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BOOK YOUR FREE STRATEGY SESSION NOW >>Odds are you’ve never traded the Feeder Cattle future, but you should!
This video breaks down two very successful strategies on Feeder Cattle, including their actual profits over the last few years.
Both strategies are trend-following, and boast excellent equity lines with low drawdown. Moreover, since Feeder Cattle is such a small market, you don’t need much capital to get started.
Watch now to learn how it works!
Don’t miss it! 😎
Hey everyone and welcome back!
I'm one of the coaches of Unger Academy, and today we're going to be talking about the rules of two strategies for Feeder Cattle.
Well, this week we’re going to talk about the rules at the basis of these two strategies for the Feeder Cattle. As you know, Feeder Cattle also belongs to the futures market but is much smaller and less known and traded than the other futures. Just think that on average 4,000 to 6,000 contracts are exchanged each day, which are really few if compared, for example, to the S&P 500, with millions of contracts exchanged every day.
This obviously involves a higher slippage risk when we backtest our strategies. So, when we trade illiquid markets such as this one, we need to have an adequate average trade in order to be protected from the risk of slippage that certainly arises when operating live on this market.
The strategies we’re going to talk about are both trend-following. This is a market that, like other commodities, is perfect for this kind of strategy.
Let's start with the first strategy I'd like to show you today. We built it in 2018, and it has managed to benefit from the movements in this market over the past year.
This strategy opens both long and short positions equally. The rules, or better the trigger to open the long positions, is the breakout of the high of the current session, and vice versa for the short positions, we enter at the breakout of the low of the current session.
Clearly, when you use triggers that, as in this case, are calculated on the current session, we absolutely need a time window so the strategy won’t open any trades in the very first few bars of the market. Otherwise, for example in the first bar, the high and the low of the day would be the same as the open of the day because there wouldn't have been enough time for the high and the low to develop. So just be careful!
The strategy starts working from 10:30, 2 hours after the beginning of the session, and this allows the two levels to develop properly. However, you’ll see that even in the very first bar there could be some interesting movements.
The strategy report was really very positive in 2021, so the year that has just closed. Both the equity of the long trades and the equity of the short trades (although a little bit less in the last phase) did very well. Maybe the curve of the short trades was better in the first part and the curve of the long trades did better afterwards.
But, overall, this strategy behaved really very well with low drawdowns. In fact, this is a market that can be approached also with small capital and you can even use stop losses of $400-500 when you trade it.
Let's take a look at the yearly results as well, since 2021 has just ended. The strategy made a profit of over $18,000 with 73 trades! The average trade is pretty generous. Please keep in mind, as mentioned earlier, that to successfully trade this market you need an average trade of at least $150!
In this case we have as much as $260. As mentioned earlier, it has been a particularly lucky year for this sector. It is not the norm, but let's say that even 150$ of average trade could be more than enough!
Now let's move on to the next strategy. This is also a trend-following strategy. It too will enter on a break of the high or low of the current session. Here again, there will be a time window. In this case, we will start only half an hour later just to have the breakout of the very first bar, which is very indicative on this market.
This strategy has also worked very well. We developed it in early 2021. As you can see, it also has a very good average trade. The equity line is very good as well. The curve of the long trades is good and that of the short trades is even better than the other.
Overall, at the end of the year this strategy has also managed, in its first year out of sample, to make very good profits.
So, guys, give don't you give it a try too? These are very simple ideas to code and you can definitely benefit from them.
We hope that this video has helped you.
Please leave your feedback in the comments below.
And also don't forget to give us a Like, subscribe to our channel and click on the notification bell to stay updated on the release of all our new videos!
In addition, in the description of this video, we're going to leave you a link to a free webinar by the 4-time world trading champion Andrea Unger, who will explain step-by-step how you can also become successful with trading systems.
And with that, thank you again, and 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.
