In reviewing the open P/L for the Recommended Spread Strategies, most are at a loss. I went back to September 2014 and then reviewed October, November and December. I just wanted to see the actual performance of those spread trades, many of which showed as 100% profitable. This is admittedly disappointing. Anyone else notice this? I am virtual trading at the moment based on several recommended strategies for January and they are also all at a loss. Is there something I am doing incorrectly in terms of my entries?
- Seasonality is not Holly Grail. Strategies have high probability winning, but seasonal windows are computer optimized based on history data. If something worked 15 times in the past, doesn't mean it have to work in future. - Seasonality can't be traded blindly based only on seasonal windows. Sometimes seasonality comes earlier, sometimes starts later, some years it doesn't work at all, some years it goes inverse. - You can also notice that there are only few strategies which went directly into profit in history. So why not to wait for better entry prices (check Avg. Worst) from backest, entry at SR etc. - There are times, when seasonality works very well for example for whole year for almost every market and you can make a lot, but you can be sure that it will be followed by period of time when it will not work well and everything will go against you - Our recommend strategies are selection from Search, for those who don't know how to select their own strategies from Search. Still you have to be picky, we prepare strategies two months ahead so we don't know what will happen with current spread. For example it's not really good idea to trade Crude Oil and it's products now because of strong fundamentals which cause inverse spread movement (even if strategy tells you 100% win) - Always use seasonality only as part of the trading system, you need to use basic price action too see how is current spread developing (also compared to previous years, where are S/R levels etc), having good money and risk management is critical.
If you are new to spread trading, I suggest you to look to our Partners section and take some education, it will help you a lot. Or read some book about it (for example from Joe Ross).
Originally we didn't have Recommend strategies. But some users complained about complexity of Search, so we introduced this section for them. These strategies are selected from Search based on some basic parameters plus little bit of discretionary decision. If somebody doesn't know how to get good strategies from Search, this can be starting point.