Average Down — Strategy by BacktestRookies
By BacktestRookies
Performance Metrics
- Author: BacktestRookies
- Symbol: LSE:BRBY
- Timeframe: 1 day
- Net P&L: +31,194.00 NONE (+31.00%)
- Win Rate: 91.4%
- Profit Factor: 114.685
- Max Drawdown: 120.00 NONE (0.10%)
- Total Trades: 35
- Sharpe Ratio: 0.16
Description
This strategy has been published for a Pyramiding tutorial on the Backtest Rookies website. For a full overview of the code and an introduction to Pyramiding check out our site. SummaryThe code example will create a simple script that allows us to average down whenever our portfolio is down x%. The idea will be to bring our average cost down so that we can still exit with a profit when conditions improve. With this in mind, the strategy shall also have a simple take profit exit at x% above our average price. InputsTarget Loss to Average Down (%): This is the target percentage level will trigger us to average down. In other words, if we have a close below this level from our average buying price, we will average down.Target Take Profit: A standard take profit percentage level. Use this to set how much profit you will target.% Of Current Holdings to Buy: Is the number of shares/contracts we will aim to buy when we average down. 50 will mean we buy 50% of our current holdings. So if we have 100 shares, then we buy 50 when we average down.SMA Period: Defines our SMA lookback period. Our strategy will enter the first/initial position when we have a close above our SMA level.