Low-High-Trend Strategy by TradeAutomation
By TradeAutomation
Performance Metrics
- Author: TradeAutomation
- Symbol: NASDAQ:AMZN
- Timeframe: 1 day
- Net P&L: +2,282,425.85 USD (+8,487.70%)
- Win Rate: 100.0%
- Profit Factor: 2,120,032.82
- Max Drawdown: 1.00 USD (0.00%)
- Total Trades: 41
- Sharpe Ratio: 0.378
Description
Nov 10, 2021When asked what the key to successful investing was, Warren Buffet famously said “buy low, sell high.” Was he onto something? Today I am sharing with the community a simple “buy low, sell high” strategy with an optional trend filter and take-profit target. I’ve found that this strategy works well in a variety of markets but has a higher tendency to out-perform buy & hold in markets that are ranging sideways. How it works:The strategy tracks the highest and lowest price over the last X number of bars (you select the look-back period). The highest price line is plotted in green and the lowest price line is potted in red. If the price crosses over the lowest price in the last X number of bars, then a buy signal is generated. Exit options include a take-profit % or selling when the price crosses over the highest price in the last X amount of bars. I.e. “Buy low, sell high.” An EMA is also plotted as a blue trend line, and there is an option to only trade if the price is above the EMA trend line. Disclaimer: Open source scripts I publish in the community are largely meant to spark ideas that can be used as building blocks for part of a more robust trade management strategy. Even though this example script beats buy and hold over the back-test time-frame, I wouldn't advise using it as a stand-alone strategy without significant additions/modifications to the strategy and risk management functions. In this example the script is being used as a medium-term strategy with just 10% leverage over account equity, a $25k start balance, and back-testing 10+ years. Modifiable slippage and commissions are included in the model.Green line = Highest price in the look-back periodRed line = Lowest price in the look-back periodBlue line = EMA TrendJan 9, 2022Release NotesUpdate - Increased the model initial capital and the changed the default trade size to 100% of equity so that the script will run on more assets.