13 FUTURES MARKETS FOR AUTOMATED BREAKOUT STRATEGIES
Download FREE resources to boost your trading
SOTR images-05-Emini min.png
SOTR images-06-STU min.png
SOTR images-08-TMI.png
SOTR images-07-SFB min.png
SOTR images-02 v4.png
SOTR images-09-v3.png
SOTR images-03-MSA min.png
SOTR images-01-v3.png
SOTR images-10-Checklist.png
SOTR images-04-Adaptrade builder min.png
Automated trading strategies that work!

© 2015-2018 SystemsOnTheRoad.com. All Rights Reserved  | Contact | About Me | Privacy Policy

  • LinkedIn Social Icon
  • Twitter Social Icon
  • Instagram Social Icon

DISCLAIMER:  Futures trading systems and commodity trading bear a high degree of risk. People can and do lose money.
Hypothetical results have many inherent limitations. Past performance does not guarantee future results. 

 

ACTUAL RESULTS SHOULD BE VIEWED WITH CAUTION, BECAUSE PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

OUR NEW PLACE

I'm a paragraph. Click here to add your own text and edit me. Let your users get to know you.

#041: 13 FUTURES MARKETS FOR AUTOMATED BREAKOUT STRATEGIES

One of the frequent questions I keep receiving is what is the complex list of markets that are suitable for automated trading strategies. Let me give you a short overview of 13 markets that I know that you can develop interesting automated trading strategies for.

 

US Index markets: TF, EMD, YM, ES

 

American index markets are my specialization and I can confirm that for all, above mentioned markets it is not so difficult to find functional and high-quality automated trading system. I think that the most simple market where you can get good results quickly is EMD. Most of the strategies working in EMD market are (with minor changes) profitable also on TF market.

On YM market, you can get strategies with small stop-loss and it definitely is a market suitable for small trading accounts.

ES market can be rather challenging. Due to a high level of saturation of automated trading systems in this market, it takes quite a while to find an interesting and robust system. Still, it is not impossible, and, as a reward for your hard work, you can expect smaller stop-losses, which is making this market more suitable for small accounts.

 

EU Index markets: FDAX

 

I have quite a lot of experience with this European market. Its high volatility can bring some really nice profits, but if you are not careful enough, you can experience rather big drawdowns. In fact, it is not so difficult to create a system for FDAX market, when using time template with US trading hours (15.30-22.00). Using this time template, I have managed to create several breakout systems that can be profitably traded in this market. One of the systems I have created for FDAX market several years ago, is quite simple breakout model (my breakout models are, in general, not complicated) and it turned out that it is profitable also in US index markets and several other markets as well (see pictures below). Systems don’t have to be complicated to be robust, it is just necessary to be patient - as it takes some time to find simple systems that are robust.

 

(Simple breakout system for FDAX market at the time of creation).

 

US Bonds: US

 

I have never traded any of my automated trading strategies live in this market ( I specialize myself in US index markets), but creating an interesting, simple and robust automated breakout strategy can be done even in this market. I know several traders who are successfully trading US market and there is no reason to avoid it. The only challenge is to create a system with big enough avg. trade value. 1 tick in this market represents more than 30 USD, so transaction costs and slippage can have a big impact in the live equity curve. So keep that in mind.

 

(The same breakout system as on the picture above - this time applied in US market, at the time of creation).

 

Energies: CL, RB, NG

 

I have quite a lot of experience with energies as well, especially with trading CL and NG markets. To trade these markets you need a bigger trading account, they tend to be quite volatile time to time, but creating an automated breakout strategy is not so difficult. The “secret trick” here is to experiment little bit with time templates - as they can have really big impact on the final results. So again - you need to be patient little bit and don’t be afraid of experimenting.

In general, I have also quite interesting results in the RB market, but the downside of this market is really low liquidity, which is the reason why I haven’t started live trading with any of my systems.

Some of my students are also experimenting with energy markets and according to some systems that I have seen, I can tell that I am not the only one who can create really robust automated breakout strategies for CL and NG markets. One of the CL strategies of one of my students, you can see here.

 

 (The same system as on the pictures above - this time for RB market, at the time of creation).

 

Grains: Wheat, Corn

 

These markets can be little bit challenging for creating breakout systems and I personally have had just a partial luck when developing systems for these markets. I have managed to find a couple of models, but it requires already advanced know-how. And I have seen several successful systems for these market from my students as well.

Personally, when it comes to grain markets, I am little worried about one issue - they tend to get little bit “crazy” time to time and there can be a limit move. So, when working with these markets, the approach needs to be more sophisticated and I highly recommend to have an advanced system for risk management, that will, for example, quickly decrease the number of contracts (or turns the system of completely), as soon as the volatility increases rapidly. Luckily, the limit moves are often preceded by volatility increase, so you can predict it and react in advance. Besides this specificity, grain markets have quite an interesting potential for automated breakout strategies.

 

Softs: Cotton, Sugar

 

I must admit that I don’t have much experience with these markets. But I know that several of my students, that are using advanced know-how, were able to build interesting and robust breakout strategies even in these markets.

I was experimenting with sugar market in the beginning of my automated trading career and I think that this market gets really interesting when you decide for position trading. Position traders have, in this market, much more possibilities how to get an interesting breakout automated strategy.

 

In general, it is always easier to search for long trading strategies rather than short trading ones. I myself build strategies trading long and short in separate ways.

 

Happy Trading!

 

Tomas

 

 

 

Please reload

Author: Tom Nesnidal (more about me
Join 15 000+
LinkedIn Followers
Join 5 000+
Twitter Followers
Get Social With Tom
  • Black LinkedIn Icon
  • Black Twitter Icon
  • Black Instagram Icon
  • Black RSS Icon
What others are saying

"Tomas is one of the most creative traders I know. He is able to generate unique trading ideas and elegant solutions to system development challenges."

Andrew Swanscott, BetterSystemTrader.com

"Tomas has been a professional trader for more than a decade and I have had the privilege of monitoring his accounts in action since 2006. His systems are performing as some of the best I have ever monitored and executed. I have been in the trading industry since 2002 and worked with many developers from all over the world. Tomas is definitely the one to consider."

Martin Lembak,

Systems Trading Expert,

MFRM, CAIA 

"Tomas is a professional trader, who for the last 10 years has specialized in developing trading systems. We have been tracking his trading systems for about 5 years and they generally show very robust, stable and above average performance. Striker is pleased to work with someone like him - a real professional with enthusiasm and deep knowledge of trading."

William Galwas, President Of Striker Securities, Inc 

"Personal consultation with Tom helped me to re-evaluate the complexity of my robustness testing and optimization processes. Plus, it has helped me with a specific plan on how to take things forward. It has given me some great ideas on how to avoid overfitting and make my testing more robust and provided tips on low hanging fruit in terms of the best markets to trade for intraday/short-term breakouts."

Craig Peters,

semi-advanced trader,

United Kingdom 

"Tom's approach to Automated Trading Strategies design, tests of robustness and portfolio diversification is really unique. He has been a professional trader for many years and the depth of his understanding of Breakout strategies and Market Internals is hard to find elsewhere."

Antonin Fisher,

Hedge Fund Manager,

Czech Republic 

"Tom´s systems and trading approach do really work and can bring good, stable and reasonable returns. I can highly recommend him as a teacher."

David Hruby,

Trader, Czech Republic 

"Tomas is truly an inspiring mentor and great trader with a positive life attitude. He has got very deep understanding of markets, breakout strategies, robustness testing procedures, and Market Internals."

Jan Lesanovsky,

Client, United Kingdom 

"As an experienced trader, I used Tomas´s consultation to get more clarity on best-practise robustness testing procedures, risk management, and portfolio management. He was quickly able to help me refine my current trading and system development approaches, and pointed me to really practical measures that I could implement immediately. I found Tomas to be not only extremely knowledgeable but very helpful and a great teacher. This has given me more confidence in developing robust strategies that work, and I would recommend his mentoring as extremely valuable for any systems trader."

Trevor West,

advanced trader, Australia 

The author of this trading blog has been featured on: