2010-01-22: Face the new decade with TradingAdvisor
2010 is a special year for TradingAdvisor. TradingAdvisor has delivered strategies to an expanding energy market for a decade! We have a solid 10 years of experience in developing and delivering trading and hedging strategies to the energy business. Our trading and hedging strategies have been profitable through many years, ensuring our customers a profitable toolbox of technical analysis. However, we find it of vital importance to adjust to market changes and meet our customers’ needs. So, how does TradingAdvisor meet the future?

2009 has been an out of the ordinary year for TradingAdvisor. Markets have tumbled in the wake of financial turmoil worldwide, making great impact on the entire energy complex. This has made energy trading demanding for the players involved. For many the struggle to stay in the trade has been very hard and some unfortunately went out of business. We have experienced an increase in the demand for hedging and trading strategies through recent years. The need of refined tools and systems to handle a challenging market is evident. For us this means even more focus on superior quality and high standard.

The macroeconomic forces that were unleashed during the financial crisis in 2008 and the first half of 2009 were strong. No one single market could stem the tide, a tide also influencing the power complex, causing anxiety and higher volatility than normal. The financial crisis shows us the challenges of having markets that are deeply connected. This is mirrored in the energy complex, where we have experienced powerful impact on Nordic energy prices from a range of variables such as oil and currency, world politics, finance and the strong feelings of anxiety, greed and fear. However, we eventually see how markets connect and disconnect; now the fundamentals seem to control the market. As we speak, the shifting weather forecasts run prices back and forth.

In order to ensure positive results for the future, TradingAdvisor has introduced the powerful tool of position sizing for our premium customers. In combination with our refined strategies we see this as an advanced instrument to handle a volatile market complex. A dynamical position sizing system helps the trader to compromise between the desire to allocate risk capital to achieve optimal growth and the essential need to protect trading capital from the risk of ruin.

Portfolio tools are now available for all our customers. This enables a visible performance for each strategy for the specific time frame you choose to investigate. Here you can test various combinations of trading strategies and find key numbers on trading results, ratio average win/average loss, number of winning trades, maximum drawdown etc. Now you know what to expect from the strategies you choose to trade.

The strategies are the core of our product. They are frequently tested to ensure the best performance. Having track records and historical results for all our strategies, this gives the customer the security and insight in the quality of the product. Different market modes require different market strategies. During 2009 we adjusted our short term breakout strategy for the nearest year Nord Pool contract. A combination of a possibility to exit the position early if the market shows a relevant profit together with a higher profit target seems to be a good solution. Together with the trend strategies you are empowered with a tool trading the ever- shifting market modes.

The advantage of spreading risk on several markets together with sound money management is one of TradingAdvisor’s focal points and will be so in the future. Trading a mix of markets together with position sizing can reduce risk from general problems arising from an ever-changing energy complex. This reduces the probability of one negative event in one market triggering severe losses. A combination of strategies trading Nordic and German markets together with Emissions is beneficial. The convergence of energy and carbon trading, offers new opportunities for risk management. The complex is poised for many more years of robust growth as the markets further globalize. It is a great time to be in the energy business. The downside is that risks are more invasive. Risk and reward are a double-edged sword which means more winners and losers in this highly risky business called energy trading.

In the wake of the downtrend we experienced during the autumn in 2008, 2009 turned out to be an unpredictable year in the power business. However, last year reveals the benefits of endurance in trading. As George Will says; “The future has a way of arriving unannounced.” After periods of heavy drawdown, the trend evidently reveals itself again. The market does give traders hard times, taking one direction, only to leap the other the next day. It may be deceitful, making the strategies react to this by taking frequent stop losses. This may be hard to endure, but staying in the game and sticking to a sound trading system ensure profits over time. So when the going gets tough, one may ask oneself; What are the options? Well, in our experience after 10 years in business, the answer is evident. Stay in the game to trade and stick to a sound trading system. The strategies will guide you through, and confidence and continuity will lead you to profit. And that is what trading is all about.