, practically nothing changed.
The maximum duration of the trades would obviously be reduced, with winning trades closed when they reached this threshold.
However, the metrics would not change because the position would be reopened shortly after in the same direction.
So, bravo Domenico, you have created an excellent strategy!
As you know, we review all the strategies you send us, especially those that look as promising as this one.
For example, we play around with the conditions and parameters in their neighborhood to check their robustness.
And I must say that we have always obtained excellent results with Domenico’s strategy, proving the robustness of the system.
The strategy has a symmetric structure, which is excellent since we’re trading on a commodity.
It has a well-optimized time window, very few conditions, excellent metrics, and was developed on an instrument that is certainly not one of the most common, nor one of the easiest ones where to develop good trading systems.
In short, all this convinced us to declare it the best strategy of the month.
Congratulations again, Domenico, from the entire Academy technical team.
Conclusion
Well, I hope you found this video helpful! And if you’d like to learn to develop trading strategies like the ones we have just seen, you have come to the right place.
While you are learning, you can also enter this contest dedicated exclusively to Unger Academy students to win a 1,000 Amazon voucher every month.
Finally, I’d like to remind you of the great news I mentioned at the beginning of this video: the Unger Strategy Club. If you want to learn more, just visit www.ungerclub.com.
And for more information about our systematic trading method, I invite you to click on the link in the description of this video. From there, you can watch a free presentation of Andrea Unger, get the best-selling book "The Unger Method" shipped to your home, covering only the shipping costs, or book a free call with a member of our team to receive a free strategy consultation.
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Thanks for listening and I will see you in our next video!
