A super low drawdown strategy (less than 2%) and a high expectancy with good average yearly return that works in both high and low VIX market. Note: Slippage of 0.5% considered for the entire strategy.
Strategy Details:
| Capital required | 3 Lakhs approx |
| Time frame | Intraday |
| Instrument | Bank Nifty, Nifty, Fin Nifty |
| Backtesting period | 1 year (Dec 1, 2022 to Nov 30, 2023) |
| Slippage | 0.5% |
| Hedging | Yes |
| Backtesting platform | https://www.stockmock.in/ |
Backtested Result Summary:
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Key points:
| Avg Yearly Profit | 1,10,000/- (Approx) |
| Avg Yearly Return | 36% for 3 expiries (60% if extrapolated to all 5 expiries) |
| Max Drawdown | 1.8% (Approx) |
| Expectancy | 1.05 |
| Return to MDD ratio | 20.34 |
| Accuracy | 67% |
| Max loss | Rs.4366/- |
Monthly Breakup:
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Equity curve:
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Strategy Parameters:
| Instrument | Bank Nifty, Nifty, Fin Nifty |
| No. of daily entries | 4 |
| Entry Strike | Closest Premium (CP) |
| 1st Entry time | 09:50 AM with 100% SL |
| 2nd Entry time | 09:50 AM with 30% SL |
| 3rd Entry time | 10:50 AM with 100% SL |
| 4th Entry time | 10:50 AM with 30% SL |
| Nifty CP Value (for all 4 entries) | 15 |
| Bank Nifty CP Values (for all 4 entries) | 50 |
| FinNifty CP Values (for all 4 entries) | 20 |
| Exit time (All 4 strategies) | 3:00 PM |
| Hedge CP value for Nifty (all 4 entries) | 1 |
| Hedge CP value for BN (all 4 entries) | 2 |
| Hedge CP value for FinNifty (all 4 entries) | 1 |
Note : We make 4 entries daily with hedges on Nifty, BN, and FN expiry days with new strikes at different time and SLs. This is good from diversification perspective and limit loss during V,W,M,N shape markets.
Sample Entry:
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How to automate this strategy in Tradebots (Desktop)?
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- Login to Tradebots desktop version (WhatsApp us on 9398840360 to get free 7 day trial)
- Click on “Add Strategy” and a pop up will open as shown in the image
- First configure for 9:50 to 15:00 strategy – give entry time, exit time, SL and other parameters
- Make sure to check all days since this is a low drawdown strategy.
- Hit on “save” as shown in the image.
- Repeat same process to configure other 3 strategies as well – 09:50, 10:50 and 10:50
That’s it. Every day this strategy will automatically gets executed after you login.
How to automate this strategy in Tradebots (web)?
click on the image to enlarge
- Login to Tradebots web version (WhatsApp us on 9398840360 to get free 7 day trial)
- Click on “Add New Strategy” and a pop up will open as shown in the image
- First configure for 9:50 to 15:00 strategy – give entry time, exit time, SL and other parameters
- Make sure to check all days since this is a low drawdown strategy.
- Hit on “Add” as shown in the image.
- Repeat same process to configure other 3 strategies as well – 09:50, 10:50 and 10:50
Every day all 4 strategies get automatically executed after successful login.
Summary:
There are a few things that make this a good strategy.
- Ultra-Low DD – Drawdowns are ultra-low since we diversified into 100% SL and 30% SL in different time slot entries.
- Decent ROI- This strategy gave a decent return of around 36% in the last 1 year for Nifty, BN and FN. If other 2 indices are included, results can be extrapolated till 60%
- Good expectancy – Even after deducting 0.5% inbuilt slippage, this strategy has 1.05 expectancy which makes this one of the safest strategies.
- Return to MDD – This strategy has return to MDD ratio of over 20.
This strategy might be a good choice for high-capital traders or people with less-risk appetite. Since safety is the primary goal in this strategy, above 2 kinds of traders can consider adopting this strategy. Also note that since we have half qty trading with 30% SL, U,V,M,N shape markets won’t give so much loss
Want to see how to backtest this strategy in stockmock and automate in TradeBots tool?Watch this special YouTube video – https://youtu.be/UsFdFMS9NcY
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Good strategy