Oversold Buy Trading Results YTD

Oversold Buy Signal Backtest Results

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Objective - Test the validity of the Chaikin Oversold Buy signal for short term bullish trades held for 2 weeks to one month.  

Entry Criteria
  • Oversold Buy Signals January 1, 2016 - May 28th 2016
  • Optionable underlyings trading 1 million shares or greater per day
  • Power Gauge  must be green at the time the trade taken
  • Money Flow must be green at the time of the trade
  • Relative Strength must be positive 
  • Price must be above the Chaikin Long Term Trend.
  • Stock must match oversold buy signal requirements. 
  • Earnings dates had no bearing on stock selection.   
​Testing Parameters
  • Since Chaikin Analytics is an End of Day system, we entered positions that met the above criteria the following trading day at the close.
  • We  closed the positions 14 calendar days later (at the close) or the first trading day when the exit date fell on a weekend.    This was to simulate the typical swing trade
  • We also sold stocks 30 calendars days after the OSB trading signal  (at the close) or the first trading day when the exit date fell on a weekend.    This was to simulate the typical holding period for a sold put or put spread. 
Results
  • 2 week exits
    • # Winners 30
    • Avg Gain 3.69%
    • # Losers  17
    • Avg Loss -3.17%
  • ​30 Day Exits
    • # Winners 33
    • Avg Gain 5.56%
    • # Losers 14
    • Average Loss 5.34%
  • Conclusion
    • The win rate is sufficient enough to forward test the Chaikin OSB signal using risk defined options, options spreads and possibly cash secured naked puts. following the rules of the test.  We might add some option trading rules to optimize the results using this signal. 

Oversold Buy Signal - Exit After 14 Days

Overold Buy Signal - Exit after 30 Days