A Very Interesting System on Gold

A Very Interesting System on Gold

Apr. 12, 2024

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While working on Bollinger Band™ systems for this week’s Newsletters, I came across something very interesting.

True to what we’ve talked about, I wanted to put our Band framework on an instrument that actually trends.

What has trended hard in the past (and is trending hard right now)?

Gold.

So it seemed to me that putting a breakout strategy on Gold would work. I had no idea it would work this well.

Keep in mind, I did do a little bit of optimizing.

For the Fx strategies, I used the 30M chart. For Gold, I’m using the 120M chart.

Why? Because the volume on 30M bars was too sparse.

And I changed the Upper Band and Lower Band standard deviations slightly. Upper is 2 and Lower is -3.1.

Otherwise, I kept the same Band length and the same 3:1 positive reward to risk parameters.

How did it do?

On a hypothetical $20k account from 2002-2024, the Curve looks like this (via Portfolio Architect):

It’s up around 900% (with trading costs built in). And it has only one tiny losing year:

This is a great example of everything we’ve discussed.

One, Bollinger Bands™ continue to be awesome for breakouts.

Two, put trend following strategies on instruments that trend.

Doing that led me to one of the best Gold Equity Curves I’ve ever seen. (Elite Members will get this code for free.)

I’ll be watching it going forward.

Talk soon.

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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.