US30/US100 index trading
I'd like to share an idea. There's a basic approach that can be expanded into a portfolio of setups and various entry/exit points.
https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average
It is the nature of the index that it will always rise: inflation and reinvestment of dividends.
I have a benchmark that ideally should be outperformed. An index fund (ETF) that tracks the index. Example
https://www.justetf.com/ch/etf-profile.html?isin=IE00B53L4350
I'm backtesting from January 1st, 2021 to April 30th, 2026. This includes a lot of negative events like COVID, the US tariff war, and the current war.
The buy and hold strategy made 76.89%.
In the basic setup, we open a trade early in the morning and close it in the evening. To see the maximum drawdown, the stop loss is large (2.5%).
Das Ergebniss:
If you look closely, the account movement from the backtest closely resembles the index development in the graph above.
I made the backtest with 5000 USD and 1 Contract. If we invest $5000 in both instruments, we'll have roughly double the profit.
Now you can optimize this and divide the lot size across different scenarios.
Here's an example:
Trade only on Mondays and Wednesdays, Antimartingale, Limit Order below the 6-minute candle. ADX as a trend filter.
You see a much better draw down and even a higher profit. And 3 days left for another strategie.
Setfile with features
another Eaxmple:
You can simulate a Martingale system using limit orders. The first trade is not included in the backtest results, allowing us to examine the effect of the Martingale trade in isolation. You see how often triggered.
This Backtest with Limit Order 0.8% below market.
Set limit order