A System for Bear Markets

Sept. 7, 2022

This year has been a handful.

Buy-and-hold is taking its first beating since 2008 and manic reversals have terrorized systems traders, as well.

From indexes to Futures to Forex, losses have been everywhere.

So, has anything worked in this volatile environment?

Yes. Bollinger Bands™ have worked. In other words, systems based on volatility work in volatility. Interesting.

We talked about this system back in the July 23, 2021 Newsletter. It used BB and big targets with the Master Trend robot. Here were the details:

4-Hour BB Big Targets (7/23/21):

• Target: 1500 pips
• Stop: 60 pips
• Break-Even: 130 pips
• Bands: Default (20 L, 2/-2 standard deviation); go Long on a break above the Bands, go Short on a break below the bands
• Time Exits: 50 Long, 80 Short

How has it handled 2022? Very nicely.

See it here also. It’s hypothetically up over $6k trading 1 lot each time in 2022.

This system has a massive target, which keeps it out of many reversals, and a small stop, which gets out quickly when the time isn’t right.

That seems to be a great mix for volatility.

Is anything else doing well?

We’ll talk about that in our next Newsletter.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

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.