Hi guys hi from Andre Unger.
Talking to a friend a question came out: “What markets do I like? What markets do I trade?”
So, you know I mostly trade Futures and the question “What markets I prefer” should have a double answer.
It should have one answer: “I like this market because I make gains!”.
But this is not the answer,I discovered that it’s not the answer and I discovered to prefer, to like, to be happy when my strategies are active on these markets, markets which are not performing well lately.
Maybe because these were the markets when I first started developing, maybe because these markets were very successful in the past, I don’t know, but as a matter of fact I happen to prefer markets where I’m not performing extremely well or in some cases even losing.
One on top of all is the DAX future.
The DAX future has always been addressed by me as one of the best futures to develop training systems for because, this is what I said or I used to say, it responds very well to a number of models.
I have plenty of systems but the truth is the in the last months I’m losing money on DAX future. Not only me, also some colleagues, other traders.
I’m talking to other automated traders.
They do lose money on DAX future, with different systems but still losing money.
So normally if we all lose it’s the market that is guilty!
This is not an excuse, it’s a point. It’s not really responsible let’s say, it means that probably this market is changing its characteristics, it’s becoming more efficient, responding differently to certain inputs. This is what’s probably happening to DAX future.
The problem is that is very difficult to identify these changes, what they are, when they occur and where they are leading to.
What will be the next identity of the market? Will the DAX future become like a MiniS&P? We don’t know, we can’t tell obviously.
It would be nice to tell looking two months from now this will change from here to here would be great because I would know exactly what you do in two months. I don’t know this and I can only guess.
The question is: ” Shall I adapt my strategies and imagine the new scenario so develop something that will focus on the new scenario and work well there or shall I keep my existing work and wait hoping, which is a bad word but let’s say, expecting that that market turns back to its previous characteristics.
But the changes are normal, they are in markets so they are in people. Maybe you have friends who change their attitude because of many factors, friends so that changing strengthen your friendship or make it go, so that you don’t hang around with these people any longer because you have no longer the feeling your had the same can happen with the market.
DAX is disappointing under this point of view in the last period just because it doesn’t respond well at all at my strategies.
Another market with a similar behavior, similar in terms of not leading to the expected profits is Crude Oil, which is again one of my favourite markets.
So if you ask me: “What are your favourite market?” DAX and Crude Oil! Or: “Are you making a lot of money?” No absolutely I’m losing money!
Crude oil is another market, I made a lot of money on Crude Oil in the past, but now current days, well current days it’s getting a bit better, but let’s say the last year it has been absolutely bad so I hope it’s going back as I see some improvement now in the results to its previous identity, but so far has not been working very well.
Consider also that mainly Crude Oil was responding well to breakout trend following and there is another market in the family of the energy futures which is Gasoline which is currently working very well so this is one of my favorites for the normal reason that I’m making gains on this market.
So if some of you want to investigate on the energy futures I suggest to have a look at gasoline because it’s not.
That said one of the markets I never liked is the Bund future, Europe Bund Future. I still don’t like it, but looking at my activity statements from my broker I see that it’s keeping on making money month after month, has been doing this for a long time.
It makes money consistently and on a regular basis, not a lot of money but enough of course and it responds very well to my strategies but I still don’t like it.
So I don’t like the Mini S&P 500. Also this case is making money a bit less because I had some trouble after recent volatility but it’s working well but I don’t like it.
So these two markets has something in common, Mini S&P and Bund Future, they are both very efficient, big volume, number of players.
So the point is that it’s very hard to dig into these markets to find inefficiencies because they are not there or they’re very hard to find and the models you use to trade them are very basic and they are always the same: buy on retracement, buy after a dip in the market, with some additional condition but maybe that’s the concept.
So you cannot use plenty of systems with many ideas, you have to use the same single approach. You cannot use two three systems with the same by on dips because you might buy here, buy here, but at the end of a day you’re doing the same thing so you are all exposed in one direction is not the right way to work.
So not having this flexibility with new ideas to come out it’s boring and that may be the reason why I don’t like them in spite of the money they are bringing in to my account, while I like the others taking money from my account.
Other markets where I have a neutral approach, I mean I don’t like and I don’t dislike them, are the Currency futures, Grains, there was a period where a liked Grains than I disliked them, now I’m neutral I said, and some others again like Meats but these are markets a bit useless to discuss openly because not so many people trade them.
So I said, it’s hard to say what I like or what’s the reason why I like it.
I like the DAX and Crude Oil in spite of the losses. I don’t like Bund and Eur Mini S&P despite of the gains. A bit crazy but this is true.
Ciao from Andrea Unger see you next time.