Building a New Futures Portfolio

May 27, 2024

As I mentioned a few Newsletters ago, I’m deeply interested in a new, 24-hour Futures portfolio.

For a number of reasons.

While I’m a big fan of “negative” reward-to-risk trading, I want to have something else in the market.

The main reason is that there’s a move afoot to make stock trading available 24 hours a day. (Which is exactly what a distracted, desperate population of traders need: more ways to emotionally lose money. )

If and when stocks do move to a 24-hour day, what will that do to day-trading systems? Will the Open no longer show the same patterns? Will the tendencies at the Close completely change? Will phrases like, “‘Amateurs trade the Open; pros trade the Close’ become dinosaurs?”

If traders can trade all day, will daytrading suddenly become unprofitable? More profitable? And will this transfer over to Futures even though Futures can trade 24 hours already?

In short, a change like this could be a big disruption–and I want to be prepared for that.

What’s a way to prepare?

Trade 24-hours a day.

If a system already trades all day and night, a switch to the same time window shouldn’t make a difference.

At least, that’s the theory.

So I want to get a portfolio in the live market ASAP in order to be ready for the change–and to be able to evaluate if anything changes.

To that end, this week I’m going to share my first three candidates for this portfolio.

Here’s the first.

It’s a 30-minute breakout system using the magical Bollinger Bands™. No surprise, right? We’ve been talking about the Greatness of Bollinger Bands™ for a while now. Here are the details:

30M Nasdaq E-Mini Band Breakout (NQ.D)

• Long Only Entry: When price closes above the Upper Band (Length 100, st dev 2.9), enter at Open of next bar.
• Target: $3000 per contract
• Stop: $1000 per contract

Here’s a recent winning trade:

Here’s the Report going back to 2001 trading 1 contract each time on a sample $10k account via Portfolio Architect:

And here’s the Curve:

The system is simple and doesn’t rely on daytrading. Yes, it only trades the “day session”, but it trades until it hits the target and doesn’t care how long it takes. Plus, this could be easily modified to trade the 24-hour NQ chart.

For me, it serves the purpose I’m looking for. And it will capitalize on the craziness of AI, Nvidia, and anything else because it’s on the Nasdaq.

I’m pretty happy with this. It’s a top candidate.

In our next Newsletter, we’ll look at another one.

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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.