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As you already know from previous articles, in most cases it is easier to create a long-biased strategy. But to have a balanced portfolio, you should have roughly an equal number of long-biased and short-biased strategies. And today I would like to present you with such a strategy.

It has been created for the Soybean market and originally it was for trading both long and short. But the long side had a profit factor that was too low, so the creator decided to trade on the short side only.

And the short side is really looking good - the profit factor is 1.98, the net profit is almost $34,000 in 7 years; that is over $4,800 per year on average, the maximum drawdown is $3,737, and annual net profit to drawdown is 1.3.

Here are more details:

  • Market: Soybeans (S)

  • Main time frame (data1): 15-minute

  • Secondary time frame (data2): Daily

  • Time template: 8.30 - 13.15

  • Profit factor: 1.98

  • Win %: 59.36%

  • 119.48 USD

  • Exit: stop-loss or at 13:15 exchange time (avg. winning trade +406.10 USD)

  • Stop-loss: 2,000 USD - only protective, barely hit(avg. losing trade -318.63 USD)

Based on the numbers, it looks like a nice strategy - a profit factor of almost 2.0, 6 out of 10 trades are profitable, average trade of almost $120, drawdown below $4,000. Does the equity of this system also look as good as the numbers? Let’s take a look:

You can see that the equity rises pretty steadily, there aren’t any sudden profits or losses, the profits are distributed throughout the time and when it got into the drawdown, it managed to recover pretty quickly.

The arrow that marks “LIVE” is when the developer started trading this system live. According to Murphy’s law, every time you start trading live in any system, it starts with a loss. And this case isn’t an exception. The developer started live trading on a high equity at about trade #242 and had to wait until about trade #268 to finally see profits. Since the system makes about 40 trades per year, it means that it was about 9 months waiting for the system to get profitable. But it was worth it.

Let’s take a look at more numbers:

Short-biased systems usually have a lower number of trades. And so does this one. 283 trades in 7 years is about 40 per year. And it is an absolute minimum I want to see when developing a system.

How does this system perform in other markets? Let’s take a look at the 15-minute Corn.

The first half of the equity curve is profitable, the rest is mostly losing, but after the $4,000 drawdown at trade #200, it has a rising tendency again. So it is not so bad for a different market.

Now, how about another market from grains - the 15-minute Wheat.

We can see similar results - profitability in the first half and a rather flat second half. It is far from a tradeable strategy, but this is still an acceptable result.

As you can see, it is also possible to create a nice, short-biased strategy. It is not as easy as long-biased, but it can be done. And it doesn’t need to be complicated. All you need is 5 lines of code.

Click here to learn more about the workflow I teach and start creating similar systems on your own today.

Happy trading!


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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,

"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,


"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 

Author: Tom Nesnidal (more about me
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