“Me and my brother had developed a trend following system for intraday based on structural pivots…”

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Hello sir,

I am J. from India. I have watched your face to face podcast with Vivek Bajaj. The concepts that you said in it were amazing. And after that I found your website and listened to your podcasts and interviews which are informative.

From the past few years, me and my brother had developed a trend following system for intraday based on structural pivots and we back tested it. It showed good results and we started implementing it in live markets. But for the last eight months we got huge drawdown more than what we got in backtest results. Then we modify the strategy from structural pivots to previous day high low and backtested it for past 6 years it gave better results than previous method and gave profits in those eight months where previous method was in loss. From July we started new method in live markets and it was good.

Our trend following method has a risk to reward of 1:2.3 and accuracy of 40% from 2018 to 2020 August and RR of 1:2.3 and accuracy of 36% from 2020 Sep to till now. So do you think thank that in coming months the strategy will lose its edge or it is just a period with less accuracy? And also we are testing this method in S&P500 and nasdaq–their results are excellent.

J. K.

I have no idea if your strategy is valid, but testing on only two stock indexes is a red flag! And of course, day trading is an even bigger red flag.

Filed under Trend Following