Pairs on Daily Chart
In this post, I’ll show you my real outcomes from backtesting the RSI Divergence technique on 27 money sets. The test had a general +235.39% aggregate return, demonstrating this could be a practical RSI technique for swing exchanging.
Yet, recollect that great backtesting results don’t ensure accomplishment in live exchanging. Continuously test techniques for yourself, never trust anybody that says a methodology works (counting me). You may have an alternate perspective on showcase, which will make you exchange it an alternate way.
Backtesting additionally serves to:
Show you if a technique has an authentic edge and works for you
Give you a reference point to look at your live exchanges
Construct your trust in exchanging a procedure
Give you practice with an exchanging technique (in any event, when the business sectors are shut)
Just honestly, this was a manual backtest.
I may attempt to mechanize this procedure (or do Incremental Automation) later on, however I was searching for a manual exchanging system, with the goal that’s the means by which I tried it.
The RSI Divergence Swing Trading Strategy
There are some exchange section channels that may make my entrances unique in relation to how different merchants exchange it, so make certain to reference the methodology blog entry on the off chance that you have any inquiries.
I just tried this methodology on the day by day graph.
For this round of testing, I just utilized 2 devices:
Forex Tester accelerates the procedure via consequently recording your exchanges, computing details and gives you a simple method to download authentic information.
You can likewise utilize different stages like TradingView or MT5, however the procedure will be more slow in light of the fact that you need to refresh a subsequent spreadsheet to record your exchanges.
I just utilized Numbers to record the aftereffects of testing, so I could get sums and midpoints.
Recorded Time Period
I tried each pair with as much recorded information as possible get my hands on.
The vast majority of the significant money sets were tried from 2003. The crosses and progressively colorful sets were tried from 2006, and a couple began as late as 2012.
That is the information that Forex Tester had accessible, so’s what I utilized.
Since this test was done on the day by day outline, each pair could be tried in around an hour and a half. So the absolute test took around 40 hours.
When testing the day by day time span and higher, it’s conceivable to test the entirety of the information in a sensible measure of time, so I do a total test.
In case I’m trying a lower time span, I for the most part “spot test” certain date extents to get a decent vibe for how well the technique functions, without sitting around.
The most significant thing to note here is that most exchanging systems out there are anything but difficult to learn.
Be that as it may, most new merchants don’t comprehend the extra work that goes into acing an exchanging methodology.
Testing and rehearsing a technique requires some serious energy.
Any individual who discloses to you that you can become familiar with a system today and be fruitful tomorrow is straight-up deceiving you.
So on the off chance that you are not kidding about turning into a fruitful broker, you have to invest the effort to test and practice.
By and large Stats
Before we begin diving into the outcomes from every money pair, here are the general details:
Normal win rate per pair: 78.74%
Normal return per pair: 8.71%
Normal number of exchanges per pair: 14
Absolute number of exchanges: 373
Absolute return: 235.29%
Since this is a swing exchanging procedure, a lower number of exchanges every year is normal.
The yearly return may likewise appear to be somewhat low to certain dealers.
Before you discount this technique be that as it may, think about this:
You can generally include more techniques later
This may likewise take a shot at lower time periods
You may have the option to include more money sets
You may have the option to build the arrival on each exchange
Be that as it may, these underlying outcomes are strong and worth pushing ahead with. Presently we should get into the particular outcomes by cash pair.
First how about we take a gander at the success rate. The success rate for this system was truly high, averaging about 79% per pair.
So this is conceivably a decent system for dealers who like to win a ton.
Later on, I could test going for greater successes per exchange, however at a lower win rate.
In any case, until further notice, I like these outcomes, so I’m going to push ahead.
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Presently how about we take a gander at the all out return for each pair.
Once more, these profits look low provided that you partition every one of them by the quantity of years tried, you get a tiny number. Notwithstanding, in the event that you include the entirety of the sets together, the normal is about 13% every year.
Not very pitiful for one straightforward swing exchanging procedure. Include a couple more systems with a comparable return and you can conceivably beat many store chiefs.
Obviously, you could sift through a portion of the lower performing sets, to conceivably support the exhibition of the procedure.
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Number of Trades
At last, how about we investigate the quantity of exchanges that were executed for every money pair.
A few people may state this is certifiably not a substantial test in light of the fact that there weren’t sufficient exchanges per test to accomplish a sufficiently high degree of certainty. There is some legitimacy to that contention… on the off chance that I just tried 2 or 3 sets.
In any case, when you test a similar procedure across 27 sets, you can get a large enough informational collection to make some factually substantial ends. Since there were 373 exchanges this round of testing, that is all that anyone could need exchanges to warrant proceeding onward to the subsequent stage of forward testing (or beta testing).
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Last Thoughts on this RSI Strategy for Swing Trading
Since my testing shows that RSI Divergence is possibly a decent swing exchanging technique, the subsequent stage will be to put these into forward testing to perceive how well this functions.
On the off chance that you need to talk about RSI Divergence consistently, join the private gathering. It’s free and can assist you with finding new arrangements and study this procedure.
Continuously do the forward testing step before going live.