[101 Trading Ideas] Silver and Gold #gold #silver #strategy #101tradingideas

101 Trading Ideas is a book that helps traders quickly develop strategy ideas. This strategy is another example of how to use 101 Trading Ideas to find alpha. More info on the book at the end of this post.

101 Trading Ideas:

#48 Stimulus and Response

#95 Geometries

Triggered Idea:

What happens when gold is trending and silver isn’t? Gold is the stronger market, silver should follow; Gold the stimulus, Silver the response which increases buying in the momentum complex providing another stimulus and response to Gold.

From Triggered Idea to Trading Strategy:

Use boxes (geometries) around silver and gold to determine trend and direction. When gold and silver are going in opposite directions, gold should pull silver in gold’s direction giving gold a boost as the metals complex is bought. Use pullbacks in Gold for entries.

Long Rules (can reverse)

the average close of Gold over the last 20 days is higher than the average close 20 days ago, and (trending)

the close of Gold today is lower than the average close of Gold over the last 20 days (pullback)

the average close of Silver over the last 40 days is lower than the average close 40 days ago with a 20 day overlap, (opposite Gold)

then buy Gold

Short Rules:

Opposite long rules

Exit:

After 17 days

Results (2007-p)Silver and Gold Equity Curve

trades: 45

w/l: 60%,  27 of 45

avg trade: 13.30 pts

z: 1.65

profitable 10 of 12 years, exceptions 2007 and 2011

Notes:

I like the buying a pullback piece – so simple.

This also works with Crude Oil and Silver.

A rough draft, alpha hunt idea. Not a complete strategy.

There is risk in trading. Most strategies degrade when moving from in-sample backtests to out-of-sample live markets. Be careful.

101 Trading Ideas:

This strategy idea was triggered by 101 Trading Ideas, A Magical List for Fast-Paced Alpha Hunting.

More info here and available on Amazon

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