Strategy: Seasonal Long Trade in TLT
Trades generated by this strategy are available to paid subscribers
This is a swing trading, long-only, seasonal bond trading strategy based on an anomaly in the US Treasury market during bond auction weeks.
You can read more about this anomaly in the following (free-access) post:
It was developed to trade the 20+ Year Treasury Bond ETF (ticker: TLT) but can also be traded on futures contracts like TLT_F, ZB_F, or micro-sized treasury yield futures. When you opt to trade on micro yield futures, remember to invert the direction of the trade since yields move in the opposite direction to bond prices.
This strategy typically trades five times a year and holds a position for an average of three days.
Technical filters and volatility-based profit/loss management methods are used to ensure we are not trying to buy into a severe bond market selloff, and we maintain proper profit-to-risk ratios.
The P&L chart of this strategy looks as follows (TLT, no leverage, $100K account):
Strategy statistics:
Net Profit: 92.98%
Max Drawdown: 2.5%
Total Closed Trades: 104
Percent profitable: 68.27%
Profit factor: 4.102
The average trade hold period of 3 days is a capital-friendly way to gain long exposure to Treasury bond market while locking in our working capital only for a short time.
Thanks to this feature, like most of our strategies, this one is also meant to be traded alongside multiple other strategies from our portfolio to allow fast compounding of returns.
How to get this strategy
Paid 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.