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Backtesting our Strategies

Prime Trend and Prime Reversal indicators have been designed to function across various markets and timeframes. In the interest of transparency and honesty, we are providing a small sample of historical performance of our indicators. Our intention is to present some backtests without selectively choosing the best-performing assets or optimizing the take profit and take loss parameters.

The historical backtests listed below showcase the performance of our Prime Trend and Prime Reversal indicators. There's no repaint as trades are confirmed at the candle close. These backtests do not involve simultaneous usage of both indicators and does not use risk tools for managing positions. Please consider this information for informational purposes only. 

It is important to note that backtesting strategies have inherent limitations and should not be solely relied upon for making investment decisions. Factors such as liquidity, fees, slippage, and market conditions can significantly impact the performance of a strategy in live trading scenarios, which may differ from the historical backtest results. Backtesting serves as a tool to provide a glimpse of the historical performance of a strategy, allowing users to assess its potential effectiveness under past market conditions. It is crucial to recognize that past performance DOES NOT guarantee future performance. 

All of the backtests presented herein are provided for educational purposes only and should not be construed as investment advice. These backtests were performed using the TradingView's 'Strategy Tester' feature and are based on regular closing prices with no transaction fees and using 100% of funds for each trade. 

Prime Trend : BTC/USD Daily performance on Long Time Frame setting

Bitcoin, BTCUSD backtesting strategy on the weekly timeframe. Showing good results as it buys when the trend is bullish and sells when the trend is bearish (down).

This strategy goes long Bitcoin when the trend becomes green, and the position is closed when the candle changes color. When the candle is red, a short position is initiated, and the position is closed when the candle changes color. The strategy's maximum drawdown can be attributed to the use of short positions during short-lived red candles, which results in the price swiftly reversing in the opposite direction. Going short is typically riskier than going long since assets tend to have an upward trend. Short trades can be profitable during a recession but can also be detrimental to the strategy if incorrect. Additionally, it is important to mention that the strategy assumes 100% shorting of the position, which typically requires leverage.

For all the posted results, implementing our Risk Tools can significantly improve drawdowns and percent profitable. Overall, this strategy is less volatile than the standard buy and hold approach. It's worth noting that Bitcoin's largest drawdown was 93%.

 

 

Prime Trend : SPY Weekly performance on Long Time Frame setting

This strategy involves going long on the S&P 500 when the trend turns green, and the position is closed when the candle changes color. Conversely, a short position is initiated when the candle is red, and the position is closed when the candle changes color.

 

When analyzing stocks on the weekly timeframe, red candles carry greater significance as they are less frequent. While false signals can still occur, red candles often indicate increased volatility and downward price movement. Thus, avoiding long positions during red candles can be advantageous for long-term strategies.

SPY Weekly Long short performance.PNG

Prime Trend : Google 15 Min performance on Short Time Frame setting

Google 15 min Trend longshort.PNG

This strategy involves going long on Alphabet stock when the trend turns green, and the position is closed when the candle changes color. Conversely, a short position is initiated when the candle is red, and the position is closed when the candle changes color. This strategy is implemented on a smaller time frame, specifically the 15-minute chart.

 

The strategy's maximum drawdown is higher due to the short positions taken on red candles, where the price quickly reverts in the opposite direction. When working with smaller time frames, there are increased risks associated with going short, as prices can swiftly reverse. This naturally affects the overall profitability percentage. Shorting on smaller time frames is challenging and requires effective risk management to execute successfully.

 

Google 15 min Trend longshort_detail.PNG

Prime Reversal : AAPL 30 min on High asset volatility setting, long only 

30 min AAPL Prime Reversal long only.PNG

This strategy involves going long Apple stock when there's a bullish reversal (normal or strong) and closing the position when the stop loss or take profit target is hit. By setting a reward of 2% and a stop loss of 1%, this strategy has yielded positive results in the past. Bullish reversals tend to coincide with significant stock movements. This strategy's statistics can be further improved by using Risk Tools or having a prior knowledge of the trend before executing trades. Short trades are excluded as these are riskier trades on shorter timeframes.

 

Prime Reversal : GLD Weekly on Normal asset volatility setting, long & short 

GLD Weekly Long short reversal 6 take 3 stop.PNG

This strategy involves going long gold when there's a bullish reversal and going short when there's a bearish reversal. The position is closed when we hit the stop loss, take profit or when there's a opposite reversal signal. By setting a reward of 6% and a stop loss of 3%, this strategy has yielded positive results in the past. We maintain a 2:1 reward to risk ratio when backtesting these strategies as it is good practice for risk management. 

 

Prime Reversal : USD/EUR Daily on Normal asset volatility setting, long & short

This strategy goes long USD/EUR pair when there's a bullish reversal and goes short when there's a bearish reversal. We did not include weak signals in this backtest. Similar to the last strategy, the position is closed when we hit the stop loss, take profit or when there's a opposite reversal signal. We set the take profit to 4% and stop loss to 2%. 

USDEUR Daily Short + Long No Weak.PNG

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