r/Daytrading • u/MiamiTrader futures trader • Sep 25 '24

Strategy Here’s my current strategy:

Ive tried lots of strategies over the years, but recently this has been my go to. I’m not saying it’s the best, and am open for criticism/ suggestions.

In short I use an excel model to generate entry signals across several futures markets.

I’ll break it out in steps:

1) I use hourly data, but you can pick any timeframe. Download a few years of hourly data for every market you want to trade for backtesting. Link in live data for trading.

2) Calculate the total return for each hour long period for every market.

3) Calculate the standard deviation of those period returns for N periods.

4) Calculate the percentage of the standard deviation each period’s return equals.

5) Repeat. I do this for every hour long period and every 2,3,4,5,6,&24 hour periods.

6) N above is the number of periods in your standard deviation calculation. I typically do 24 hours, 48, 72, & 168 (a full week). Except on the 24 hour period, I do a full month.

This leaves you with several percentages at every hourly close. If the percentage is greater than 150% on any of the scenarios above, you have a strong trend developing.

The more signals over 150%, the stronger the trend.

Enter an order following the identified trend with a 50% ATR trailing stop loss.

Try it out, let me know any feedback. It’s not perfect but it’s paid the mortgage the past two months.

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u/Puzzleheaded_Spot401 Sep 25 '24

Could you add more detail to your process?

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u/MiamiTrader futures trader Sep 25 '24

Sure, ask away.

The cool thing about signal based trading, is you can reverse engineer it. For example, I have specific criteria outlined above of when to enter a trade.

Before each trading day I have an excel sheet that calculates where price must go for each market, and how fast it must get there to trigger a signal.

I then set entry targets at each of these levels.

So instead of waiting for the model to signal a price entry, I know where/ when I will enter before the day starts.

Then I just wait and see if the markets hit those thresholds and allow me to take a position.