Study: Buy HDFCBANK when there is bullish divergence in RSI

home > technical-strategy > hdfcbank > 45

In this study, we evaluate the performance of strategy "Buy HDFCBANK 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 HDFCBANK 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
11993.1974357.142485.283981.92-2649.31-4748.60.941.250.02284.74
24170.3173442.866694.438450.7-3978.25-8659.221.681.260.021595.76
328732.1573442.8615107.1734607.65-4147.34-9217.883.642.730.0634104.59
479468.1874357.1425110.3182494.97-6991.02-15083.83.594.790.07811352.6
581044.6974357.1424444.0477666-5577.15-10055.874.385.840.08611577.81
610281474357.1429729.8598591.55-5368.35-13128.495.547.380.08614687.76
798344.6175271.4322750.4996579.48-7703.91-13407.822.957.380.08414049.23
887300.2374357.1426189.5686519.11-5819.34-12011.174.560.08212471.46
982917.9173442.8633289.6182897.38-4237.73-10335.27.865.890.08111845.42
1066643.2473442.8628106.4770824.95-4419.04-8379.896.364.770.0769520.46
Although, strategy looks good but profit factor on day 1 is less than minimum accepted value so avoid this, see below for further analysis.
HDFCBANK Performance, X=6, Profit Factor:7.38

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2019131 Jul 2019 (-0.82%)
2015107 Sep 2015 (2.92%)
2002101 Nov 2002 (4.37%)
1996129 Jan 1996 (49.3%)
1995326 Sep 1995 (2.88%), 18 Oct 1995 (-6.56%), 27 Nov 1995 (-0.67%)

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
atrtrail-16.2272239.9495455.5617606.6269327.26-3948.3-6282.174.465.570.0748026.66
atrtrail35.5647264.295455.5612611.4821683.58-3948.3-6282.173.193.990.15251.58
atrtrail25.2236100.495455.5610378.7214455.72-3948.3-6282.172.633.290.114011.16
atrnil38.3345379.4394544.4418182.3121683.58-5469.96-6996.193.322.660.0865042.16
atrnil2635957.9695455.5611673.4414455.72-5602.32-6996.192.082.60.0933995.33

In the table above, row 1 shows the best exit criterion. Profit factor is 5.57. Number of signals (total trades) generated is low, don't trade solely on the basis of this study. Strategy is very good and impressively bullish. Percentage of profitable trades is 55.56%, which is not acceptable. Avoid this strategy. Average return per trade is 4.01%, which is very good. Sharpe Ratio is 0.074, 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.
HDFCBANK Performance, Profit Factor:5.57

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2019131 Jul 2019 (-1.74%)
2015107 Sep 2015 (4.66%)
2002101 Nov 2002 (2.1%)
1996129 Jan 1996 (34.66%)
1995526 Sep 1995 (1.07%), 18 Oct 1995 (-2.66%), 27 Oct 1995 (-0.36%), 27 Nov 1995 (-3.14%), 29 Nov 1995 (1.52%)



View performance of other stocks for this trading system.

Get Clearnifty's Android App.

Get clearnifty on Google Play
Get clearnifty on Google Play