Cutting-Edge AI Strategies for Finding Promising Stocks Through Price Action Insights

"Example of Backtesting for Price Action (TA&FA)"
The swing trading strategy, which leverages both technical analysis (TA) and fundamental analysis (FA), has been backtested over a period spanning 2209 days, from May 18, 2018, to June 5, 2024. Each trade executed within this strategy involved an investment of $10,000. The simulated performance data reveals substantial insights into the effectiveness and profitability of this trading approach.

Over the specified date range, the strategy demonstrated remarkable performance, resulting in a total net profit of $3,009,580.74. This figure includes closed trades profit of $3,008,594.74 and open trades profit of $986.00. The strategy engaged in 47,205 trades with a maximum of 136 trades open at any given time. The Sharpe ratio, a key indicator of risk-adjusted return, stands at 0.97, highlighting the strategy's efficiency in generating returns relative to its risk.

The strategy's annualized return was an impressive 56.86%, with an average trade profit of $63.78. The average duration for holding each trade was two days, indicating the short-term nature of the swing trading approach. Profitable trades constituted 47.10% of the total trades, while the loss trades accounted for 52.90%. The profit factor, which is the ratio of gross profit to gross loss, was 1.50, signifying that the strategy made 1.5 times more profit than it lost.

Further analysis shows that the average trade profit was $408.41, whereas the average trade loss was $243.09. The strategy performed better in short positions, winning 53.77% of the time compared to 42.72% for long positions. The absolute drawdown, which measures the largest drop from a peak in the portfolio value, was $181,356.42, and the maximal drawdown per trade was $192,685.14. The profit to drawdown ratio was 16.59, indicating a strong capacity to generate profit relative to the drawdown risks.

The strategy's maximum consecutive wins and losses were 85 trades ($61,781.44) and 59 trades ($92,784.36), respectively. The largest profit and loss in a single trade were $19,750.94 and $91,356.38, respectively, showcasing the potential volatility and reward of individual trades.