Lotmatik – Strategy Long Only

  • Add the strategy to your chart titled as “Lotmatik – Strategy Long Only”
  • Add the alarm script to your chart titled as “Lotmatik – Strategy Long Only – Alarm Script” (If alarm script changes the scale of your graph, then please choose “No Scale” option under “Pin To Scale” section)
  • The alarm script also indicates the entry value (green) and exit value (red), otherwise both indicate 0.
  • Choose your time frame (e.g. 5 min as above).
  • Create your “Buy” and “Sell” alarm (alt+A) as the following under “Long Only – Alarm” condition:
  • It is always better to choose the option “Once Per Bar Close”, since the strategy enters and exits according to the bar close value as you would expect. Other 3 options trigger alarms right after when alarm condition is met, however this condition could definitely change in a bar duration.
  • You may adjust the message.
  • Add “Sell” alarm similarly:

Strategy Tester (Backtesting: Choosing the right timeframe)

  • As nobody is capable of knowing what future brings, all we have left is to give shots on it, depending on our past experiences. This is what strategy tester/backtesting is all about.
  • For example:
  • As you see, Lotmatik Strategy completed 26 trades, out of which 16 is winning (i.e. 61.54% profitable), giving a net profit of 52.4% in 3-minute timeframe for TSLA.
  • You may adjust the starting date of this test in settings:
  • Under “Properties”, You may adjust the inputs such as “Initial Capital”, “Order Size” and “Commission” values:
  • You can also use the Lotmatik Strategy for Forex pairs profitably. For example Bitcoin/USD:
  • As you see, Lotmatik Strategy completed 50 trades, out of which 37 is winning (i.e. 74% profitable), giving a net profit of 37,84% in a 1 minute timeframe for BTCUSD.
  • Please bear in mind that there is a backtest limit on number of bars. Therefore, there is a limit you can go back depending on chosen timeframe. Under the “List of Trades”, we see that the test starts at the date of 2020-03-16.
  • However in the settings, start date is set as 2019-03-16.
  • If you choose 5 min timeframe for testing, it goes back to 2020-02-17:
  • So, when comparing two timeframes, you should set the start date, the same as the start of smaller timeframe (1min in this case) for a fair comparision.
  • Another parameter to check we think it is important when analyzing performances of strategies is that the “Buy and Hold Return” row at performance summary. It shows the result, if you did no trade at all from the start date of strategy. If this value is greater than your net profit, it frankly means that it would have been better if you had no trade and just buy and wait, and it is only the brokers you made happy.

Use EasyCate to decide which stock/forex pair to choose

  • As You would guess, there is a possibility that the market was bullish during the backtest period, and it might be entering a bearish one today and vice versa. So, you might want to check the bigger picture while deciding which investment pair to long.
  • If we go back to TSLA example, let’s say you decided to trade on 5 min, and backtest results seems profitable. So, the questions to ask are “Has it been a bullish market since the start date of strategy tester?” and “How about nowadays?”
  • To answer, use EasyCate indicators (all of them or just your favorites) in a bigger picture timeframe (e.g. 1h, 1D, 1W etc). This is how it looks on 1 day timeframe:
  • We can see that it is more greenish (bullish) market since October, and it has started to go red (bearish) since early March, but there are signs of turning back nowadays. Therefore, we might expect to get similar results as in the strategy test, if we start to trade long positions in smaller timeframes, as market is getting more greenish (bullish).