Study: Buy CEATLTD when there is bullish divergence in RSI

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In this study, we evaluate the performance of strategy "Buy CEATLTD 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 CEATLTD 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
1-13954.051688503292.3710409.44-5036.63-10505.050.650.65-0.05-872.13
2-10094.26167943.757466.9214069.09-6929.19-13744.081.080.84-0.022-630.89
3-28280.95167943.758293.4418181.82-9592.78-19191.920.860.67-0.05-1767.56
4-19603.361661037.512084.9825260.24-9211.33-20915.031.310.79-0.029-1225.21
5-56014.671661037.58920.7822324.29-10953.93-24646.460.810.49-0.08-3500.92
6-70512.78167943.756140.0818096.02-12610.37-34755.130.490.38-0.099-4407.05
7-115425167943.754326.4614824.14-16190.01-46868.690.270.21-0.13-7214.05
8-1610211651131.256437.9814157.18-17564.61-50236.970.370.17-0.17-10063.8
9-1392261651131.258005.1815365.26-16295.59-39393.940.490.22-0.17-8701.6
10-1217381651131.2511481.2420386.33-16285.81-400000.70.32-0.14-7608.61
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
atrtrail25.48-82786.762351821.7415303.1833621.85-8850.15-20357.91.730.48-0.089-3599.42
atrtrail36.14-97246.532241818.1814332.3721847.38-8587.56-20357.91.670.37-0.12-4420.3
atrtrail-16.45-1082672241818.1811577.1417722.57-8587.56-20357.91.350.3-0.15-4921.25
atrnil27.52-1576732131814.2920801.2533621.85-12226.49-24455.731.70.28-0.18-7508.24
atrnil38.4-174574202181021586.4221847.38-12097.06-24455.731.780.2-0.24-8728.71

In the table above, row 1 shows the best exit criterion. Profit factor is 0.48. This strategy is not profitable and we advice you not to use it.
In the chart below, we plot cumulative trade gain versus trades using the best exit criterion.
CEATLTD Performance, Profit Factor:0.48

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2019305 Feb 2019 (-0.41%), 12 Feb 2019 (-1.22%), 18 Feb 2019 (7.15%)
2018210 Oct 2018 (-4.66%), 11 Oct 2018 (2.64%)
2016201 Jun 2016 (-2.66%), 27 Jun 2016 (7.28%)
2011531 Jan 2011 (-4.39%), 16 Aug 2011 (-4.45%), 26 Aug 2011 (-2.88%), 04 Oct 2011 (-4.07%), 25 Oct 2011 (-0.85%)
2010221 May 2010 (-0.14%), 09 Dec 2010 (4.37%)
2008909 Jun 2008 (-7.6%), 16 Jun 2008 (-6.25%), 04 Jul 2008 (-1.72%), 26 Sep 2008 (-5.52%), 13 Oct 2008 (16.81%), 15 Oct 2008 (-9.57%), 16 Oct 2008 (-10.18%), 28 Oct 2008 (-3.33%), 12 Nov 2008 (-9.75%)



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