How I Developed CBO
Most trading systems are developed using a highly optimized methodology which examines virtually every possible combination and permutation of indicators. Such systems rarely go forward in real time with results comparable to the back test period. CBO on the other hand was developed with up to three years of out-of-sample data in order to validate the methodology and to increase its future profitability.
The Markets I Included in CBO
Because my intermediate and long-term projections strongly indicate that generational opportunities now exist in many markets, I had to be very selective. I searched for a system that would take advantage of those markets most likely to generate large returns.
I chose several currencies because they are at an inflection point with the US dollar. I chose the Aussie dollar because it is a resource-based currency and I believe that natural resources will surge.
I chose the Euro currency because commercial accumulation of lon positions in the euro currency is at or near record highs suggesting not only that the Euro will survive but that it is likely to make a huge move up.
I chose the dollar index because it is likely to turn lower from long-term resistance.
I chose interest rate futures 30 year bonds and 10 year notes because we are on the threshold of secular up moves in interest rates which if my work is correct will result in bear markets lasting several years. And I want to be in on those.
I selected natural gas because it is on the verge of what may be its largest bull market ever and commercials know that!
Why consolidation and breakout?
Many big market moves begin after period of consolidation during which prices show fairly narrow ranges followed by a period of accumulation. Sometimes such accumulation takes many days, while on other occasions it is insidious: it happens right before our eyes and we don't see it. The CBO method is able to spot these opportunities and get on board. After the lengthy period of doubt, indecision, negativity, and fear that the financial world is coming to an end, the time is now right and the markets are now right for breakouts from consolidation patterns. Note that a consolidation pattern for my CBO method does not have to come from a sideways price movement. Consolidation can actually occur during an uptrend or during a downtrend. CBO capitalizes on breakouts within trends.
My FIRST EVER System for Natural Gas Futures!
Many of you know that I expect explosive rallies in natural gas futures. CBO is my first ever computerized system to include trades in natural gas futures! And it appears to do that extremely well.
Historical Record
Here is the historical record of CBO as a basket for the following six markets: 30 year treasury bonds, 10 year treasury notes, US dollar index, natural gas, Australian dollar, and European currency. Look at a few items that are stellar such as the maximum consecutive winners and the average profit per trade! |