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BOOK YOUR FREE STRATEGY SESSION NOW >>In this video, we talk in detail about the winning strategy of our January 2023 Strategy of the Month contest and two other strategies that we found particularly interesting among those submitted by participants:
-Mean-reverting on Gold futures (winner of the contest)
-Trend following on Gasoline
-Bias on Nasdaq
The contest is exclusively for students of the Unger Academy® and rewards the participant who has developed the best strategy using the Unger MethodTM 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! 😉
Introduction
Hello everyone, and welcome to this brand new video.
Today we’re going to be looking at the results of our January "Strategy of the Month" contest.
So, we'll see which strategy won and a selection of the best strategies we received from the participants in the contest.
We’ll also try to give some trading insights by analyzing the logic behind these strategies, in which markets they work, and of course their performance.
I’d like to remind you that the "Strategy of the Month" contest is reserved for Unger Academy students only. Each month, they can participate by submitting a strategy and competing for a chance to win a €1,000 Amazon gift card.
I'm one of the coaches from Unger Academy here.
Trend-Following Strategy for Gasoline
So let's start right away by analyzing this first strategy.
It works on Gasoline futures on a 60-minute timeframe, and the concept is really very simple.
This is a breakout strategy, so a strategy that wants to ride an ongoing trend, like this one that you're seeing right now, which is an uptrend (and that's where we buy at the highs) and then close the position in a short period, on average a day, a day and a half.
This breakout is based on a Donchian Channel. We've talked about the Donchian Channel in a previous video.
So let's go and plot this channel. Here it is. As you can see it's nothing but a channel built with highest highs and lowest lows looking at 24 bars, in this case, which means 24 hours because the bars are 60 minutes long.
You can see here that you’re buying on the high side of the channel and selling on the low side.
The same thing happens here, and the same occurs here.
So let's look at the performance of this strategy.
We have about 850 trades since the beginning of 2010, a very good average trade… And notice that here we're not considering the trading costs, which are very high for Gasoline. Anyway, a $500 average trade is definitely an excellent number and can cover them pretty well.
The equity curve is also very high performing, and the net profit on drawdown ratio is very good.
I'm talking about how much the strategy gains over its retracements, which we can analyze here.
Going to look year after year at what our strategy has done, and as you can see, the results are outstanding.
Bias Strategy for Nasdaq
Alright, let’s move on to the second strategy that I want to show you.
This is a strategy for the Nasdaq, and it's based on two really very simple approaches.
You enter the market at a time before the opening of the U.S. stock markets, and only if an elementary condition is met based on the hourly reference bar.
Again, we are using a 60-minute timeframe.
You can see that we have market entries more or less around 8:00 in the morning. The U.S. market, if I remember correctly, opens at 9:30.
And it closes in the evening of the same day after the stock market closes. The stock market closes around 4:00 p.m. Here we see the close at 9:00 p.m., U.S. exchange time.
We also go here to analyze the performance year by year.
We had a bit of a weak year in 2018. If you remember, there were some ups and downs because of the contrast between Trump and China.
2014 was also a bit weak, but look at that excellent year in 2022.
When we look at our equity curve, we can see that the strategy is doing very well.
Here we look at the equity of one contract. The market has become more prominent, so it's normal to see that the performance is much higher than the year before.
Look, we could also do a very quick little game – instead of using one contract we can try using a fixed size, so in other words a fixed amount of money.
That would regularize the equity a bit and make the results that we had in 2010 comparable with what we have now.
As you can see, the equity remains very, very nice.
Mean-Reverting Strategy for Gold - The Winner of the Contest!
And finally, the strategy that we thought was the best, this winning strategy.
This is a strategy for Gold, and it is based on a reversal logic.
In this case, a template from Unger Academy was used.
Of course, that doesn’t mean that it’s necessarily the absolute best.
For example, regarding the strategy for Nasdaq, the trader used his own code based on an elementary idea.
Now, if we go back to the winning strategy of the contest, we can say that it’s a mean-reverting strategy for Gold.
Mean reverting on Gold means selling at highs and buying at lows, that is, going for market retracements.
This is also a strategy that is very little in the market.
Indeed, it’s an intraday strategy. We close positions at the end of the session, so we can take a stop loss or a take profit, as in this case, or close at the end of the session.
We have very consistent performance, and this is very interesting.
There are two weak points, here and here, but as far as the Average Trade is concerned, we get about $160 without commissions and slippage with over 1000 trades.
The strategy is well balanced between long and short trades, and despite not having the best performance overall compared to its competitors,
it was nevertheless selected as the best strategy because it’s an unusual approach for Gold, which, like other metals, has a turbulent behavior that rewards the breakout logic, such as what we have seen on Gasoline. So this strategy lends itself very well with a view to portfolio diversification.
I assure you that it isn’t that easy to make an average trade of almost $160 by going against the trend on Gold and exiting at the end of the day.
So, if your goal is to learn how to develop, on your own, trading strategies like the ones we’ve just seen, you’ve definitely come to the right place.
And if you join the Unger Academy, while you learn you can also participate in this exclusive contest dedicated to Unger Academy students, which gives you the chance to win a €1,000 Amazon gift card every single month.
So go and click on the link below the video for more information.
This link will take you to a page with the contest rules. From there, if you want, you can also book a free consultation with one of our tutors, who will give you all the information that you need.
Finally, if you haven’t already done so, please, I remind you to subscribe to our channel and click on the notification bell, so that you’ll be promptly informed when new videos are published.
And with that, we will see you again soon with new trading insights. 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.
