Trend-Following Strategies for Corn and Feeder Cattle - Also for Small Capitals (with Performance)

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The Corn futures and Feeder Cattle futures are some of the markets that can be approached even with little capital.

Both markets respond well to trend-following strategies and offer a good level of downward scalability.

In this video you’ll discover two of our strategies for these markets that have performed very well recently, especially during 2021. 

They are both based on a breakout approach and contain some additional filters to improve the effectiveness of the entries.

Watch the video to learn more about how they are structured and their actual performance!

Enjoy the video!

Transcription

Hey everyone, welcome back! One of the coaches of Unger Academy here and today we’re going to be talking about the strategies in our portfolio that have performed the best over the past period.

Okay, so this week I’d like to talk about two markets that are a little less popular and somewhat a little more difficult to trade, in a certain sense. I'm referring to two futures: the Corn market and the Feeder Cattle market, which belongs to the Meats sector and basically refers to the feed given to breeding cattle.

Like many other commodities, both of these markets respond very well to trend-following breakout strategies. They're quite scalable markets that can also be approached with not too large stop losses and so they're certainly suitable also for smaller capitals.

Let's start with the strategy on the Feeder Cattle, which was designed on a one-minute timeframe to have a cleaner backtest. It's a trend-following strategy, as mentioned before, and enters at the breaking of the high or the low of the current trading day.

Obviously to use this kind of trigger (the high and the low of the current trading day) we'll have to use a time window that eliminates the very first backtest bars, otherwise at the first backtest bar, obviously, the high and the low of the day are practically identical, and therefore it wouldn't make, you know, any sense to place orders on those levels. So remember always to use a time window to prevent entering during the very first backtest bars.

In addition, we also added a condition that basically requires that today's range must expand compared to the range of the day before.

This strategy worked pretty well in 2021. This is the equity line of the strategy. So as you can see, it has a positive slope.

Let's take a look at the two separate long and short curves. At different times they brought benefits to equity and that's definitely a good thing.

Let's also look at the strategy's annual results, and as I mentioned before, 2021 was a particularly lucky year.

The year 2022 so far, on the other hand, hasn't started very well but, you know, very few trades have been done, so the final results could probably bounce back.

So, 2021 was a great year! Let's give it a try too. Trend-following strategies really perform pretty well on this market.

Now let's move on to the next strategy that I wanted to show you today. It's the strategy for Corn. It's also a trend-following strategy and like the previous one, it also enters at the breakout of the high or the low of the current trading day with other filters, other conditions to limit the number of entries.

It is a multiday strategy developed on a 15-minute timeframe.

The equity line and the annual results of this strategy have also been very good. You see, it made over $13,000 in 2021 and also, as previously mentioned, the equity line has been very good as well. We're now approximately at the highs of the equity.

You can see that around May-June 2021 there was a strong acceleration, a sudden increase in the volatility of this market that fortunately this strategy was able to exploit to its advantage.

At this point you just have to try to develop automated strategies on these markets, which, as said, respond well to trend-following strategies.

Well, I hope you found the video helpful. Let us know what you think in the comments.

In addition, please remember to leave us a “Like”, subscribe to our channel and click on the notification bell to stay updated on the release of all our new videos.

Below you’ll also find a link to a free webinar held by the 4-time world trading champion Andrea Unger, our founder, who will explain step-by-step how to become successful on the financial markets.

Thank you so much for watching this video. I will see you soon! Bye-bye!

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Andrea Unger

Andrea Unger

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.