Locking in Gains: Navigating a Profitable Short Position
Short entry: 1630.6
Why? - The RSI Diverged down on a higher timeframe and trend was confirmed by ATR on lower timeframe, implying that increased volatility is supporting the potential trend reversal indicated by RSI.
Take profit (optional): Sold 30% of position at 5% profit.
Current Trailing stop loss is lower than the entry point.
When the trailing stop-loss converges with the entry point of a position, it continually secures profits and minimizes losses, enhancing the likelihood of overall gains by safeguarding capital and sustaining a favorable risk-reward ratio.
The position is now in profit no matter what the market does.
Remember friends, trading a proven backtested strategy is more likely to work than emotional trading because it removes emotional biases, emphasizes disciplined risk management, encourages objective decision-making, and offers a sustainable, long-term approach to trading. Traders who prioritize consistent strategies are better equipped to navigate the complexities of the financial markets and achieve their financial goals with greater confidence and reliability.
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Past Performance of this strategy (substantiated by the backtest)
Trading range 2020 - Sep 9 2023
Net profit - 4073.25% (1x Lev) 105581.25% (3x lev)
Total closed trades: 163
Percent profitable: 46.01%
Profit factor: 2.308 (1x lev)
The strategy backtest shows the following net profits when looked at year by year. (substantiated by the backtest)
2020-2021 : 191.59% (1x lev): 356.47% (3x lev)
2021-2022 : 179.73 (1x lev): 438.9% (3x lev)
2022-2023 : 219.15 (1x lev): 1189.02% (3x lev)
2023 - Sep 9 2023 : 54.41% (1x lev): 196.57% (3x lev)
The backtest results show that the strategy has been consistently profitable year on year since 2020.
Portfolio Reinvestment for Compound Growth:
The strategy allocates 95% of the portfolio's capital to each trade.
This approach maximizes the potential for compound growth, as a significant portion of the available capital is reinvested in each trade, provided that risk management rules are satisfied. This approach is appropriate for this strategy as strict risk management is applied and the winrate is almost 50%
Accounting for Exchange Fees:
Exchange fees, set at 0.1%, are factored into the strategy's calculations.
This ensures that trading decisions take into account the cost of executing trades on the exchange.
Avoiding Lookahead Bias and Repainting:
The strategy is designed to prevent lookahead bias by making calculations based only on closed bars of price data. Lookahead bias occurs when future data is used to make past trading decisions, potentially leading to unrealistic expectations.
Why? - The RSI Diverged down on a higher timeframe and trend was confirmed by ATR on lower timeframe, implying that increased volatility is supporting the potential trend reversal indicated by RSI.
Take profit (optional): Sold 30% of position at 5% profit.
Current Trailing stop loss is lower than the entry point.
When the trailing stop-loss converges with the entry point of a position, it continually secures profits and minimizes losses, enhancing the likelihood of overall gains by safeguarding capital and sustaining a favorable risk-reward ratio.
The position is now in profit no matter what the market does.
Remember friends, trading a proven backtested strategy is more likely to work than emotional trading because it removes emotional biases, emphasizes disciplined risk management, encourages objective decision-making, and offers a sustainable, long-term approach to trading. Traders who prioritize consistent strategies are better equipped to navigate the complexities of the financial markets and achieve their financial goals with greater confidence and reliability.
----------------------------------------------------------------------------------
Past Performance of this strategy (substantiated by the backtest)
Trading range 2020 - Sep 9 2023
Net profit - 4073.25% (1x Lev) 105581.25% (3x lev)
Total closed trades: 163
Percent profitable: 46.01%
Profit factor: 2.308 (1x lev)
The strategy backtest shows the following net profits when looked at year by year. (substantiated by the backtest)
2020-2021 : 191.59% (1x lev): 356.47% (3x lev)
2021-2022 : 179.73 (1x lev): 438.9% (3x lev)
2022-2023 : 219.15 (1x lev): 1189.02% (3x lev)
2023 - Sep 9 2023 : 54.41% (1x lev): 196.57% (3x lev)
The backtest results show that the strategy has been consistently profitable year on year since 2020.
Portfolio Reinvestment for Compound Growth:
The strategy allocates 95% of the portfolio's capital to each trade.
This approach maximizes the potential for compound growth, as a significant portion of the available capital is reinvested in each trade, provided that risk management rules are satisfied. This approach is appropriate for this strategy as strict risk management is applied and the winrate is almost 50%
Accounting for Exchange Fees:
Exchange fees, set at 0.1%, are factored into the strategy's calculations.
This ensures that trading decisions take into account the cost of executing trades on the exchange.
Avoiding Lookahead Bias and Repainting:
The strategy is designed to prevent lookahead bias by making calculations based only on closed bars of price data. Lookahead bias occurs when future data is used to make past trading decisions, potentially leading to unrealistic expectations.