Study: Buy IDEA when RSI is below 50 and there is Bullish Crossover in MACD

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In this study, we evaluate the performance of strategy "Buy IDEA when RSI is below 50 and there is Bullish Crossover in MACD" under various conditions.

X Analysis

In the table below, we find out the performance of this trading strategy under following scenario: buy IDEA 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
113053751292256.868469.8971910.11-5231.34-20779.221.622.130.0522559.56
220067951292256.8612084.26116854-6807.49-26949.381.782.340.0543934.88
324552351292256.8614386.6498876.4-7804.06-30642.951.842.430.0674814.18
416715851292256.8613076.4294382.02-9638.98-52393.981.361.790.0453277.62
510949851272452.9413985.31107865-11171.05-70041.041.251.410.0262147.02
611993051302158.8213800.669662.92-14004.19-87140.90.991.410.0292351.57
714757851282354.916360.5765168.54-13500.79-99179.211.211.480.0332893.68
813423651252649.0219014.7296629.21-13120.46-92065.661.451.390.0272632.08
914410151272452.9419593.98107865-16039.04-84952.121.221.370.0262825.5
1019874551282354.921532.42150562-17572.3-94391.241.231.490.0323896.96

From the table above, we see that best results are achieved by holding positions for 3 trading days. Profit factor is 2.43. Strategy is showing mildly bullish results but we advice not to take a call solely on the basis of this study. Percentage of profitable trades is 56.86%, which is not acceptable. Avoid this strategy. Average return per trade is 2.41%, which is very good. Sharpe Ratio is 0.067, which is low, don't trade solely on the basis of this study.
In the chart below, we plot cumulative trade gain versus trades. This chart is important and informative as it shows the performance of strategy over time.
IDEA Performance, X=3, Profit Factor:2.43

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2020228 Feb 2020 (-6.49%), 09 Apr 2020 (28.79%)
2019411 Feb 2019 (1.61%), 18 Apr 2019 (-0.58%), 16 Aug 2019 (-13.18%), 18 Nov 2019 (49.44%)
2018623 Feb 2018 (2.13%), 24 Apr 2018 (-3.17%), 23 May 2018 (12.26%), 25 Jul 2018 (6.38%), 15 Oct 2018 (-0.68%), 17 Dec 2018 (4.95%)
2017403 Jan 2017 (-0.68%), 13 Apr 2017 (0.06%), 12 Jun 2017 (-3.16%), 12 Oct 2017 (20.72%)
2016709 Feb 2016 (7.29%), 22 Mar 2016 (5.19%), 28 Jun 2016 (1.63%), 24 Aug 2016 (-3.97%), 19 Sep 2016 (-1.77%), 20 Oct 2016 (-3.83%), 21 Nov 2016 (0.49%)
2015403 Mar 2015 (-3.28%), 20 May 2015 (-4.8%), 31 Aug 2015 (-4.14%), 20 Nov 2015 (7.86%)
2014506 Feb 2014 (-10.61%), 20 Feb 2014 (-2.34%), 14 Jul 2014 (4.18%), 30 Oct 2014 (2.41%), 23 Dec 2014 (0.87%)
2013115 Apr 2013 (2.51%)
2012310 May 2012 (2.98%), 29 Jun 2012 (13.85%), 30 Aug 2012 (0.4%)
2011308 Mar 2011 (-2.02%), 02 Nov 2011 (2.61%), 30 Dec 2011 (-0.36%)
2010302 Jun 2010 (1.78%), 09 Nov 2010 (-0.43%), 30 Dec 2010 (2.13%)
2009229 Jan 2009 (-1.21%), 12 Nov 2009 (-0.3%)
2008722 Feb 2008 (6.02%), 25 Mar 2008 (6.07%), 22 Jul 2008 (1.32%), 04 Sep 2008 (4.15%), 22 Sep 2008 (-3.53%), 15 Oct 2008 (-15.32%), 05 Nov 2008 (8.54%)

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
nilnil-1324552351292256.8614386.6498876.4-7804.06-30642.951.842.430.0674814.18
atrtrail34.8124958758213736.2124301.67106780-7047.24-22986.983.451.960.0494303.23
atrnil39.625834057183931.5836545.27106780-10242.94-25854.693.571.650.0464532.28
atrnil26.6720411158243441.3823042.2271186.43-10261.82-25854.692.251.590.0493519.16
atrtrail-15.5313336258213736.2118767.1378633.66-7047.24-22986.982.661.510.0352299.34
atrtrail24.5212803758213736.2118513.5471186.43-7047.24-22986.982.631.490.0352207.53

In the table above, row 1 shows the best exit criterion. Profit factor is 2.43. Strategy is showing mildly bullish results but we advice not to take a call solely on the basis of this study. Percentage of profitable trades is 56.86%, which is not acceptable. Avoid this strategy. Average return per trade is 2.41%, which is very good. Sharpe Ratio is 0.067, which is low, don't trade solely on the basis of this study.
Performance of strategy chart over time is same as above.

View performance of other stocks for this trading system.

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