Bullish Reversal Trading Strategy – (Backtest and Rules)

In this video, we'll be discussing the Reversal Day Trading Strategy (with complete rules and backtest), which aims to help traders make money on turnarounds. We'll be covering the complete rules for both bullish and bearish reversal day strategies, and backtesting them to see their efficacy.

We start by discussing the rules for a bullish reversal day, including the low being lower than yesterday's low, the close being higher than yesterday's close, and the five-day RSI being lower than 35. The green arrows on the chart indicate when to buy, and the red arrows show the exit after 5 days. We'll then discuss the trading statistics for this strategy in gold (GLD), using Amibroker's optimizer function and exiting after 1 to 25 trading days.

Next, we'll flip the rules for a bearish reversal day strategy, where the high is higher than yesterday's high, the close is lower than yesterday's close, and the five-day RSI is higher than 65. Again, we'll discuss the trading metrics for this strategy in gold (GLD), using the optimizer function.

We'll conclude by comparing the two strategies and discussing the factors that make it harder to trade from the short side, such as gold's long-term upward bias. We'll also mention that subscribers can access the code, courses, and more on our website.

If you're interested in learning more about the Reversal Day Trading Strategy and other trading strategies, please like and subscribe to our channel. Good luck with your trading!

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RISK DISCLAIMER
Quantified Strategies (SIA Lofjord) is not an investment advisor. The content and information provided are educational and should not be treated as financial advisory services or investment advice. Trading and investment in securities involve substantial risk of loss and is not recommended for anyone that is not a trained trader or investor – it shall be conducted at your own risk. It is recommended that you never risk more than you are willing to lose. Leverage can lead to substantial losses. Any use of leverage, margin, or shorting is at your discretion. Quantified Strategies (SIA Lofjord) is not responsible for any losses that occur as a result of its content and information.
Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, Since the trades have not been executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. No representations are made that any account will or is likely to achieve profit or losses similar to those shown.