Wednesday, 9 May 2012

New Silver Setup Went Up 90-Fold - Currently Bullish

Silver went up more than six-fold between 1995 and mid-2011. Meanwhile, my new trading setup for silver went up over 90-fold in backtesting.

Like the other setups in my COTs Timer trading strategy, my signals for silver are based on the Commitments of Traders reports - the free weekly data on trader positioning issued by the U.S. Commodity Futures Trading Commission.

My silver setup is currently in its fourth week of being bullish. It is based on trading alongside the "smart money" commercial hedgers in silver futures and options and trading in the opposite direction as the wrong-way small traders, who tend to be wrongly positioned at key market turns. The setup is in cash when the two groups of traders don't give the same signal.

See my newly updated latest signals table and backtesting results page for more details on this setup and what the silver COT data is saying these days.

I test the COT data to find levels of trader positioning that were historically followed by price moves. I use a variety of statistical techniques to identify signals that not only gave good profits, but also that did so reliably. In fact, the reliability of the signals is far more important to me than the levels of profits. See my FAQs page for more on my backtesting process.

I should soon add a setup for the Euro/USD cross.

Good luck the rest of this week, and see you back here after Friday's COT release for another weekly update.


jeff said...

1. Regarding your signals for Gold for: small traders net % 0.85/0.65
Is this 85% Net % is bullish
And less than 65% bearish?

1. Are you familiar with the Blees ratings? That is the % of the last 18 months of the commercial net position. 100 being the most bullish in the last 18 months and 0 being the most bearish in the last 18 months.

I_Got_Prechterized said...

do you have an update for this week?

I_Got_Prechterized said...


I just looked at your latest signals table. The commercial traders reading for NAS 100 is +2.27? Is this correct? Isn't this one of the highest readings on record?

Alex Roslin said...

Hi guys,

Thanks for your comments. Jeff: The gold small trader signal fades the small traders - so it goes bullish when the net percentage position hits 0.65 standard deviations above the moving average or less. It goes bearish when the net percentage position hits 0.85 standard deviations above the moving average or higher.

I_Got_Prechterized: Sorry, I didn't get to it yet. I'll post it shortly. Yes, that's a pretty high reading for the NDX. It's only gotten that high two previous times in the past three years. But I have no idea of the predictive value of such an extreme reading.

My system couples two trader groups to get more robust signals, so I don't tend to follow one trader group for trading signals in any event.