Bubba & Dr. FANG’s Futures Trading Publication Mega-Trade Model Portfolios
Mini Micro Futures Portfolios Weekly Update
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As we warned repeatedly, we were “due” for a drawdown based upon the various equity curves of the mathematical model we created. Trees do not grow to the sky, and in return for outsized returns, we accept the ebb and flow of trends. Trends create frequent periods of profitability and occasional periods of losses. Right now, we are in a period of losses.
Traders overestimate potential profitability and underestimate the possibility of losing periods. The real killer is over-leverage which we warned about repeatedly. If you did not start with at least 3:1 equity and you pressed when you should not have, it is not surprising that you may be in trouble. You have over-leveraged and have not managed your cash properly. In addition, margins have been increased sharply recently and we will adjust the cash required to trade each of the Futures Model Portfolios soon.
Amateurs continuously violate our trading rules and often end up losing instead of winning. Over the long term, we make a lot of money. Over any given short term period, we can have losses and often those losing periods can last for a year or more. You must be committed to following the rules and trading exactly as the algorithm directs.
Markets usually trend about 35% of the time and 65% of the time they find themselves in congestion. Congestion always leads to breakouts which is what our algorithm is based upon. In addition, unlike other trend following methods, we do not get whip-sawed in congestion. The algorithm employs factors that eliminate a high percentage of potential whip-saw.
All you have to do as a trader is to follow our simple trading rules. Never think you can outguess our algorithm because we cannot and you certainly cannot. No ego=success in markets and those that insist on being smarter than the market end up broke.
Right now, we have three (3) commodities with open trade Mega-Trade status. We are looking for home runs-not singles.
The key is consistency and discipline as always. Some ask what does your algorithm pay attention to? The best way of answering that question is what it does not pay attention to. You see, the algorithm looks at significant chart points, price, and time. News, fundamentals and all forms and variations of technical analysis are totally and completely ignored.
We make money by surrendering to what the market is doing- if we are in an up-trend we are long and if we are in a down-trend we are short. How simple a concept- yet 97% of all traders are unable or unwilling to grasp it.
The algorithm does not pick “turning points” per se, but it does get aboard a new trend quickly because that is what it was designed to do. Remember, we are trying to “mirror the market” and we do that by doing what the market is doing. If we are long and the market is going down, at some point, we will get short, etc. You may not like the fact that at times it seems we are late to the party, but that is a misperception and all I can say to that is: stay disciplined and follow the rules.
Our performance is not based on “forecasting” or “analysis” but rather what a price of a commodity is doing right now. The words “too high” or “two low” are not in our dictionary because no one knows what “too high” or “too low” is in trading- although the multitude of foolish losing traders think they do.
We make big money by being long term position trend traders- nothing more-nothing less. You need to be 100% disciplined to replicate the Model Portfolios and the more you deviate from full discipline, the worse your performance.
***New Trade Alert***
Trades can be entered during the electronic night session or in the morning. There is some flexibility in terms of when you enter a new trade and this is because our profits are not marginal. Trade prices shown on the Model Portfolio spreadsheet are what I get for my own trades. Yours can be better or worse.
Don’t be shortsighted and look at one day or one week, this is about the long run, our returns are the best in the industry, history tells us if we follow the model and the rules we make lots of money.
Conceptual Basis of the Algorithmic Futures Trading Method
As trend followers, we only need a few big moves a year to make big bucks. My Mega-Trend Trading Method will get aboard a market and hang on for big moves. Because of it, we can achieve great profitability year in and year out. We look to hit home runs- not singles.
Most trend following methods have a low winning trade percentage (typically 32-39%) and for that to work there must be a few big winners to offset the frequent losers. However, my method does not suffer from this problem due to an overall 66% winning trade percentage.