System trades: new trading method and call for Beta testers

As you know Nat has been developing new trading methods for several months. The process involves calculating what we are calling “inflection points” (for lack of a better term) using overnight trading activity.

She posts the re-calculated numbers in her live trade room shortly after 8:00 a.m. and her trade room members then have them available for the morning trading session.

But we also want to use these numbers for a different group of traders — people who can place an order in the morning, but can’t (or don’t want to) monitor the market all day.

We are calling them “swing traders” because they hope to capture price swings in the market — swings that are often concentrated around Nat’s inflection points.

We have preliminary results for a simplified trading system for swing traders who place orders early and leave them alone until their price target is hit or the market closes. Read on.

Trading Method

Pretty simple. We took the inflection numbers Nat posted in the early morning and plotted them on intra-day charts for both Oil and ES futures. We used five-minute charts, but we tested a couple of days with three-minute and one-minute bars. No significant differences. Here is the trading strategy we used.

Trading strategy Trading strategy
  • Trade one contract lots, with trades entered between 8:30 and 9:30 eastern time;
  • Enter only at the Short entry or Buy entry levels;
  • Exit every trade at the Control line or at the market price at the close if the Control is not reached.
  • Use a stop loss on every trade: 15 cents for oil trades, 3.0 points for the ES. Both are equivalent to a $150 stop;
  • Re-enter the trade on the next 5-minute bar each time you are stopped out.

That’s a pretty simple strategy, but there are a lot of variables to play with. If you want to run a similar study using different assumptions, you can download the data for Nat’s inflection points for the month below.

You can also use the data to check the accuracy of our results, and I hope you do. If we are making some obvious gross error it would be nice to know before we go public.

Downloads Downloads
Sorry, Members only.

Results

System trades - January 2016

MonthContract TradesWinners Losers Outcome
January Oil 8 35$130.00
ES
12 9 3 $9,287.50

Notes

Very mediocre results from the oil trades. Our oil data only covers 13 days in January (we didn’t get serious about collecting it until half-way through the month) but the inital results are not promising.

We’ll keep posting the oil trades for the benefit of trade room members, because the results for them are much, much better. (See the Outcomes section).

 But the results for swing trades on the ES are astonishing! Literally so good they scare us. 

This is too good to be true, and you know what that means. So before we go nuts we’re looking for the flaws. And we’re asking you to help.

But oh my!

 

For the 19 trading days in January, the ES swing trades produced 12 trades, 9 winners and 3 losers, for a net gain of 185.75 points, worth $9,287.50 before commissions, slippage, bad luck, and force majeure.

To say we’re flabbergasted by those results is an understatement. For 10 years we’ve been looking for a simple trading method that is consistently profitable and that doesn’t require watching the markets intraday.

January produced a lot of strong intra-day trends, so perhaps it is not surprising that this system was successful.

The question is will it still be successful — even if less spectacular — when markets become range-bound and intraday trends are smaller?

And that’s what we want a few volunteers to help us find out.

Beta testers needed

We are going to run a pilot project to test the results of the calls in real time. We hope to find a dozen or so people who will get free access to Nat’s morning inflection points, trade those numbers in an online brokerage account — real or simulated — and share their results and methods with other traders.

Here’s who we need

  • Subscribers to Nat’s Daily Updates.(Full Access members already have this). We promised Daily members first crack at the next big thing, and this is it.  If we don’t fill up from the Daily members, we’ll take applications from Weekly members.
  • Traders who have an account capable of trading ESH6, either real or sim. We recommend a simulation account to start with. We want you to actually take these trades every day, or almost every day, and record the results.
  • Traders who will trade these calls at least 3 times a week between 8:30 and 9:30 eastern time.
  • People who are willing to share their results and methods in detail at the end of each week. We’ll make up a spreadsheet template to standardize the reporting.

Experience as a trader doesn’t matter, so long as you can actually place the trades and track the results via an on-line account.The initial test will run for a month, and you need to stay to the end.

We are hoping for a good selection of less-experienced traders, so we can see if this works for rookies too, and traders from outside the Eastern time zone, so we can see if that affects the results.

What’s in it for you?

  1. A free look at Nat’s inflection points, normally only available to full access members… who pay a lot more for the privilege
  2. We’ll make you a grandfather (or grandmother). If this pilot is successful we’ll be combining the best methods and the numbers that make them work as a new membership level at a higher price. But  not for you. If you keep your end of the deal, when everybody else pays more, you won’t…  for as long as you stay with us.
  3. We’ll share the results with you, including the modifications that work best. Does a larger stop increase profitability? We’ll let you know first
  4. Our lasting gratitude. We remember our friends.

Sound like a deal? Here’s how to get in

Comments welcome

What do you think? Can this work, or are we chasing rainbows.

 

 

  • Naturus admin says:

    One quick point about the oil results for intraday traders. The oil charts tended to open at the Control line and move either up or down to the buy/sell levels during the day.

    That’s a fairly easy trade for anyone watching the prices intraday, and traders watching the tape — members in the trade room, for example — could do very well with the oil trades.

    The swing trade method we were testing had swing traders entering at the buy/sell levels (i.e. at the point where intraday traders were getting out) and looking for a move back to the control line. Most of the time they didn’t get it.

  • Bob Gorski says:

    Which instruments are being traded for the ES, Oil and Gold? I have an account with Interactive Brokers which, I believe , allows me access to trade what Naturus is recommending, but I want to research first.

    Thank you,

    Bob Gorski