This week we’re looking at the advantages of Futures.

In our last Newsletter, we took a simple idea and it turned out to be hypothetically profitable.

But it also had losing years and periods of twitchy performance.

And that’s to be expected. Simple ideas are the most robust. And the most robust ideas lose.

If it wins all the time in testing, it probably won’t win much going forward.

Does that mean we’re doomed to suffer drawdowns?

No. There’s a way around that.

We can add additional simple ideas to our simple idea. The hope is that several simple ideas combined will create profit and manageable drawdown.

(That simple combining idea might actually be the holy grail. Gasp. Don’t tell anyone.)

Here’s another simple idea on the ES (S&P 500) Futures contract. I think I got this one from Art Collins (who has a lot of books with system ideas).

30M ES Momentum (Long Only)

Again, very simple. If the past two bars are bullish and it’s higher than when the day started, what do you think?

Bullish, right?

Here’s the Report via Portfolio Architect from 2008-now trading 1 contract each time (on a hypothetical $20k account):

And here’s the Curve:

Just like our previous system, it’s clearly profitable and clearly has some drawdown periods.

Now, what if we put those two together?

Using my handy Portfolio Architect software once again, here’s what we get:

Our hypothetical $20k account is now over $140k. And here’s the combined Report: