Yesterday we looked at the raw version of the newly programmed indicator. We just blindly went into the trade according to the signal and it was already profitable. Today I have refined the strategy and look, we can still squeeze out a lot more!

As an entry point I have now chosen the 61.8 retracement of the respective movement. So if we get a long signal, I look at where the high point is and draw the Fibonacci to the last low. This then gives us the point we need for the entry. If we get a short signal, we do it the other way around.

Often the respective high or low to which I have to apply the Fibonacci retracement comes even after the signal. Then, for example, after the long signal the prices still run a bit high before there is a pullback. Here we take the new high and let us calculate the 61.8 from it.

I continue to open 2 trades when it comes to the entry. The first has a CRV of 2:1 and the second position has a target of 3:1. This is the picture that emerged from today’s backtest.

Optimized 1+3 strategy in 15-minute chart at DAX We had 20 trades since October with this system. 70 percent of them were successful. I continue to risk 3 percent of the depot per position. The exact value I risk per trade therefore changes logically. This has a good compounding effect. Initially, we risked 30 euros per position with fictitious 1,000 euro capital. In the end it was 129 euros!

(Source: Excel)

As you can see, there is much less red today. The maximum drawdown has dropped to 11.64 percent. We had two consecutive lost trades once.

Most of the 20 trades were also realistically feasible. We had 2 outliers, for example when the signal came at 3 a.m. We could have executed the trade at 6:30 a.m. if we had placed the buy order in the market by then. Something like this is hardly feasible in practice and doesn’t have to be either. If we miss a trade once, the world still turns.

What was a bit heavy though: We had only 1 signal between 28 November and 12 December. There was also only one between 10 and 20 November. If you know beforehand that there can be quiet times in between, that’s fine too. Better than 5 trades a day and half of them missing.

Fresh signal generated! I am currently waiting for a long entry. The following figures are without warranty or only as long as there is no new high in the DAX. The current high is at 16,760 points. As the last low I take 16,653. This results in a long entry at 16,694 points. This is the 61.8 retracement. Stop losses are 18.5 points. The targets are therefore 37 and 55 points above the entry.

If the DAX continues to rise, the values change because we have to draw the Fibonacci lines again – up to the respective high.