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

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In this study, we evaluate the performance of strategy "Buy MFSL 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 MFSL 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
144813.0516124756693.1632156.99-8876.23-26899.380.752.260.052800.82
21222401614287.511979.6279155.67-22737.39-41170.430.533.690.077639.99
31311501613381.2512247.9669426.12-9357.98-22997.951.315.670.0938196.85
41394521613381.2513757.2862434.04-13130.93-25462.011.054.540.18715.74
5134981161247515773.153693.93-13574.07-24537.991.163.490.0958436.31
6182025161247517562.1352242.74-7180.07-17453.82.457.340.1411376.58
71923731614287.516180.4847043.65-17076.97-29055.440.956.630.1512023.3
82851531614287.522833.1853886.79-17255.87-22895.281.329.260.1817822.05
92891381614287.522832.9174264.15-15261.28-21252.571.510.470.1618071.13
102757511613381.2524229.9772679.25-13079.63-248461.858.030.1417234.42

From the table above, we see that best results are achieved by holding positions for 9 trading days. Profit factor is 10.47. Strategy is very good and impressively bullish. Percentage of profitable trades is 87.5%, which is excellent. Average return per trade is 9.04%, which is very good.
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.
MFSL Performance, X=9, Profit Factor:10.5

Yearwise Summary of trades in above chart

YearNumber of TradesTrade Dates
2020124 Mar 2020 (17.15%)
2018122 Mar 2018 (3.03%)
2016118 Feb 2016 (-4.63%)
2013225 Jun 2013 (7.55%), 06 Sep 2013 (16.31%)
2012102 Jan 2012 (3.81%)
2008127 Oct 2008 (27.26%)
2001309 Mar 2001 (-10.63%), 06 Jul 2001 (1.71%), 02 Aug 2001 (4.11%)
2000131 Jul 2000 (2.64%)
1998227 Jan 1998 (9.06%), 07 Jul 1998 (37.13%)
1996119 Aug 1996 (17.54%)
1995227 Nov 1995 (3.35%), 26 Dec 1995 (9.17%)

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-192891381614287.522832.9174264.15-15261.28-21252.571.510.470.1618071.13
atrnil27.81301810161247529497.5264239.05-13040.02-16962.32.266.790.1718863.13
atrtrail36.56234713161247523077.8896358.58-10555.47-14786.912.196.560.1114669.54
atrtrail25.88192608161247519569.1764239.05-10555.47-14786.911.855.560.1212038.01
atrtrail-17.81185211161247518952.7457347.52-10555.47-14786.911.85.390.1111575.68
atrnil311.253540191610662.543737.2896358.58-13892.38-16962.33.155.250.1322126.16

In the table above, row 1 shows the best exit criterion. Profit factor is 10.47. Strategy is very good and impressively bullish. Percentage of profitable trades is 87.5%, which is excellent. Average return per trade is 9.04%, which is very good.
Performance of strategy chart over time is same as above.

View performance of other stocks for this trading system.

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