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BOOK YOUR FREE STRATEGY SESSION NOW >>Although U.S. stock indexes are characterized by an underlying uptrend, they can sometimes experience periods of high volatility with downward movements.
Unlike traditional Buy & Hold strategies, that naturally tend to struggle during such periods, systematic trading allows us to make profits by taking advantage of increased volatility and market movements regardless of their direction.
This is demonstrated by the three strategies presented in this video. They all trade Mini S&P 500 futures and have gained a total of over $5,800 over the period from late June to early August 2023, during a difficult market period.
Watch the video to learn more about the performance of these strategies:
-Trend following with entries based on Pivot Points
-Trend following with entries on breakout from the previous session's high/low
-Trend following/mean reverting with entries on round numbers
Enjoy the video!
Strategies for Mini S&P 500
Hi, and welcome back. As usual, today we will evaluate the strategies in our portfolio that have performed the best over the last period.
One of the coaches at Unger Academy here.
Recently, we have seen significant and very volatile movements in the stock markets.
We'll look together at how our strategies for the Mini SP 500 have performed during these summer weeks.
Strategy 1 - Trend following with Pivot Points
Let's look at the equity line of a strategy we will be analyzing today.
This trend-following strategy bases its entries on the Pivot point indicator.
It is a strategy that has performed well in recent months.
We see a handful of the last couple of trades here, and in this case, the previous two trades were closed in stop loss.
If we look a bit closer to see how these trades performed, we can see that the strategy opened the long trade here.
The market initially moved in our direction, and a sharp reversal triggered the stop loss.
In contrast, the trade that occurred on the following day was somewhat different. Here, the strategy tried to buy, assuming that the trend - the uptrend seen in the first part of the session - could continue, but then it didn’t, and unfortunately, the strategy took a stop loss again.
A Stop loss of $1030. The $30 is the cost that we put in for each trade. And if we go back, we see another trade, which in this case, closed at a profit of $395.
If we scroll back a little bit further, we see an excellent entry that, in this case, closed with a Profit target of $1,785.
This is a strategy that, as I told you, has done very well in the out-of-sample years, that is, the post-programming years.
It was developed more or less in 2018, and you can see that the subsequent years have also been very positive.
The average trade of the system is about $80, and as I mentioned before, we have already considered the commission costs and the slippage.
And we can safely say this strategy has performed very well even after programming.
Certainly, much better on the long side than the short side, but we know that with stock indexes, it's always much harder to find good bearish trades than bullish ones.
Strategy 2 - Breakout on highs/lows
Let's turn to another strategy that also performed well in the last period.
It's also a strategy that follows the trend, but in this case, let's say it’s a bit more of a classic strategy.
It enters the lows of the previous day.
And again, we see that the last trade was, unfortunately, a Stop loss, this time larger than the previous strategy, $1,730.
Before that, however, we had seen two excellent closed trades with a Take profit worth $3,235 each.
Again, we took into account commission costs and slippage.
Also of note is this short operation that ended on June 21, where we saw a return of over $2,000.
The report on this strategy differs from the strategy shown above.
We can see that the total number of trades doesn’t exceed 570 trades.
And the average trade in this case is definitely much larger than in the previous strategy.
But you can also see here that the average trade on the long side, the bullish side of the strategy, is basically the protagonist.
Because the short side does not get to average trade above $52.
The equity line of this system was also positive in the out-of-sample period.
We’re talking about an out-of-sample strategy from 2018, so we could say more or less up to that point.
You can see that the equity line had started to rise initially.
Then a sharp drawdown associated with the beginning and the end of the pandemic.
And then a rally to make up the ground lost by the strategy.
Strategy 3 - Round Numbers
Finally, let's look at a strategy based on round numbers.
This strategy could also be called trend following, but it also works with mean reverting logic if necessary.
In this case, we see that the last trade was closed at breakeven.
The strategy had reached the round 4500-point mark.
The market initially responded to this level by moving above 4,510 points, but then unfortunately continued its way to 4,482 points and then closed the strategy again at 4500.
Let's take a look at some other trades using this strategy.
In this case, we didn't see a break even, but we put a stop at $830.
Let's try to find a positive trade. Here it is, yes, a positive trade of about $20 with a short.
Another breakeven associated with July 28.
And again, we see a nice trade more or less at the level of... Let's say exactly at the level of 4,600 points. It then closed with a gain of $885.
Again, this strategy is out-of-sample since the beginning of 2018.
And initially, it also achieved excellent results.
This was followed by another unfortunate period, that of the pandemic, and it was also able to regain lost ground after the pandemic period.
In this case, it’s a strategy where many trades are made, so the average trade is also slightly affected.
But I remind you that we already see the results net of fees and slippage.
So, in the Mini SP 500 market, even $64, already net of fees, is absolutely a tradable value.
The total number of trades is 1862, and we can be quite satisfied with the performance of this system even in the last period.
Conclusion
So, if you want to learn more about systematic trading and how to create trading strategies like those shown today, click on the link in the description.
From there you can watch a free presentation by Andrea Unger, get our best-selling book covering only the shipping costs, or even book a free call with a member of our team.
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See you soon in our next video!
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.
