Asset management, Commodity price, Commodity risk, Hedging, Market trends, Risk management, Trading, Trend following

Trading COMEX Copper with I-System technology

The price of Copper has been trending significantly higher since the start of 2016. However, this trend has not been easy to trade using traditional trend following strategies.

HG_PriceCurveFm2015_2018_Framed

This last event (D) was quite painful for most – if not all – trend followers, as the following chart illustrates: 

HG_OneWhipsawedStrategyFramd_201807

I had formulated the above strategy more than 11 years ago, in April 2007. This fairly typical trend following strategy failed to profit sufficiently from the trend moves after 2016 to offset the losses it incurred during periods of range-bound price action. The June/July 2018 event (D), caused severe losses for this strategy.

The I-System difference

I’ve been able to trade Copper much more successfully thanks to the I-System technology which makes it possible for trading strategies to adapt to changing market environments:

HG_TenNewStrategiesFramd_201807

The above ten intelligent trading strategies were far more effective at capitalizing on the trend moves in Copper price while limiting the losses from trendless periods and sharp price corrections. The uncertainty of price fluctuations makes it inevitable that some strategies will perform very well and some will lag. Again, thanks to the I-System a multitude of strategies can be implemented, making it much more likely that their performance – on average – will be satisfactory.

The above set turned their initial $35,000 risk budget into $38,315 (at the closing price of $2.83/lb on 5th July 2018). Given the challenging trajectory of Copper price fluctuations, this has been a remarkable result, providing yet another testimony about the quality and robustness of the I-System technology.

 

Alex Krainer is an author and hedge fund manager based in Monaco. In 2016 he published the book Mastering Uncertainty in Commodities Trading. Most recently he also published Grand Deception: The Browder Hoax. This last book was banned on Amazon in September 2017, but it is available in electronic format at the above link. A paperback version can be purchased here: Grand Deception: The Truth About Bill Browder, Magnitsky Act and Anti-Russian Sanctions

 

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