“Continuum Trading” Trading System
Aren’t we investors and traders all looking for a trading system that generates a “reasonable” return with a manageable risk? Both terms are of course flexible and individual. For us as developers of the trading system “Continuum Trading” this means:
a. Planned return per year of approx. 24%
b. with the lowest possible draw downs
c. with the shortest possible holding time per trade (approx. 1 day)
d. with as few simultaneous open positions as possible
e. with a maximum short-term leverage of 5
f. with the highest possible profit rate (> 2)
G. with the highest possible Sortino ratio (> 2)
H. and this in a highly liquid market that is as impossible to manipulate as possible
We believe we have developed such a trading system! The aim is to find a return curve that is as close as possible to the linear regression. The fewer deviations from this desired line, the more everyday and predictable the trading system is.
The following chart would be the plan:
And now to reality:
“Continuum Trading” Trading Apporach
Our “Continuum Trading” trading approach combines 2 separate strategies:
a. 1234 Trading
b. CTCA Trading (= combination of Fibonacci trading and channel trading)
Both disciplines in themselves are already exceptional. However, if we combine the two techniques, they lead to unique results that are far above the average of technical trading systems. Our company name “Continuum” is not chosen by chance, and represents our motto, which also describes our goal:
A continuous, stable and as plannable as possible yield curveMag. Martin Mayer
A wonderful goal, which is seldom achieved in the industry. We have worked towards this goal for years, with numerous setbacks, which, however, are part of the development of such a trading system.
We try to avoid big draw downs. Draw downs can also be measured against the planned annual return. We do not want a system with e.g. 18% annual return, but we have a draw down of 75% of the planned annual return. We consider such a system to be unacceptable. In other words: it is far from being compatible with everyday life.
We have been in the Forex market for 25 years. Much has been developed and tried out by us, but very little has met our expectations. We also looked at and tested at least 150 purchased systems. Exactly ZERO systems met our requirements.
Who are we?
What does 25 years of experience in the forex market mean? In any case, many good and extremely many negative experiences. We believe that we have made a lot of mistakes in the past. And this is exactly the point. The negative experiences make a very good trader, provided that he makes conclusions from these experiences and develops mechanisms in order to avoid making these mistakes once again. And that’s exactly where we are today. We have learned from past mistakes.
We used to be crisis managers, now we are risk managers.Mag. Martin Mayer
Even the best education is of no use if you succumb to the lure of quick money (= greed). The most important thing is to stick to the rules. Sounds easy, but it is not. On the contrary, it is one of the most difficult tasks in trading. During our training in Orlando / Florida we learned: The winner is already certain before the start! A daring statement, but if you understand the deeper meaning behind it, then you can only agree. In other words: before I enter the trade, I know what percentage of the assets I am entering with, where is my entry and where my profit target. AND where is my stop loss. The planning of the entire trade takes place BEFORE the entry.
Let’s talk about the most important thing in trading. What does risk mean for us and, as a result, its reduction? Well, that is an extremely complex question and we will devote ourselves to answering that question in detail.
We try to keep all risks as low as possible.Mag. Martin Mayer
First we need to define risk. Risk means:
a. To have open positions in the market
b. Working with too much leverage (one of the most common beginner mistakes), both short term and long term. Both of these mean too high risk.
c. Having no stop loss
d. Losing the overview because there are too many open positions in the market at the same time
e. Having profit targets that are far away
f. Having no strategy
G. Having no self-discipline should mean that you don’t stick to your own guidelines
i. Bad education
Only when we have clearly defined the risk we can try to reduce these risks. And now comes the crucial point: our trading strategy emerged from the definition of the risks. So you could say we have a “risk reduction strategy”.
Our strategy can be described in a few points as follows:
- The path of small steps (even with large movements we only want small profits, in other words: we are satisfied with a small piece of the pie)
- We turn quantity into quality (only a few of the many potential trades fall through our selection mechanism)
- Short retention period (the less we are in the market, the lower our risk)
- Self-control (this point is sometimes the most difficult in implementation. For this reason, we work on the four-eyes principle)
All of our developers and traders have completed the courses of the online university “Market Traders Institute” in Florida / Orlando (see www.markettraders.com), which employs 180 people. Our Master Trader, Mag. Martin Mayer, born in 1963, completed the master’s course with the visionary, founder and owner of MTI, Jared Martinez, several times on site in Florida. With this knowledge, we have been able to perfect our trading strategy in recent years.
To give you a brief insight, on June 9, 2020 we created a portfolio, which we connected to www.myfxbook.com. Our trading results are recorded here fully automatically, and above all, the data records cannot be manipulated. We will present the detailed evaluations in detail in the e-book.
One final thought on the subject of
“short-term versus medium- or long-term forecast”.
What does the weather have to do with forex trading? From our point of view, a lot when it comes to the prognosis. Do you know someone who can predict the weather for 3, 6 or even 12 months? We don’t know anyone. And we are of the opinion that one cannot predict the foreign exchange at all or with extremely great uncertainty for several months or even 1 year.
Reason: the foreign exchange market is heavily dependent on
- Central banks e.g. Swiss National Bank decision of January 2015
- Politics e.g. Socialism versus capitalism, China versus USA
- Pandemics e.g. Corona pandemic
- Environmental disasters e.g. Oil price from hurricanes
- Technical problems e.g. Large-scale power outages, or the Fukushima nuclear accident
- Terrorism e.g. 9/11
- Great reset e.g. World Economic Forum
From our point of view, all of the above points only permit a highly uncertain forecast. My former doctoral supervisor (unfortunately I was not allowed to finish my doctorate) at university, Professor Dr. Hans Mühlbacher once said in a seminar for doctoral students:
“A prognosis is an intentional falsification of the truth”
At that time I couldn’t deal with his theses at all, because I really still believed in the prognostic skills, now I’ve learned better. I suspect that he only wanted to “provoke” us PhD students in order to start a lively discussion. He succeeded.
What he meant to say, forgets all the long-term forecasts, the probability that you are wrong is much higher than giving an approximate, correct forecast.
And what does this have to do with our Continuum Trading approach?
This is exactly how we see the forecast for foreign exchange. We are pretty good at giving a short-term forecast of a few hours to a few days with our Continuum trading approach. We are in no way able to predict where a Eur / Usd rate will be in 12 months. Therefore, we have specialized in the short-term analysis of currency markets.