The more underlying assets I analyze in a backtest, the more exciting the topic becomes. With each new strategy I can develop, the potential grows. And that’s exactly how you should create your own trading system. This can only be done through hard work and experience.

You know best which trading style suits you. Do you want action and try your luck in the 5-minute chart? Or do you have patience and can trade the 4-hour chart or even daily chart?

Then it also depends on the frequency: Do you need many signals or do you work according to the motto „less is more“? How often do you want to check the prices? Once at the end of the day or 6 to 8 hours per day?

I have also asked myself these questions before developing my trading systems. It has to fit into your daily routine, your sleep schedule, and how flexible or quick you can set up a trade. When the signal comes, it is usually the case that the entry must be made immediately or in the following candle. This is stressful and can lead to mistakes.

WTI trading strategy in the 30-minute chart That’s why I have chosen a different approach. Although I trade in the 30-minute chart, I don’t have to sit in front of the screen when a candle is completed. I receive signals in the respective charts or underlying assets, and even then I don’t have to act immediately.

For example, with my trading system for WTI, I use the signal candle as the basis and then observe how the prices move afterwards. Depending on whether it is a long or short signal, there are again 2-3 different rules that I follow to start a trade. This makes things much more precise and the current backtest is impressive.

Until the beginning of August, I traded the past year as a test. With a 3% risk per trade, this resulted in over 4,000 euros from an initial capital of 1,000 euros in nine months. In total, there were 35 trades, so about 1 trade per week. That’s enough for me. After all, there are also other assets that we can trade. Here you can see the current interim result.

I work with different CRVs (chance-risk ratios). Depending on how the prices move after a signal, I have to use a different CRV. But that’s not unusual. Sometimes it’s 2:1, sometimes 3:1. Plus a few exceptions.

Backtest analysis In the table, you can see once again how important it is to use as much data as possible. The first half of the year was fantastic. Then in the summer, there were more trades with losses. If we had stopped testing at the end of May, it would paint a completely unrealistic picture.

Overall, the result is still fantastic. This is naturally due to the high win rate and the high CRV. If we can already offset 2 losses with one successful trade, that’s optimal.

You may have noticed that I have over 100% losses in the table. This is because I rounded up – after all, trading fees are always added, even with a loss. So we are getting closer to realistic numbers. I also had 2 trades that were stopped out by just a few pips. This can go differently in practice and then we would have even more profit.

Why do we even do backtesting? Ultimately, it is about getting a rough orientation. Of course, the values from the past are not a guarantee for similar results in the future. Nevertheless, we need some kind of data to test whether a trading system generally works. If it didn’t work in the past, it probably won’t work in the future.

On the other hand, I at least have the chance that the market won’t completely reinvent itself as soon as I implement a successfully tested strategy with a real money account.

The post WTI trading strategy in the 30-minute chart appeared first on Investor Verlag.