S&P index CDF - Trading system idea - Aussie Stock Forums

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  1. #1

    Default S&P index CDF - Trading system idea

    Hi Guys,

    Im a software developer and have done some small-time share trading.

    The problem is im a lazy developer so I dont even want to work for my money. Thats how I got a interest in automated system trading.

    I have come up with a basic system which predicts if the S&P index will close positive or negative with 75% success rate. I have back tested as far as I could using data from Yahoo finance and it seems its profitable at anywhere between +42%pa (2004) to +190%pa (2008). This is from buying at open and selling at close daily.

    I used database queries in MS access to do this (Im sure Amibroker could do this also and I am going to learn how to use it).

    My questions are,
    • Are these good returns for a system?
    • Is CDF the best product to trade the index with shorts and longs?
    • What are the dangers in this system?
    • Im pretty good at analysing data in a database should I stick with this method or move onto Amibroker ?

    The next step is finding a algorithm to predict the bottom and top of the market for the day. Can someone please suggest one?

  2. #2

    Default Re: S&P index CDF - Trading system idea

    Out of interest does this system use a MA on open and close?

    eg; Buy open and sell close if 5 MA Open > then 5 MA close
    and opposite for short?

  3. #3

    Default Re: S&P index CDF - Trading system idea

    No it dosnt use Moving averages. Im not sure what a moving average would tell you about a index. But, then again im really new to this.

  4. #4

    Default Re: S&P index CDF - Trading system idea

    Hey man, you clearly aren't very knowledgeable about this stuff I'd suggest extreme caiution in this sort of action you want to take. You didn't even realise it was spelt CFD?

    I have an account with IG markets and know they provide binary trading, that is you can just place a bet that the market will close higher or lower than a certain level. Winning contracts close at 100 and losing at 0 (though you can exit at any time), be warned the spread is a bit high, only worth it if you are REALLY sure.


    Sounds more like what you want no program needed, and if you really can predict with that level of accuracy you'd be rich in no time.

    However since you really don't have a clue (no offense) I'd suggest EXTREME caution again in what you are doing. You can get a demo account with IG markets for free and test your strategy with virtual dollars.
    Disclosure: Long cash, gold, stocks.

  5. #5

    Default Re: S&P index CDF - Trading system idea

    Unfortunately looking further into this it seems way more complex then I initially thought it would be.

    But im not giving up on the idea yet.

    I will defiantly look further into the binary trading product. Thanks

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