Our Futures Trading Results. Week 37 2021

Summary:

  • Our week in the markets using COT Strategy: -$8,960
  • Our week in the markets using Champion COT Strategy: -$4,620

 

 

Welcome to InsiderWeek. My name is Max Schultz and in this video I’m going to show to you our trades from week number 37 and the corresponding results. For this week in total we had a loss of -$13,580. In our COT 1 strategy we made a loss of -$8,960. By that our drawdown now increased to approximately -$77,000 which is equivalent to 12.5 percent of our account size. From our experience we know under which market conditions such drawdowns happen. We know the strengths and the weaknesses of our strategy and by knowing what to do to make the strategy more robust and even more profitable we can improve our overall strategy. Our relation to drawdowns per se is twofold. Obviously on the one side we hate drawdowns from an emotional perspective on the other hand side we like such situations because it helps us to become better, stronger, and it helps us to improve even quicker and become more robust and even more profitable. So in total our relation to drawdowns is twofold: We dislike it and we love it at the same time. From our experience with our strategies we have the capabilities and the experience to know how to handle such situations and the current market conditions. Currently we work on additional tools to also cover these current market conditions to delete weaknesses for the future when such market conditions return. Now let’s have a look at our portfolio at the beginning of the week. At the beginning of the week our portfolio consisted of two open positions. One trade that we had for a long time was the 30-Year T-Bonds. Here we were short by four contracts. The slide shows that we were in the win however this trade came from a rolling contract and the contracts that we closed before were in the loss. The second trade was in New Zealand Dollar where we were long by seven contracts and during the week we were stopped out in both positions. We didn’t make any new trades and as a result at the end of this week we have an empty portfolio. Let’s have a look at the trades individually.

First trade in the 30 year t bonds: Here we can see that we received four sell signals in a row and the latest sell signal confirmed the previous sell signals. On the weekly chart that looked very promising and bearish. On the daily chart you can see that we were in a range market for a while and in a range market the amplitude of the price swings can increase and by an increase in the amplitude the probability to get stopped out is increased. In the trading membership area we told you that there are two possibilities how to handle this trade. On the one side you could try to get stopped out with a minor loss or on the other hand side you try to get stopped out at break-even. We also aimed for break-even but the price never came back to the break-even point again. And although you can see a pretty high entry you know that this order came from rolling contracts such that our true entry level was even lower. By the decision of getting stopped out we realized a total loss of -$3,500.

Next market: New Zealand Dollar. Here we received a buy signal in the weekly trend direction and if you follow our channel for a while now you know that we like those kind of signals. On the daily chart you can see that we were triggered according to our plan in our entry pattern. However price decreased just after we were triggered and it decreased further and in this example you can see how important it is to have a stop loss.

In our second COT strategy the so called champion strategy we started into the week with an empty portfolio and we closed this week with an empty portfolio as well and during the week we made one trade that we will have a look at now. The trade we made was in copper and as you can see just the day after we were triggered we were stopped out again. Such things can happen if you use small stop loss ranges and it is of highest importance to be mentally robust to get into new trades after such things happen. In the champions strategy we realized a loss of -$4,620 by making this trade. This loss is acceptable because it was calculated before doing the trade. As it is according to our trading plan there’s nothing to add here.

Now let’s have a look at CRB index as usual. As you can see CRB index made a new high. So nothing changes in our expectancy. We expect further increasing commodity prices such that our general expectancy is bullish.

Now let’s have a few more words on our drawdown experience. As you can see from this chart both our strategies had an equity curve that was stable from May onwards. Thanks to introducing our second COT strategy that was implemented in November 2020 we were able to stabilize it. From COT 1 you can see our high namely our last all-time high in May. From that point onwards our COT 1 strategy faced decreasing equity. There is no life without drawdowns. If you as a trader did not have drawdowns yet be prepared for the next drawdowns because it is surely coming. They are simply part of life. This is our sixth drawdown in our complete trading history and such a situation will come to you as well. That is part of life. The diversification strategy helped us and lead to a total equity curve stabilization but for COT 1 our equity decreased since May. This was 12.5 percent since the last all-time high. Although this number seems to be not catastrophic it is nevertheless the largest drawdown in our history. In the past we observed drawdowns of a maximum of 9 percent. So this comes through the new market phase of constantly increasing commodity prices. It is important if a drawdown appears to know where it appears and where it is normal and where it is actually appearing due to new market conditions. Here we face two opportunities to take. First a trader can decide to sit through new market situations until the next market phase appears that is profitable again. For me as a professional trader however, I’m deciding for the second option – to adjust the strategy to the current market conditions. Of course such a process is very sensitive because we don’t want to make the strategy itself worse for other market conditions. Of course I have much experience and I fully understand the strategy itself. As a result we have those adjustments at hand that make the strategy work equally well in all kinds of market conditions and currently we are working on exactly that and we have the solutions that will lead to more robustness and to significant profits in such market conditions. Currently we make different tests and compare scenarios to find the best variant and as soon as we implement it we will show that to you in detail in our coaching program and then we will train our coaching participants accordingly. Of course our coaching participants have the unique opportunity at the moment to see how such a process works professionally. If you walk on the path to become a professional trader you will come to such a point sooner or later. Now is the time that our coaching participants can learn from our process and can learn from us how the adjustment is made, what the steps are in detail, how difficult conditions are overcome, how we learn from them, and how to prepare for the future. If such situations come in the future they will know exactly what to do. This drawdown is a chance and I’m happy once the sixth drawdown in my career is successfully completed.

HERE you can find a summary of all individual trades and a comparison of the results of both strategies:

 

 

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Always be aware of the risk because risk management is the key to success in trading.

Max Schulz and
the InsiderWeek team