Strategy: Long Breakout Trade in Gold
Trades generated by this strategy are available to paid subscribers
Long Breakout trade is a long-only, mechanical (rule-based), swing trading strategy for Gold.
It can be traded on Gold ETF trackers like GLD, IAU, GLDM, and similar funds, ETF options, or full-sized GC_F or micro-sized MGC_F futures.
This strategy triggers near the market close (NYSE time) and typically holds a position for four days.
The performance of this strategy is based on an anomaly that we observed in gold markets, related to the specific combination of technical and time-based factors that is probably explained by risk aversion of some groups of market participants.
The P&L chart of this strategy looks as follows (GLD, no leverage, $100K account):
Strategy statistics:
Net Profit: 312.71%
Max Drawdown: 9.44%
Total Closed Trades: 281
Percent profitable: 80.07%
Profit factor: 2.84
Avg # Bars in Trades: 4 [days]
We believe that adding some commodity exposure serves an important role in the construction of a portfolio of algorithmic trading strategies. Gold returns tend to be loosely correlated with stock market returns and can enhance the portfolio's resilience to unexpected market downturns because gold is often considered a safe-haven asset.
Like our other strategies, Long Breakout Trade in Gold is designed to be traded as part of a portfolio. This strategy typically holds trades for short periods of time. This capital-friendly approach allows for optimal usage of working capital and fast compounding of returns.
TradeMachine subscribers receive email alerts with position updates each time this strategy enters or exits a trade. Some strategies include take-profit and stop-loss price levels.
Past performance is not indicative of future results. Results based on simulated or hypothetical performance have certain inherent limitations. All posts are subject to the disclaimer on the About page.