Joy Bangla

Apr 8, 2021

3 min read

Analyse ETHUSD exclusively using Super Algorithm Indicator

Super Algorithm is my indicator that I extensively use for my trading. Below is a detailed step-by-step analysis of ETHUSD using the indicator. By the end of the article, you will have a clear understanding of the reasons for the currently running trade.

The Super Algorithm Indicator is my indicator that is also available for trial.
Link: https://www.tradingview.com/script/3j6tDmGb-Super-Algorithm/
Official documentation: https://1drv.ms/w/s!AsYFY2urkUw_lqwVNBKWZUYuWLtKHg?e=uVTmMp

Background

A few days back, the Super Algorithm Indicator had sent a bullish alert in my free telegram channel https://t.me/jbalerts/3408.

I went long immediately after doing the following analysis.

Considerations

Starting Investment: Let me take a hypothetical situation of starting investment of $10,000.

Criteria:

  • I only go long when the indicator says long on candle close.
  • I take some profit along the way.
  • I close the position when the indicator says bearish on candle close.

Timeframe Used: 1Day timeframe

Upon running the backtesting script on ETHUSD Coinbase data from 2016 till today, I get the following output.

Overview

The overview provides the following information:

Profitability: 82.22%. I call this my accuracy rate. In other words, out of 100 trades, it had 82 trades that ended up in profit.

Total closed trades: 45. So, at least 37 out of 45 trades went into giving some profit. Eight trades went into loss.

Net Profit: The net profit was $ 243,930.79 or 2439.32 %. It is around 487% non-leverage average profit every year.

Average Trade: $ 5420.68 or 54.21 %

The above data on profitability, net profit, and average trade fall within my requirements to continue my analysis to determine the stop loss and target profit.

Performance Summary

Performance summary provides the following information that is also available here https://1drv.ms/x/s!AsYFY2urkUw_lq0SXgQ-yVudZyhRGQ?e=LiU8U6

Sharpe Ratio

The 0.446 is an ok shape ratio considering this is a crypto market with abundant volatility.

Average Winning Trades: 80.03%. I like 80% profit on 82.22% accuracy.

Average Losing trade: 65%
Max Drawdown: 33.59%
Keep on reading for ways to reduce these numbers.

Ratio Avg Win/Avg Loss: 1.231

List of trades

The complete list of trade is provided here https://1drv.ms/x/s!AsYFY2urkUw_lq0SXgQ-yVudZyhRGQ?e=LiU8U6

I notice that once the drawdown went above 13.77%, trades went into more significant losses. Hence, as long as drawdown stayed within 14%, I have significant profits.

Let us work with the run up%.
Average = 315.525%
Mean = 73%
Median= 64%
Min Run Up= 3.44%
Max Run Up= 4911.93%

Let us consider the above data as potential targets starting from 3.44% up to 4911% profit. A 14% drawdown takes us to below $1835 which is also interestingly below daily Kijun (Ichimoku). We all know that Kijun is a great place for a potential bounce if ever needed. Targets range from $2208 up to $106,968. I am not degen to consider $106,698 as my target. I would potentially be using Fib to do price discovery and have considered $7603 as my ultimate target.