The B&W system has not been featured prominently over the past year. However, it continues to fire off winning trade entry signals on all markets, on all time frames.
The charts, trades and results below show the NQ traded on a 6 tick range bar chart: both long and short using the B&W uptrend buy 1st and B&W downtrend sell 1st signals, from the start of the 2016 trading year 5th Jan 2016 until 21:00 Gmt on the 13th of January 2016.
Both long and short strategies were run separately but simultaneously, normally only one strategy would be in a position, however on occasions both strategies had active positions
One NQ futures contract was bought or sold on each trade entry. There was no pyramiding or optimisation of signal parameters , trade targets or stops.
Each trade ran until it is stopped out by a hard stop, a trailing stop or a profit target.
This was not a back test.
The trades were live/real time (sim acc) so slippage is accounted for in the trade entry and exit prices .
The 6 tick range chart below, shows examples of the long and short entry signals.
The summary below shows the results of simultaneous application of both long and short strategies.
The 241 real time trades that produced these results are shown below.
$5090 profit in 7 trading days is a very pleasing result, particularly when only one contract is being traded.
Each tick on the NQ is $5 so the results shown above equate to a gain of over 1018 ticks in 7 trading days.
This can be approximated to a gain of over 145 tick per trading day.
In anyone’s book these results are more than acceptable, particularly if the trading account size allows trading of more than one contract.
Can these results be improved upon? The answer is yes.
Simple analysis of the summary show : the results of the long trades below
and the results of the short trades below.
It is obvious, in hindsight, that trading short only would have been more profitable. As the daily NQ chart below shows the rapid decline of the NQ at the start of the 2016 trading year.
This was one of the most bearish starts to a trading year in many a year.
The catalyst for this rapid drop in the Nasdaq (and other stock markets) we are reliably informed, was the Chinese stock markets massive sell off’s. The sell off’s led to the Shanghai market closing limit down on several occasions during the 1st few trading days of Jan 2016.
However, was it possible to predict that short would have been the way to trade?
the short answer is no: but the slightly longer answer is that you can tip the odds in your favour if you look at a longer term time-frame than the 6 tick range bar and use the longer term chart as a means to control/filter your trade entries.
the chart below is a 60 min chart of the NQ. On this time frame the B&W system went into a longer term down -trend at 15:00 Gmt on the 30 Dec 2015 and remained in that longer term down-trend until 10:00 Gmt on the 12th Jan 2016.
The crux of this observation is that the market created a bias to the downside on the hourly chart.
Given that market bias, it is wise to only trade short. The short only summary, shown above, with profits of $5955 confirms that had short only entries been taken the gains would have been greater. So the higher probability winning trade was short. A long trade would be counter-trend.
At 10:00 on the 12th Jan 2016 the B&W 60 minute chart changed its bias to an up-trend, at which point the higher probability winning trade became a long.
below are 2 charts showing the change of 60 minute bias from down to up (on the left hand chart) on the 12th Jan 2016 and
the long only trade entry signals (turquoise vertical lines) on the right hand 12 tick range bar chart.
Trading both long and short B&W up-trend 1st and down trend 1st strategies simultaneously, on a 6 tick range bar can be very lucrative.
Trading a B&W down-trend 1st sell strategy only, on a 6 tick range chart, when the B&W 60 minute longer term trend is down can be even more lucrative.
and Vice versa, trading a B&W up-trend 1st buy strategy only, on a 6 tick range chart, when the B&W 60 minute longer trend is up can also be more lucrative than trading both long and short simultaneously.
The 60 minute NQ up-trend was short-lived and reversed at 17:00 Gmt on the 13th Jan 2016 back into a down-trend, as shown in the chart below. Bias once again should revert to short only.
and below are the potential short entry signals on a 12 tick range bar chart of the NQ.
The strategy has and is being run on a 6 tick range bar chart but the collapse of the NQ was so severe after 17:00 Gmt on the 13th Jan 2016 that the entire fall could not fit on one screenshot using a 6 tick range chart. Accordingly, there were considerably more potential short entry points on the 6 tick range chart than shown on the 12 tick range chart below.
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CFTC Commission rule 4.41(b)(1)(i) hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. IMPORTANT: The risk of loss in trading futures, options, cash currencies and other leveraged transaction products can be substantial. Therefore only “risk capital” should be used. Futures, options, cash currencies and other leveraged transaction products are not suitable investments for everyone. The valuation of futures, options, cash currencies and other leveraged transaction products may fluctuate and as a result you may lose more than the amount originally invested and may also have to pay more later. Consider your financial condition before deciding to invest or trade.