#011: MY STUDENT'S STRATEGIES (CASE STUDY #1)
After several years of teaching how to build automated trading strategies and how to trade them, I already have a lot of successful students. Some of them use the trading profits as an extra income, they buy a better car or go for a nice holiday. However, most of them trade because they want to quit their 9-5 job and do what they love - become full-time traders.
A couple of years back, some of them didn't know anything about trading. And yet, today they have their own portfolios, quit their jobs and travel the world. In order to show you what they have managed in a couple of years, I would like to present you some of their best strategies. If they have done it, you can, too.
For today, I have chosen a strategy by Antonin F., called Luke.
Here is the basic overview:
Market: E-mini S&P MidCap 400 (EMD)
Main time frame (data1): 30-minute
Secondary time frame (data2): daily
Time template: 08:30-15:00 exchange time
Exit: stop-loss or at 15:00 exchange time (avg. winning trade +492 USD)
Stop-loss: 500 USD (avg. losing trade -376 USD)
This breakout strategy has 3 entry conditions - on data1, on data2 and a time filter. The strategy was developed in 2014, it passed all robustness tests that I teach my clients, it trades both long and short, and the developer has been trading it live for over 2 years with constant profits.
This is the equity assembled from 10 Out-Of-Sample intervals (data that were not used for development of the strategy, the equity reflects only the unknown future and gives very realistic equity, not biased by overfitting or over-optimization). As you can see, all intervals are profitable:
In this table you can see the basic performance characteristics:
The drawdown 5,660 USD can be a little too high for some of the traders, but you need to see that in 2008, when the drawdown happened, the strategy had the 13,740 USD profit - that is more than twice as much as the drawdown.
By the end of each year, during the last 12 years’ period, the strategy was always profitable and the annual profit was between 2,000 and 19,630 USD with an average profit of 11,790 USD per year.
We are still talking about Out-Of-Sample data, real profits, this is not curve fitting.
And it gets even better - the system works not only in EMD market, it works also in other markets, such as S&P 500 (ES) or Russell 2000 (TF). The general profitability of the system with the same parameters also in other markets (the equity doesn't have to be perfect) proves that the system is really robust and stable - as these markets from the same market category (emini stock index futures) represent another form of an unpredictable future.
Here is the equity of the system in TF market, 30-minute time frame - without any optimization, using the same parameters as for EMD market:
And this is how it looks in ES market (also 30-minute time frame):
Apparently, both equities are not perfect, but they are still profitable and with a little extra work you can trade also other markets and have a small portfolio to diversify and to manage your risk better. All this with just one system.
As you can see, in a couple of years you can become a pro-trader and live the life you have always dreamt of. I did it, many my students did it, you can do it, too. Never give up on your goals!
You can learn more about the workflow I teach, by clicking here to start creating your own similar systems today.
Happy trading!
Tomas
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