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Qu@nt@rb from fu7ures-d@[email protected]


john.maddog.doe

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QuantArbES trades. Odd though it doesn't Monday & Tuesday. Assuming you know how to set up and run a strategy in NT, do note there is an 'Enable Trading' true/false setting within the strategy settings that needs to be changed from the default of False.

 

If you're not familiar with NT strategies, note you cannot have the Chart Trader active on the same chart that you are running the strategy on. You can though open another chart for ES, and have the Chart trader trader turned on there, which will allow you to see the pre-placed exits and entries that the strategy is planning, as price moves towards them

 

Also, it is intended to trade ES at London start through to NY close. The default trade times within the strategy are for GMT. NT of course displays chart time in your local time zone. Thus, if you are NY/EST time, set the trading start to be 3am (30000) and the close for 4pm (160000) with the flatten 10 min after that. It is to be placed on a 5M chart; the author recommends 3M, which can impact position exit, as that occurs on a bar close.

 

It does not necessarily need a ATM strategy, but if you set one up, it should override what is in the strategy itself. Note the default stop size is 48 ticks, which is $600 - the author has determined this is supposed to be optimum in ES over the years (presumably), but note that it is not uncommon for ES to range 6 points or 24 ticks in one NY session, so a $600 loss if you get caught upside down can hurt.

 

I ran it against the week of August 19, through to the Friday close. For that specific week it did not come out overall profitable for it's 3 trading days. It lost $575 - you can see the daily loss in the Net column, with other trade stats below. I ran it on a 5M and 3M chart, and the exits seemed the same, or at least the PnL was. Here is a chart for that week showing snippets from the NT performance tab(s) which I have inserted in the ES chart of that week, showing all take trades. I will run it against August and see what comes out, and post that later, perhaps along with some different exit or stop-loss parameters.

 

(This is a 2 screen wide chart ... if you use Chrome, right click to 'open image in new tab' and you can see the price action chart as well.)

 

P.S.- This is run under 64-bit NT, thus it is using the 64-bit educated DLL. :)

 

http://img138.imageshack.us/img138/9435/m5qaaug1924.gif

Edited by osijek1289
fixed graph, added P.S. re 64-bit
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I ran August 1-31, with the default 48 tick or 12 point ES stop-loss, and it's not a winning month. Although there are 23 winning trades of 40, the wide stop-loss killed most of the profits. Interestingly, 3 of 5 weeks are profitable (I am saying 5 weeks since Aug 1 was a Wednesday and it only starts trading Wednesday).

 

I'm pretty certain this can be made profitable for August, but that's only with the benefit of hindsight and curve-fitting, and that these days rarely lasts. August was a bit of an odd month (I trade ES regularly), and there is usually a big difference between summer trading and fall/spring. One guideline that can be used in ES trading is a 10 point handle rule (www.mrtopstep.com/trading-101/) - interestingly it is the numerous 12-handle stop-outs that cost a dear $600 during this trading month, using this QuantArb strategy. Knowing that August was an up month, and the fund buying that was being discussed, these 12-handle dips are essentially pros searching out weak longs; I suspect extending the stop-loss another few handles would have significantly changed the August results, but, the risk becomes bigger in a number of ways, with a potential $750 or $900 SL, and generally is not a wise way to trade (ie., being upside down for a turnaround that may or may not come.)

 

Here are the Aug 1-31 results then. Overall, it's $-350 in the hole, which isn't too bad. Not sure if I will give it some more run throughs ... this can be made to work for August, but, usually, in doing so, one breaks other months, and, knowing June/July and prior was very different, I suspect there was profitability for those months, which would be impacted by tinkering with these values.

 

 

http://img222.imageshack.us/img222/5024/aug131esquantarb.gif

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  • 4 months later...

any more forward test of this strategy ?

I ran August 1-31, with the default 48 tick or 12 point ES stop-loss, and it's not a winning month. Although there are 23 winning trades of 40, the wide stop-loss killed most of the profits. Interestingly, 3 of 5 weeks are profitable (I am saying 5 weeks since Aug 1 was a Wednesday and it only starts trading Wednesday).

 

I'm pretty certain this can be made profitable for August, but that's only with the benefit of hindsight and curve-fitting, and that these days rarely lasts. August was a bit of an odd month (I trade ES regularly), and there is usually a big difference between summer trading and fall/spring. One guideline that can be used in ES trading is a 10 point handle rule (www.mrtopstep.com/trading-101/) - interestingly it is the numerous 12-handle stop-outs that cost a dear $600 during this trading month, using this QuantArb strategy. Knowing that August was an up month, and the fund buying that was being discussed, these 12-handle dips are essentially pros searching out weak longs; I suspect extending the stop-loss another few handles would have significantly changed the August results, but, the risk becomes bigger in a number of ways, with a potential $750 or $900 SL, and generally is not a wise way to trade (ie., being upside down for a turnaround that may or may not come.)

 

Here are the Aug 1-31 results then. Overall, it's $-350 in the hole, which isn't too bad. Not sure if I will give it some more run throughs ... this can be made to work for August, but, usually, in doing so, one breaks other months, and, knowing June/July and prior was very different, I suspect there was profitability for those months, which would be impacted by tinkering with these values.

 

 

http://img222.imageshack.us/img222/5024/aug131esquantarb.gif

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