This Newsletter Strategy Keeps Performing

Nov. 25, 2024

When I make a new strategy, I try to make it robust.

But that’s the thing about creating a strategy.

There’s no one right way to do it–and we never know.

We never know if it’s going to work in the future.

So that’s why I like to go back to previous strategies and see how they’re holding up.

And today we’ll look at the strategy featured in the March 27, 2024 Newsletter.

This was a Buy On Monday simple strategy with a weird twist. It only buys on Monday if the price is below the 50-day moving average. I wouldn’t think this sort of methodology would work with a countertrend filter, and I especially didn’t think it would work on something as momentum-based as the Nasdaq.

But the testing at that time looked good.

Here are the rules again:

The Buy on Monday 10-Minute NQ.D (E-Mini Nasdaq) System 

• Buy on Monday after 14:00 pm ET (2:00 pm ET).
• Close out at the same time as entry on Wednesday if we haven’t hit our target.
• Target is 1.4x the ATR.
• Stop is 15x the ATR.
• Filter/Data2: the 50-day simple moving average on the Daily chart.
• Only Buy when price is below the SMA on the Daily chart.

It hasn’t traded a lot lately because the NQ has been soaring, but here’s the last trade:

It was a winner.

Here’s the Performance Report since 2020 via Portfolio Architect:

It’s done well on a hypothetical $22k account trading 1 contract each time.

And here are the Annual Returns for 2024 and the years going back to 2020 via Portfolio Architect:

Here are those returns numerically from Tradestation:

It doesn’t seem like it should work but the testing keeps showing winning trades and nice profits.

And it worked amazingly well in the Bear Market of 2022.

We’ll keep an eye on it.

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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.