Before I begin, read the following.
Important! The script for this strategy is only intended to work correctly for the monthly time period and does not work for other time periods, as it is based on monthly data.
This strategy is simple and based on monthly buy and sell. However, the strategy is only intended to go long and no short positions are therefore possible.
This strategy is perfectly suited for all indices, but also for cyclical companies and cyclical markets.
You do not need to use this strategy for a buying signal only. You can use this for a more comprehensive analysis of how return per month has looked historically. It's easy to analyze, by flipping through all the months of the year. You will see average return per month, but also the largest return and decrease for each individual month.
It is also possible to choose between which time periods you want to analyze. You can go all the way back to the year 1900.
This is necessary if you are going to analyze markets that have a long historical data to analyze.
How it works
1. Start by choosing which time period the analysis or strategy should apply between.
2. Choose which month the first and second buy will be valid from. Here it is important to know that depending on which month you choose, is meant a buy after the current month's closing.
Example: 1 = January. Buy will therefore be after January closes, ie the first trading day in February. It will be displayed as 1st trading day in February. If you only want one buy option, then choose the same month for both first and second buy.
3. Choose which month the first and second sell will be valid from. The same applies here as above.
4. Choose money management according to the criteria that suit you and press "OK".
Based on the choices you have made, you will now get a result of how the strategy has performed over the given period. You will be able to read following data.
Start Capital -the trading capital you have from the beginning.
Actual Capital -the current trading capital you have at the moment.
Growth -percentage growth over the total trading period.
Annual growth -average return for the chosen period.
Profit factor -the profit factor looks at the total gains and losses.
Payoff ratio -looks at the average profit and loss.
Expectancy per trade -the expected profit or loss of a single trade.
Expectancy in total based on number of trades -the expected profit or loss for all the trades made.
Expectancy ratio -the power of an edge. With this, you are always looking for a positive expectancy to show you that the trade is profitable.
Expectancy % -the expected return in percentage based on all the trades
Maximun drawdown -drawdown for a single trade based on current trading capital
Fractional Kelly Criterion -the optimal amount to invest based on the strategy and multiplying it by a certain fraction (%). This results in less volatile returns and a lower chance of the account balance hitting zero.
Kelly % -percentage of capital to be put into a single trade.
Risk of ruin -the chance that you will lose all the amount you typed in for "Maximum loss of portfolio".
It is important to know if you have an edge in your strategy and above all to understand risk. With the help of all this information, it will therefore be easier to adapt the risk to the strategy, not the other way around. This approach applies to all types of strategies. Be aware of the risk, first!
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice. Past performance is not indicative of future results.
Educate yourself on the risks associated with trading, and seek advice from an independent financial or tax advisor if you have any questions.
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Access to this script is restricted to users authorized by the author and usually requires payment. You can add it to your favorites, but you will only be able to use it after requesting permission and obtaining it from its author. Kontakta Investoz för mer information eller följ författarens instruktioner här under.
TradingView does not suggest paying for a script and using it until you 100% trust its author and understand how the script works. In many cases you can find a good open-source alternative for free in our Public Library.
During the month of October, I had this strategy on a trial period for some users. Please tell me what you thought of it and leave a comment if you found this useful. If you are not satisfied, also leave a comment if something should be improved.
Warning: please read before requesting access.