In this video, we’re excited to share two powerful strategies from our portfolio that trade on the same instrument, gasoline futures quoted on NYMEX, with a similar approach.

The first strategy focuses on a recurring price behavior that occurs within a single trading session. It’s a well-balanced strategy that performs strongly on both the long and short sides, delivering an average trade of $215.

The second strategy, on the other hand, exploits a multiday recurring price behavior. This strategy is straightforward yet enhanced with some additional filters to boost performance, resulting in an average trade of $375.

From January to August 2024, these two strategies have collectively generated $24,000 with just one contract.

Curious to find out more? Watch the video now! You’ll learn:
•The mechanics behind these two strategies
•In-depth details about their performance
•Useful tips for trading gasoline futures

Enjoy watching! 😎

Transcription

Introduction

Welcome to a new video on our portfolio strategies.

Today, I’m excited to share two strategies built on the same concept and focusing on the same instrument: gasoline futures.

Just to remind you, Gasoline is part of the energy sector, alongside Natural Gas, Heating Oil, and the more commonly known Crude Oil.

These futures are traded on the Nymex and have a session running between 6:00 PM and 5:00 PM New York time.

This is crucial to keep in mind, especially for one of the strategies we’ll explore in just a moment.

I want to highlight that the goal of this video is to offer you guidelines and insights that you can use to develop your own strategies on this asset, following the core principles we’ll cover today.

With that said, I’m one of the coaches at Unger Academy, and let’s dive into the first strategy.

Strategy #1: Intraday Bias

Here, we’re dealing with a bias strategy, where we take advantage of a recurring market behavior that happens during the trading session.

However, positions aren’t opened just based on time. We also set two breakout levels. Let’s take a closer look.

First, we’re looking at a chart with 60-minute bars.

When we’re on the 11:00 AM bar, a buy order is placed at the high of this bar.

As you can see in this example right here.

This trade closes on the 10:00 PM bar, where a short trade is then opened at the break of the previous bar’s low.

By analyzing these examples, particularly this one, you can clearly grasp the strategy’s logic.

Now let’s look at the performance, starting with the equity line.

Looking at this curve, I want to stress that this system has been running out-of-sample since 2017.

As you can see, it has consistently performed well over the years.

Recently, the last few trades have hit new equity peaks, confirming this strategy's strong performance.

When we break down the long and short sides, it’s clear this is a well-balanced strategy that performs well in both directions.

Let’s move on to the total trade analysis.

Here, we can see 1,300 trades were executed, 580 of which were long, fewer than the short trades.

This is likely because there's a breakout condition in this strategy.

Given this underlying asset’s downward trend in recent years, it's more likely for short trades to occur than long ones.

That said, we’re looking at an average trade of $215, which is quite balanced between the long and short sides.

Now, let’s break down the performance year by year.

Here, we see that aside from a slightly negative 2019, the strategy has maintained solid returns.

Additionally, 2024 is shaping up to continue the excellent performance we've seen over the last four years.

Strategy #2: Multiday Bias

Next, let’s dive into the second strategy.

This is also a bias strategy, but instead of leveraging a session-based recurring behavior, it capitalizes on a multi-day recurring behavior.

Essentially, short positions are opened after the first bar of the week.

In this case, I'm referring to the first bar on Sunday, following the New York session.

It’s important to pay special attention to this trade because it’s executed with market orders near the session opening, which can lead to issues due to low liquidity during those hours.

The short position is then reversed on Tuesday at 10:30 AM.

So, while this is a relatively straightforward strategy, additional filters have been added to enhance its performance, along with solid position management through Stop Loss and Take Profit.

Now, let’s review the performance of this strategy as well.

Starting with the equity line, this strategy has been out-of-sample since 2018, and the equity line is certainly less linear compared to the previous one.

It has faced more challenges in the out-of-sample phase, but it remains on a positive trajectory.

Notably, the long-side advantage appears less pronounced in recent years, but the short side has continued to perform well after a sideways phase.

Analyzing the total trade analysis, we see that this strategy has a very balanced number of trades.

The same can’t be said when talking about the average trade, the total is $375, with over $400 on the long side and $340 on the short side.

This, however, makes sense, considering short-side positions only stay open for two days, while long-side positions remain open for the rest of the week.

So naturally, being in the market longer on this latter part results in a higher average trade.

Finally, looking at the strategy's annual returns, we notice two negative years and there seems to be a noticeable decline in performance compared to the early years.

But despite this, it’s still worth monitoring this strategy and keeping it within our trading system portfolio.

Conclusion

And that's all for today.

As always, if you’re interested in topics like these, click on the first link in the description, and I’ll see you in the next video.

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