Study: Buy DCBBANK when there is bullish divergence in RSI and ADX is Trending

home > technical-strategy > dcbbank > 47

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

X Analysis

In the table below, we find out the performance of this trading strategy under following scenario: buy DCBBANK 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
1-1529.7496366.673364.598254.51-7239.09-18300.650.460.93-0.0068-169.97
234160.1595455.5611102.2122033.9-5337.72-13333.332.082.60.113795.57
324603.8294544.4415827.6524152.54-7741.35-13333.332.041.640.0582733.76
422027.7195455.5614863.9926764.5-13073.06-25098.041.141.420.0412447.52
512842.7494544.4417513.4733050.85-11442.23-42614.381.531.220.021426.97
613675.4694544.4419765.9541949.15-13077.67-42875.821.511.210.0181519.5
7-18776.2893633.3319479.5431567.8-12869.15-47320.261.510.76-0.028-2086.25
8-50804.0894544.4414467.9425847.46-21735.17-67712.420.670.53-0.062-5644.9
9-35797.0494544.4411952.0118099.23-16721.01-37124.180.710.57-0.067-3977.45
10-43326.0494544.4411823.1518238.99-18123.73-44183.010.650.52-0.075-4814
Although, strategy looks good but profit factor on day 1 is less than minimum accepted value so avoid this, see below for further analysis.
DCBBANK Performance, X=2, Profit Factor:2.6

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2018108 Oct 2018 (5.31%)
2015426 Oct 2015 (-1.39%), 09 Nov 2015 (0.47%), 26 Nov 2015 (4.59%), 10 Dec 2015 (-1.43%)
2011122 Aug 2011 (-1.19%)
2008312 Jun 2008 (6.36%), 02 Jul 2008 (11.02%), 26 Sep 2008 (-6.67%)

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
atrnil26.278344.33114736.3625880.1742982.39-13596.62-20564.241.91.090.011758.58
atrtrail25.176484.62124833.3323093.3942982.39-10736.12-18913.212.151.080.0083540.38
atrtrail35.83-15701.21124833.3317546.9432388.87-10736.12-18913.211.630.82-0.024-1308.43
atrtrail-15.92-24495.94124833.3315348.2623594.13-10736.12-18913.211.430.71-0.042-2041.33
atrnil313.45-103752111109.0932388.8732388.87-13614.04-21491.192.380.24-0.19-9431.96

In the table above, row 1 shows the best exit criterion. Profit factor is 1.09. Profit factor is showing that this strategy doesn't give any edge over rendomness and it is only as good as tossing a coin and doing the trade. Percentage of profitable trades is 36.36%, which is not acceptable. Avoid this strategy. Average return per trade is 0.38%, which is not very high, don't trade solely on the basis of this study. Sharpe Ratio is 0.011, which is low, don't trade solely on the basis of this study.
In the chart below, we plot cumulative trade gain versus trades using the best exit criterion.
DCBBANK Performance, Profit Factor:1.09

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2018108 Oct 2018 (10.8%)
2015426 Oct 2015 (-6.77%), 09 Nov 2015 (-5.13%), 08 Dec 2015 (-3.63%), 10 Dec 2015 (7.34%)
2011222 Aug 2011 (-5.69%), 25 Aug 2011 (12.13%)
2008412 Jun 2008 (-10.28%), 02 Jul 2008 (21.49%), 26 Sep 2008 (-7.49%), 01 Oct 2008 (-8.6%)



View performance of other stocks for this trading system.

Get Clearnifty's Android App.

Get clearnifty on Google Play
Get clearnifty on Google Play