Trend-Following Trading on Soft Commodities: $14,300 on Coffee and Orange Juice

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This video discusses two trend-following strategies that have effectively capitalized on the recent movements of two Intercontinental Exchange (ICE) futures, earning more than $14,000 combined in 2023.

The first strategy trades Orange Juice Futures and has made a profit of $5,175 in just 3 trades, with an average trade of $447.

The second, which trades on Coffee Futures, is a multiday strategy and has made over $9,000 in a year.
Want to learn more?

Then watch the video now! You’ll discover:
-How the two strategies work
-All the details about their performance
-Some useful information for approaching this exchange

Enjoy 😎



Hello 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, where we develop automated strategies and then use them in the major futures markets.

Today, we will look at two recent strategies that have performed well in the ICE market. ICE is short for the Intercontinental Exchange based in New York, where commodities are traded, like Coffee and Orange Juice, that have recently made some exciting moves.

Trend-Following Strategy for Orange Juice: General rules and performance

Let's start immediately with the strategy we developed for the Orange Juice market, which was made famous by the movie "Trading Places," which I’m sure many of you are familiar with, in which this commodity was negotiated.

And this strategy we’re seeing together today is seasonal. So it won’t trade very often, but instead, it will actually open new trade quite rarely throughout the year. In fact, it will only make a few limited entries in some specific time windows.

Precisely, between October and December of each year, the strategy can place orders only when a channel based on the highs and lows of the period is broken, opening either long or short positions.

This strategy follows the underlying trend but is only used at this particular time of year.

As you can see, it has made good profits in 2023.

More precisely it made about $5,000, resulting from just these three operations.

The first trade yielded $980. The second one, unfortunately, was closed at stop loss with a loss of $2,700. And then we see the last trade, a short one, which was closed at a profit of about $4,800 at the beginning of January, so already in 2024.

These results are already net of commissions and slippage that we would face if we were trading live on this market.

But let’s have a look at the equity line of this system.

TradeStation provides us with historical data even from the 1980s. In this case, the backtest starts from 1985 to the present day.

And since this strategy only makes a few trades per year, it certainly needs be tested over a more extended period of time than is usually the case.

As I told you, it’s a strategy that brought home good profits in 2023.

2024 has started poorly because this trade, the short open trade that we see here on the right, has since retraced, basically slightly to the upside.

But still, the strategy has made $5,175 in 2023, which is the result of only four trades.

This market isn’t particularly volatile, but if you approach it in the correct way it can make for some exciting average trades.

Specifically, this strategy reaches an average trade of $447.

The total number of trades since 1985, as you can see, is very small, only 103 trades, and in general, this is a strategy that on average doesn’t make more than 4 trades per year, apart from some years such as maybe 2019.

So, this is a strategy that’s very well suited for those who maybe don't like a hectic type of trading, and in general, Orange Juice is also a market that’s well suited, let's say, for those who don't have large amounts of capital to trade.

Trend-Following Strategy for Coffee: General rules and performance

Let's move on to the second strategy, which also trades on an instrument quoted at the ICE exchange. The market in question is Coffee.

The strategy we’re going to see now is multiday and we could call it trend-following because it places orders when a price channel built on the last twelve bars is broken.

The bars are built every 5 minutes, so basically, we will place orders on the highs and lows of the previous hour and then stay in the market for several days.

For example, this long trade opened on November 29 and then closed on December 19, so almost a month, let’s say, about 20 days, with a profit of almost $11,000.

Again, we have included the commission costs and slippage we’d incur in live trading. But let’s look at what the report of this strategy looks like.

As I said, this strategy also made a decent profit in 2023, $9,130, the result of 54 trades.

It was definitely an excellent year and it’s certainly in line with its performance in previous years.

Obviously, in the very early years of backtesting, the results are much higher.

But it would help if you remembered that in those years, especially up to 2011, this market still traded most of the contracts in the pits and not electronically.

So, a lot has happened here over the years.

But all in all, this strategy, which was codified in 2017, was also able to maintain the trend in the post-development period it had seen in the development phase.

And at this particular moment in history, it has reached its period highs.

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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.