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What type of strategy performed best on Gold in 2021?
In terms of our portfolio, the two strategies that produced the best results are of a bias type.
These strategies open and close long and short positions at certain hours of the day based on Gold's recurring intraday behavior. Moreover, the first strategy also features a confirmation mechanism.
Watch the video now to learn about the conditions behind these strategies and how they performed in 2021!
Enjoy the video! 😎
Hey everyone, it's good to be back. One of the coaches of Unger Academy here, and welcome back to our discussion on the strategies of our portfolio that have performed the best in the last week.
Now, in this first video of the new year - 2022 - dedicated to the analysis of our portfolio strategies, we’re going to be talking about a market that gave us great satisfaction in 2021 and, more in detail, about two strategies that performed very well. Actually, they were the top strategies of the year for this market. Both of them share an underlying bias logic, so instead of trying to enter on breakouts or take bounces for example, we simply enter at certain hours of the session.
Let's start with the first strategy. It is a breakout strategy on hourly bars that exploits the bias that characterizes the Gold session. In fact, during the first part of the session, this market has a tendency to go down, while in the second part of the session, it tends to rebound and recover lost ground.
This strategy is based on a 60-minute timeframe, so it uses hourly bars, and is a bit more complex. As for the long positions, they are opened when there is a break of the previous bar within a predefined timeframe. This time frame runs from the 16th bar to the 17th bar. So, if between these two bars there is a breakout of the previous bar, then we will open a long position.
The opposite is true for the short position. Since we are entering in the night hours (because the time frame starts from the 6th bar and lasts for 3 hours), it will be harder to validate the breakout because there are generally no major movements during the night hours that give clearer indications.
Consequently, instead of waiting for the breakout of the previous bar, as was the case for the long position, we wait for the breakout of a channel made up of the last 4 bars.
This strategy worked great in the past year. Note that the equity curve of the long trades lost, while the equity curve of the short trades performed very well overall, especially considering that the buy and hold was somewhat negative in 2021. So this strategy, and more in particular the short side of this strategy, was able to take advantage of these movements.
Let's also take a look at the annual performance report. In 2021, there were 86 trades that generated a profit of about $15,000, net of commissions and slippage.
So here's the question: why don't you give it a try? Also, remember that in one of our next videos, we'll show you how to build a breakout strategy for Gold on hourly bars, so don't miss the next couple of videos, which is why you need to subscribe.
Let's move on to the next strategy, which is similar and based on the same underlying concept: the bias existing on this market, which provides a rise in prices in the second part of the session and a decline in the first part of the session.
Unlike the first strategy, this system enters much more often. So, no breakouts are needed, no confirmation of the underlying bias of the Gold market. So, it simply enters long positions if the market is not excessively down and vice versa, it enters short positions only if the market is not excessively up.
In this case, we rely on tested rules, which means that we go long at 10 am. Please remember that we always refer to exchange hours. So, since we're trading the Gold future, the exchange time corresponds to New York time. As for short trades, we open them at 2 am, exchange time again. So we close the long trades 5 minutes before the short entries, thus at 1:55 am, and then close the short positions at 9:55 am, thus 5 minutes before going long.
As you can see, this strategy is really simple and entries occur only at specific times of day. As I've already told you, it made more trades than the previous strategy. We have a total of 143 trades in one year. Quite a lot, you know. Anyway, it succeeded in making really good profits. In 2020, it went through a tougher period you know, it limped a little bit, but in 2021 it recovered very well.
So guys, I really suggest that you try it as well!
Here is the equity line of the strategy, and as you can see, it's reached an equity peak and now it works pretty well and exploits a bias that has been present in this market for some time now.
So go and give it a try! Try both the breakout strategy on hourly bars and the simple bias strategy that uses the times of day as entry conditions.
And please, let us know your thoughts in the comments below.
Also, in the description of this video, you'll find a link that'll take you to a webinar by 4-time world trading champion Andrea Unger who will explain step-by-step how you can become successful with trading systems.
Thank you so much for having watched this video to the end, we really do hope it's helped you!
Best wishes for a very Happy New Year. We will see you soon! Bye-bye!
Need More Help? Book Your FREE Strategy Session With Our Team Today!
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.