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#154: HOW TO CREATE A QUALITY STRATEGY IN 60 SECONDS

During more than 10 years of my trading career, I have never seen a more robust and reliable trading setup than the one I’m going to share with you today.

In fact, I dare to even call it a universal evergreen trading setup, because I’ve been trading its variations for almost 10 years over and over, and it still makes money.

Now, before I share with you what it is all about, one warning.

This strategy is for FUTURES INDEXES only. And it works LONG SIDE only. Indexes are a long-biased market, so it is totally ok to use this small built-in edge and explore the best, most universal and most reliable ways to use this to our advantage. Here it is:

1. Take yesterday’s close and add reasonable volatility to create a breakout entry-level,

2. Add exit at the end of the week and some reasonable stop-loss.

That’s it.

Let me show you what I mean.

Here I randomly took the e-mini S&P 500 market, 60-minute timeframe. And all I did was create this piece of code, reflecting the rules above:

Notice, that I used a multiplier of 2.5 for volatility (2.5 * AvgTrueRange). I chose this value arbitrarily, without any reoptimization, because it really doesn’t matter much what value you pick - you mostly arrive at positive results anyway.

Then I took another index market, e-mini Dow Jones. I chose the 30 minute timeframe (again arbitrarily, just to prove that the timeframe doesn't matter much either) and also changed the multiplier to 3 (again, totally arbitrarily). So it looks like this:

//Calculate the Entry Level

Breakout_Level = CloseD(1) + 3 *AvgTrueRange(14);

Again, an immediate positive result:

And one example more - I took the e-mini NASDAQ, arbitrarily picked the 120 minutes timeframe and used a multiplier of 1.5:

//Calculate the Entry Level

Breakout_Level = CloseD(1) + 1.5 * AvgTrueRange(14);

Again, a positive outcome:

Of course, it would be wise to add some potentially simple (ideally non-optimizable filter) to reduce the drawdowns and add a protective stop-loss too.

But either way, this is a very robust skeleton that I have been using for years and made (in a variety of forms) a bunch of money on. And it takes just 60 seconds to get it done.

And that is really all. Also, if you want to learn how to create way better strategies than this one, with smoother equity curves and good live performance, and very quickly too, I share a more complete framework from A to Z here.

Tomas

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."

"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,

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,

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,