Strategy backtest pt.8 - trade orders

In the former post about stop loss limits I presented an easy to use strategy, with a good DPI value. However, there was one difficulty for everyday use: Opening of trades has always been on the closerate. This is a quite difficult for several reasons...

...First: I have to be on eToro every night at 10pm. Second: Sometimes I tried to open a trade but couldn't do it immediately, because my internet was too slow or eToro asked for my password again. That means while trying to get as close as possible to the closerate I could possibly miss to open the trade at all. Therefore it is much easier to wait until the market is closed (10pm my time) and set an order for the opening of the next day. Since the market opens at 8am, I have 10 hours to set the order. Beside the advantage in applying the strategy, I expected the overall fees being much lower compared to an opening on the closerate. For my calculations I used the same strategy that I used in the former posts:

• market trend: bullish when rate > 50-day-EMA, bearish when <50-day-EMA
• open buy-trade on rate increase in bullish market
• open sell-trade on rate decrease in bearish market
• close trades on reinforced stop loss (different values) and take profit (10%)
• delay factor 0.018%

Only difference: Trades are opened on the openrate of the following day. Here are the results for different stop loss limits:

The general trend is the same: The tighter the stop loss, the better the result. But with the trade orders the overall performance is lower compared to the opening on the closerate (see former post for those results).

As expected the fees are lower when the trades are opened in the morning, while the number of trades is similar (see table below). The tighter the stop loss limit, the bigger the difference in fees. The explanation is simple: The tighter the stop loss, the more trades are opened (since the opened trades are closed earlier). When the trades are opened in the evening, the overnight fee have to be paid. On the contrary when the trades are opened in the morning and closed earlier, there are less open trades overnight, thus less overnight fee.



Even though the fees are much lower when trades are opened in the morning, the overall performance is better when the trade is opened in the evening. The reason for that is, that the gap between the closerate on one day to the openrate the day after offer a lot of potential gain.

Since the strategy is easy to handle in every days live, I already tried to apply it on eToro. Unfortunately there is a minimum stop loss limit of 0.5% for trade orders. As shown above the strategy is not profitable with this limit. Therefore I didn't really apply the strategy in real but will continue searching.

Do you have any idea for a good trading strategy that is solely based on technical analysis? Do you have strategy that you want to have backtested? Leave a comment and I am happy to perform the test for you!

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Links to former posts about my backtesting:

• stop loss limits
• delay factor
• market trend
• short trades
• stop losses
• long trade indicators
• performance index DPI
• backtesting tool

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Important remark: The results presented above and throughout my blog are no recommendation for your trading! I only share my personal findings and opinions to give ideas and let my followers and copiers know what I am currently working on. I can not guarantee the correctness of my tool and my presented results. Furthermore past performance is not an indication for future results. Only trade with money you can accept to loose!