Day Trading and a new Program for CTA

Posted November 7th, 2019 by Trendfinder and filed in Articles / Announcements

Since swing trading the last few years has not been good (it’s been pretty horrible), I have shifted my focus to only intraday trading. I also really like the risk control day trading (exit before end of day, no trades held overnight) provides compared to swing trading (where trades last an average of one week and are vulnerable to overnight gaps). I recommend the Day Trader portfolios (especially Day Trader I), and I may even stop offering the swing systems and Index Trader portfolios.

In addition to Trendfinder Trading Systems, I have a separate company called Camkay Capital Management, which is an NFA registered Commodity Trading Advisor (CTA). To keep the companies completely separate (compliance reasons) I have never mentioned that company here. However, I think that is a disservice to not let you know about it. So, for this one time, I will provide some information!

Camkay launched a new program in September called Crisis Alpha Intraday. Here is the NFA approved program description: Crisis Alpha Intraday attempts to take advantage of excessive stock market intraday movement during volatile markets. Low volatility periods are avoided, and there can be months with no trades. Since trades are only taken during environments when the stock market has typically declined, this program can provide hedging abilities for those that are invested in equity markets. Trades are generated on the emini S&P 500 futures with proprietary algorithms, and all positions are closed before the end of the day.

To find out more, please go to https://www.camkaycapital.com/. For information about the program, go to the “Strategy” page. Go to the “Program Information” page for performance and newsletters.

Day Trading Portfolios available

Posted September 2nd, 2019 by Trendfinder and filed in Articles / Announcements

With the dynamics of the stock market over the past few years, trading with swing systems (trades that last around 1 week) has been precarious. Yes, there have been some winning trades, but there have been many times were a Trump tweet caused trades that were in good shape to be stopped out.

On the other hand, this increase in volatility is great for day trading systems! I’ve put together four portfolios that combine only day trading systems. These portfolios provide more risk control since they do not hold trades overnight. I think these portfolios might be a great choice given the current political environment. Performance information can be found here: http://trendfindertrading.com/portfolios.html

When to start a system – now?

Posted July 5th, 2019 by Trendfinder and filed in Articles / Announcements

I received a great question from a subscriber that I want to share with you. Below is the client’s question and my answer.

The question:

I have been wondering if it might be a good idea to buy another contract of ITV. The first half of 2019 has been tough for that system. However, it’s overall track record is quite good. Now may be the low point for the system as it goes on to return to it’s normal performance. Every system seems to have occasional losing streaks. The only reason it would not return to normal performance is if something in the markets it trades has fundamentally changed. This is something that you look at all the time and I don’t recall you mentioning anything along those lines.

I would be interested in your opinion. If you don’t want to give one, I understand. I am 70 years old and have been slapped around and kicked around enough by life to know that the outcomes are always my responsibility and not someone else’s.

My answer:

First of all, I would say that adding now versus adding when the portfolio hits new equity highs is the better choice in my opinion. One big frustration in this business is that clients start after a good run and then quit when there is a bad period. This is a virtually guaranteed way to lose money over the long run. It can be very hard to do but starting when there have been losses is much better with one caveat, that the strategies are still viable. I think you understand all of that and ask exactly the correct question. Kudos to you! It’s very refreshing to hear the right question being asked.

For swing trading, since Trump became President, it does seem something changed in the market. It may just be a coincidence though because the FOMC also became more hawkish around that time too. Either way (or because of both), the level of mean reversion in the stock market changed. The typical pullbacks weren’t the same amount or duration as before. This observation is what led me to make the swing systems dynamically adjust. I think this alteration greatly improves their robustness. The one caveat is that when Trump tweets, all bets are off. For instance, May would likely have been a profitable month if he hadn’t increased tariffs out of the blue. On the flip side, the FOMC has turned more dovish, which likely increases the likelihood of mean reversion trading improving.

For day trading, Trump and the FOMC were beneficial since they increased volatility. With trade wars likely to persist, the global economy not exactly booming, and Trump being unpredictable, volatility will probably remain higher than it was in 2013-2017. If that is the case, then day trading should continue to be profitable. Also, I am especially happy that I’ve been able to replace older underperforming systems with new ones that also provide more diversification. Spring ES has so far proven itself in live trading, and Bandwagon ES looks very promising based on testing and my personal live trading before releasing it.

Looking back, there have been fundamental changes in the market (FOMC and Trump). These changes were detrimental to performance for the swing systems the past couple of years and beneficial to the performance of the day trading systems. One change going forward (FOMC becoming dovish) should benefit the swing systems. Trump is likely not changing, so volatility should help the day trading systems. Although there is no way to say this with certainty, my view is that the foreseeable future looks like a good fit for these trading systems.

Thanks,

Gary

Bandwagon ES – new day trading system

Posted June 12th, 2019 by Trendfinder and filed in Articles / Announcements

I’m excited to let you know that Bandwagon ES has been released. During periods where large intraday moves are more likely, it will look to “jump on the bandwagon” when the market is heading up or down convincingly. For determining what days to trade (where large moves are more likely), it uses different filters than all of the other intraday systems, providing better diversification. Most trades are entered within the first hour after the stock market opens, and it looks to hold all day. There is a stop loss, a trailing type of stop and end of day exit. It is a very straightforward system, and it performed exceptionally well on out of sample data. It was profitable every year including 2019 YTD.

The website has been updated ( http://trendfindertrading.com/bandwagonES.html). Bandwagon ES is included in all of the Index Trader Portfolios. It replaces Spring ES in Index Trader I and II, and it replaces Leopard Vol in Index Trader III, IV and V. All available hypothetical performance info through yesterday is below. Past performance is not necessarily indicative of future performance. Full report: Bandwagon ES

New day trading system coming

Posted June 7th, 2019 by Trendfinder and filed in Articles / Announcements

I’m excited to let you know that I will be releasing a new day trading system next week. It is called Bandwagon ES. During periods where large intraday moves are more likely, it will look to “jump on the bandwagon” when the market is heading up or down convincingly. Most trades are entered within the first hour after the stock market opens, and it looks to hold all day. There is a stop loss, a trailing type of stop and end of day exit. It is a very straightforward system, and it performed exceptionally well on out of sample data. It has been profitable every year including 2019 YTD.

I will update the website next week, and it will be included in the Index Trader Portfolios (likely replacing Leopard Vol). For now, the summary and equity curve are below. Past performance is not necessarily indicative of future performance.

A comment about Spring ES

Posted March 10th, 2019 by Trendfinder and filed in Articles / Announcements

Spring ES and the other daytrading systems haven’t had a trade since January. I’ve had a few ask about this, so I am posting this for everyone.

Spring ES and the other daytrade systems avoid periods where volatility is low. These periods (like now) are poor conditions for day trading. The potential for profit is low because the market moves are small and choppy, and therefore the reward/risk ratio is very poor. Trading during low volatility periods is only beneficial for the broker (and not really even then, because people will stop trading the system because of the losses). October-December 2018 had very high volatility, so Spring ES had trades almost every day. When volatility picks up again, Spring ES will be more active again. When the odds are not in your favor, it’s better to not trade at all than trade just to trade. One edge we have as traders is that we get to pick when to trade. A good analogy is that it’s better to only swing at strikes than try to hit every pitch (only swing at the fat ones).

Patience is definitely a virtue in trading. We can’t control the markets but we can control when we trade.

New swing systems and updated portfolios

Posted February 8th, 2019 by Trendfinder and filed in Articles / Announcements

The website has been updated for the new swing systems and portfolio combinations. FedSwing is resurrected with a walk-forward update, MeanSwing and SimpleSwing became dynamic/adaptive, and SentSwing is retired. I will be sending the code and charts to brokers this weekend.

For FedSwingWF, I changed one parameter and used a walk-forward method for when the FOMC changed methods to fulfill their intentions. For example, until 2014 they utilized open market operations (POMO), then they stopped POMO and started utilizing a balance sheet reduction (SOMA). Going forward I will adjust the measures used by the strategy when the FOMC changes their methods.

MeanSwing3 adjusts parameters based on volatility. The overall profit is lower now but the drawdown is much lower. Also, the performance is much more consistent over time. With dynamic parameters, the entry timing was improved so much that I was able to reduce the maximum stop loss from $5000 to $3000. With the reduced number of trades, better timing, and reduced stop loss, the probability of a very large drawdown in the future is reduced.

SimpleSwing2 also adjusts parameters based on volatility. I also added a trailing stop and adjusted the filter for shorts. Similar to MeanSwing3, performance is much more consistent over time.

Take a look at the new systems at http://trendfindertrading.com/systems.html and the portfolios at http://trendfindertrading.com/portfolios.html. FYI, you may have to hit shift+F5 or ctrl+F5 to refresh the pages.

Discontinuing Index Swing Portfolios

Posted October 26th, 2018 by Trendfinder and filed in Articles / Announcements

The stock market character has changed over the past few years (especially this year), and mean-reversion type of swing systems are not performing well. They are now best used when combined with daytrading systems. Because of this, I am discontinuing the Index Swing portfolios.

Updated Portfolios

Posted August 16th, 2018 by Trendfinder and filed in Articles / Announcements

With the new addition of two daytrading strategies, I took the opportunity to completely reorganize the composition of the portfolios. I used a quantified combination of performance and correlation to determine the best combinations. You can see the performance of these portfolios on the website here. Going forward these are the compositions that will be used:

Index Trader I: MeanSwing II EMD, Spring ES

Index Trader II: MeanSwing II EMD, SentSwing II RTY, Leopard Vol, Spring ES

Index Trader III: MeanSwing II EMD, SentSwing II RTY, SimpleSwing ES, Cheetah Vol, Leopard Vol, Spring ES

Index Trader IV: MeanSwing II EMD, SentSwing II RTY, SentSwing II YM, SimpleSwing ES, Cheetah Vol, Leopard Vol, Spring ES, Tiger Vol

Index Trader V: MeanSwing II EMD, MeanSwing II ES, SentSwing II RTY, SentSwing II YM, SimpleSwing ES, Cheetah Vol, Leopard Vol, Lion II Vol, Spring ES, Tiger Vol

Index Swing 2: MeanSwing II EMD, SentSwing II RTY

Index Swing 3: MeanSwing II EMD, SentSwing II RTY, SimpleSwing ES

Index Swing 4: MeanSwing II EMD, SentSwing II RTY, SentSwing II YM, SimpleSwing ES

Index Swing 5: MeanSwing II EMD, MeanSwing II ES, SentSwing II RTY, SentSwing II YM, SimpleSwing ES

Index Swing 6: MeanSwing II EMD, MeanSwing II ES, SentSwing II RTY, SentSwing II YM, SimpleSwing ES, SimpleSwing NQ

Along with updating the portfolios, I also retired SentSwing II NQ, Jaguar Vol and Lion III Vol. I have several new daytrading systems in incubation. When those pass final testing, I will release them, update existing portfolios, and create portfolios of only daytrading systems.

New Intraday System – Cheetah Vol

Posted August 16th, 2018 by Trendfinder and filed in Articles / Announcements

I am releasing Cheetah Vol today. It is an intraday system that has some similarities to the other Vol systems. The biggest difference is that it starts taking trades 45 minutes after the open, whereas the other Vol systems start around 2 hours after the open. Performance summary below, and full report is here.