One of the frequently asked questions I keep getting is what is the complex list of markets that are suitable for automated trading strategies. Let me give you a brief overview of 13 markets that I know you can develop interesting automated trading strategies for.

US Index Markets: TF, EMD, YM, ES

The US index markets are my specialization and I can confirm that for all the markets mentioned above it is not that difficult to find a high quality and functional automated trading system. I think the simplest market where you can get good results quickly is EMD. Most of the strategies that work in the EMD market are (with minor changes) profitable in the TF market as well.

In the YM market, you can get strategies with a small stop loss and it is definitely a suitable market for small trading accounts. The ES market can be quite challenging. Due to the high level of saturation of automated trading systems in this market, it takes a long time to find an interesting and robust system. Still, it’s not impossible, and as a reward for your hard work, you can expect smaller stop-losses, making this market more suitable for small accounts.

EU Index Markets: FDAX

I have a lot of experience with this European market. Its high volatility can generate really good returns, but if you are not careful enough, you can experience quite significant drawdowns. In fact, it is not that difficult to create a system for the FDAX market, when using a time template with US business hours (15.30-22.00). Using this time template, I have managed to create several breakout systems that can be profitably traded in this market. One of the systems that I created for the FDAX market several years ago, is a fairly simple breakout model (my breakout models are generally not complicated) and it turned out to be profitable in the US index markets as well. And in several other markets. . Systems don’t have to be complicated to be robust, you just need to be patient as it takes some time to find simple systems that are robust.

US Bonds: US

I have never traded any of my automated trading strategies live in this market (I specialize in the US index markets), but even in this market an interesting, simple and robust automated breakout strategy can be created. I know of several traders who are successfully trading the US market and there is no reason to avoid it. The only challenge is creating a system with prom. Commercial value. 1 tick in this market represents more than 30 USD, so transaction costs and slippage can have a big impact on the live capital curve. So keep that in mind.

Energies: CL, RB, NG

I also have a lot of experience with energies, especially trading the CL and NG markets. To trade these markets you need a larger trading account, they tend to be quite volatile from time to time, but creating an automated breakout strategy is not that difficult. The “secret trick” here is to experiment a bit with timing templates, as they can have a huge impact on your bottom line. Again, you have to be a little patient and not be afraid to experiment.

In general, I also have quite interesting results in the RB market, but the downside of this market is really low liquidity, which is why I have not started live trading with any of my systems. systems that I have seen, I can say that I am not the only one who can create really solid automated breakout strategies for the CL and NG markets.

Grains: Wheat, Corn

These markets can be a bit challenging to create breakout systems and I have personally had partial luck developing systems for these markets. I have managed to find a couple of models, but it requires already advanced knowledge. And I have also seen several successful systems for this market from my students.

Personally, when it comes to grain markets, I am a little concerned about one issue: they tend to go a little “crazy” from time to time and there may be a limit movement. So when working with these markets, the approach needs to be more sophisticated and I highly recommend having an advanced system for risk management, which, for example, will quickly decrease the number of contracts (or convert the system entirely), as as soon as volatility increases rapidly. Fortunately, limit moves are often preceded by increased volatility, so you can predict and react early. In addition to this specificity, the grain markets have quite interesting potential for automated breakout strategies.

Soft: Cotton, Sugar

I must admit that I don’t have a lot of experience with these markets. But I know that several of my students, using advanced knowledge, were able to create interesting and solid breakout strategies even in these markets.

I was experimenting with the sugar market at the end of my career in automated trading and I think this market becomes really interesting when you decide to trade positions. Position traders have, in this market, much more possibilities of how to obtain an interesting automated breakout strategy.

In general, it is always easier to go for long trading strategies rather than short trading strategies. I myself build strategies for long and short term trading separately.

Happy trading!