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This strategy will work in Tradestation 9.1, Tradestation 9.5, Tradestation 10, and Multicharts.
Underneath the market, we see that there have been more day trade short selling opportunities in the Nasdaq 100 futures. At approximately one year after Pandemic Fed Stimulus started on 3/23/2020, this strategy, which shorts the Nasdaq futures, started working on 3/17/2021. This is a pattern I discovered in late night research on 10/25/2021. I did not notice this on 3/17/2021.
Hypothetically this has been working for 7 months but not prior to the last 7 months. This strategy uses a very simple line of code for the entry.
This strategy will not be in the Portfolio Calculator and I don’t plan on trading it since it only has 7 months of history.
The most important reason I want to share this with you is the fact that since there has been a very profitable way to short this market during the the last 7 months, we could continue to see more profitable short selling opportunities.
The trend “underneath” the market, the one that you can’t see on the daily charts can give us an idea of the trends that are developing.
The concept of using a system to determine the trend is one I have been considering for several years.
For example, using a high frequency trading system with an average trade profit that is too low to actually trade but shows a profitable equity curve for long only trades could indicate an uptrend that you could use to bias your other strategies with higher average trade profits.
The same holds true for shorting the market. Using a high frequency short only strategy that has an upward equity curve could help you bias some of your other trading systems for a short only bias.
The bias would never have to be all long or all short but more gradual such as 60/40 or 70/30.
Having a methodology to short the market as it makes new all time highs could be a powerful trading tool for daytraders.