Study: Buy ADANIPORTS when there is bullish divergence in RSI

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In this study, we evaluate the performance of strategy "Buy ADANIPORTS when there is bullish divergence in RSI" under various conditions.

X Analysis

In the table below, we find out the performance of this trading strategy under following scenario: buy ADANIPORTS at the closing price whenever the signal triggers (Rs. 2Lac per trade). Then cover the position "X" trading days later at close_price i.e. sell after "X" trading days. Here are the results of this study:

X DaysNet ProfitTotal TradesWinning TradesLosing Trades% ProfitableAvg Winning TradeMax Winning TradeAvg Losing TradeMax Losing TradeWin/Loss RatioProfit FactorSharpe RatioAvg Trade
Although, strategy looks good but profit factor on day 1 is less than minimum accepted value so avoid this, see below for further analysis.

Strategy Analysis - Exit Criteria

In the study above, exit criterion was that hold the position for "X" trading days. That's one possible exit criterion. However, we can have more elaborate exit criteria. Now we study this strategy under other exit criteria. There are 3 things which you must get to know before proceeding further. Table below shows the performance of this strategy under various exit combinations. Note that nil,nil,-1 is a special exit combination where we just take the best result of "X" Analysis study above.

Stop LossAdjust Stop LossTargetAvg Holding PeriodNet ProfitTotal TradesWinning TradesLosing Trades% ProfitableAvg Winning TradeMax Winning TradeAvg Losing TradeMax Losing TradeWin/Loss RatioProfit FactorSharpe RatioAvg Trade

In the table above, row 1 shows the best exit criterion. Profit factor is 3.13. Strategy is very good and impressively bullish. Percentage of profitable trades is 41.67%, which is not acceptable. Avoid this strategy. Average return per trade is 6.6%, which is very good.
In the chart below, we plot cumulative trade gain versus trades using the best exit criterion.
ADANIPORTS Performance, Profit Factor:3.13

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2020220 Mar 2020 (-7.26%), 24 Mar 2020 (19.06%)
2016128 Jan 2016 (0.4%)
2015216 Nov 2015 (-1.42%), 02 Dec 2015 (-2.85%)
2008726 Mar 2008 (44.04%), 25 Jun 2008 (-7.96%), 07 Jul 2008 (10.69%), 30 Sep 2008 (-6.15%), 07 Oct 2008 (-7.41%), 13 Oct 2008 (-4.07%), 03 Dec 2008 (42.14%)

View performance of other stocks for this trading system.

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