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An Emerging Trading System for Crude Oil Futures


QS II E-mini Nasdaq Trading System

QS II E-mini Nasdaq is a pattern based trading system released on September 24, 2018. This trading system trades 1 minute charts and takes long only trades. It is an emerging trading system since it is based on a new pattern we have seen in the E-mini Nasdaq since October 2016. QS (Quick Start), gives us a quick entry using a proprietary pattern. This strategy risks 35 points to capture 45 points. It is a day trade strategy and enters near the open. The profit target or stop loss can be hit very quickly. As of October 2018, the market moves at the open are so fast that it is difficult to manually enter trades. Automation is best on this strategy.

This is a long only strategy. An observed pattern is the tendency to quickly go up at the open. This has been the case in both short term up trends and down trends. This is a strategy for Tradestation, NinjaTrader and MultiCharts.

Improving the Entry with Money Management Algorithms

We use our Money Management Algorithms to improve the entry for this strategy by entering trades while the open equity curve but during a pullback. We combine Rule 8 and Rule 9 to accomplish this. Rule 8 will enter a trade when the open equity drawdown is greater than the moving average of the open equity drawdown (equity curve is decreasing). Rule 9 will enter a trade when the open equity drawdown is less than the drawdown (equity curve is improving). We also use Rule 12 which looks for a drawdown in the closed equity curve to start and stops on a runup and then waits for a drawdown again.

The Money Management Algorithms reduces drawdown and improves average trade profit. The total net profit is lower since there are fewer trades. Managing risk is one of the keys to trading.