Strong Performance In July For mnGapAutotrader

July has been a very profitable month for mnGapAutotrader, our automated trading system that fades the opening gap.

As you can see from the trading results for July, the start of the month was tricky for the automated trader and it suffered a number of draw downs, which actually lasted through to the last week for Nasdaq futures (NQ) although the performance with ES and YM has been more even.

The system is dependent on the degree in which the opening gap fills, of course, and volatility towards the end of the month meant that a high percentage of gaps did fill during the trading session, as has been proven statistically.

There are two important reasons why mnGapAutotrader has improved its performance during the month:

Better stoploss management

Thanks to one of our users who kindly suggested great flexibility in stoploss placement, we have now implemented the user defined stoploss amount that gives greater control over the stoploss, thereby giving the trade more room in which to be successful.

Maintaining beneficial risk reward ratios is crucial to long term profitability so we have been using a stop that is around 50% of the size of the opening gap, when the opening gap is large. This still gives a heathy 1:2 risk reward.

For smaller gaps, we still use the system generated stoplosses.

Better trade management

We have also implemented better money and trade management in mnGapAutotrader this month, which has served well in protecting profits during a trade.

The system will now, if the user requires it, automatically move the stop to break even and then to profit target one to lock in profits gained during the trade.

This does sometimes truncate the trade early, as happened today with YM, however it does also turn many previously loosing trades into winners or at least near break even trades, which has contributed significantly to the improved performance of the system this month.

Both of these system improvements are within the latest beta version of mnGapAutotrader. As they have proven successful we will be releasing the latest version to our existing and new users in August.