Easy Trade Pro Strategy tests results (Intro)
In our testing of different assets, including the S&P 500, Forex, XAU, BTC, ETH, Futures, Indexes and several top 100 stocks and cryptocurrencies by marketcap, we have found that the performance of trading strategies can vary significantly depending on a range of factors.
There are thousands of possible combinations of buy entry signals, order sizing, stop losses, multiple take profits, trailing stops, other forms to protect the trade like adjust stop loss to the entry point once a gain of a certain % has been achieved, different timeframes and other variables that can impact strategy performance. Depending on the strategy and the asset being traded, traders may prefer to prioritize high win rates, net profit, low or high number of trades, low drawdowns or other metrics.
While it is difficult to provide an average or expected result for any given strategy, our testing has identified some approaches that have shown promise in certain market conditions. In the subsequent sections of this guidebook, you'll have the opportunity to explore a variety of strategy configurations tested across different assets and timeframes. This diverse range of analyses offers unique insights into how our trading system performs under various market conditions and can potentially help you to discover a strategy that aligns best with your trading style and goals.
It is important to note that backtesting results are not a guarantee of future performance, and traders should always exercise caution and conduct thorough due diligence before committing capital to any strategy.
By understanding the many variables that can impact strategy performance and conducting rigorous backtesting, traders can develop a more nuanced and informed approach to the markets. Through careful analysis of historical data and a willingness to adapt and refine strategies over time, traders can improve their chances of success and achieve their financial goals.
❗IMPORTANT❗
1) Our strategies have been tested with simulated leverage, but we've always adhered to a principle of preserving capital. We ensure that the risk per trade never exceeds 3%. While these simulations give an idea of potential leveraged outcomes in the spot market trading, it's crucial to remember that using leverage amplifies both potential profits and potential losses. For example, with x5 leverage, a net profit of 30% would translate to 150%. However, the same amplification applies to losses. Always approach leverage with caution and an understanding of the increased risks involved.
2) Our TradingView strategy studies primarily focus on timeframes from 5 minute to 1 hour, ideal for automated strategies. However, you're welcome to test these strategies on higher timeframes according to your trading preferences.
3) The initial capital and order size mentioned in our trading studies, such as $10,000 USD capital and $1,000 or $2,000 order size, are used purely as examples with round numbers for illustrative purposes. We encourage you to adapt the data to your own situation and choose the capital and order size that align with your personal trading preferences and risk tolerance.
4) Beware of unrealistic promises like strategy+ 90% win rates and + 500% net profits. They're often signs of misinformation. We stand for authentic, tested trading strategies.
6) Our recommendation for buy entries is to utilize custom orders such as 'Bullish Reversal' and similarly, 'Bearish Reversal' or 'Good Sell' for sell orders.
Signals like 'Great Buy' and 'Incredible Buy' are quite rare and typically unsuitable for automated strategies due to their infrequency. If you are inclined to try these orders, we suggest doing so on very low timeframes, such as 15 minutes or less, where they occur more frequently.
We have excluded the 'Great Sell' and 'Incredible Sell' orders from the backtesting system because these signals are not suitable for automated strategies due to their infrequent occurrence. However, in manual trading, these signals should not be underestimated when they do appear on the chart. It's beneficial to seize these opportunities and take advantage of these signals when they occur.
7) When evaluating a trading strategy's performance, it's essential to understand two key metrics: Maximum Drawdown and Maximum Underwater.
Maximum Drawdown refers to the largest drop from a peak to a trough in the cumulative profit over a specific period. It represents the greatest loss from a peak point to the lowest point before a new peak is achieved. It's a key measure of the riskiness of a strategy, as it gives an idea of the potential loss in a worst-case scenario.
Maximum Underwater, on the other hand, refers to the lowest point the cumulative profit dips into the negative before it starts to recover. This measure can help understand the resilience of a strategy during downturns and its ability to recover from losses.
While both Maximum Drawdown and Maximum Underwater provide valuable insights into a strategy's performance, in our case, Maximum Underwater might be a more important metric. This is because it represents the most significant actual loss suffered over the entire trading period. It essentially reveals the strategy's resilience and its ability to recover from this worst-case scenario. Understanding the Maximum Underwater helps us grasp the real risk we are taking on in the given timeframe, which is critical for managing risk and expectations.
For a detailed breakdown of individual trades, including points where the strategy was in negative profit, you can refer to the trades list in the provided PDF. This can provide a more granular understanding of the strategy's performance over time.
8) There are two primary ways to utilize the backtesting system on our trading platform: the Settings Menu and the Deep backtesting System.
a) Settings Menu: This method allows you to select a specific date range for backtesting from the settings menu of the indicator. However, it's important to note that the period of the study is subject to the maximum number of labels that can be displayed on the chart. Regardless of the date range set, the analysis will be restricted to the maximum label limit.
If you use this method of backtesting, the overview page of the strategy won't display the exact start and end dates of the testing period. Consequently, the overview lacks specific timestamps, as seen in the example below:
b) Deep Backtesting System: This feature enables you to delve into a much larger pool of data for backtesting purposes, surpassing the limitation of label numbers on the chart. This is an excellent option when you need a broader data set to validate the performance of a particular trading strategy over a more extended period, as seen in the example below:
In summary, when you see specific dates displayed in our analysis, it signifies the use of the Deep Backtesting feature. In other cases, where dates aren't explicitly mentioned, we've relied on the standard settings panel within the indicator's menu. Both methods have their unique strengths and are used appropriately in our strategic evaluation.
Please remember, as per the current TradingView subscription tiers, the 'Deep Backtest' feature is available only for Premium subscribers. Be sure to verify this information on the official TradingView website or with their customer support to keep up with any updates or changes.
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