Results – IDMM – ETFs Daily Directional Indicator

The Daily Directional Indicator Strategy uses the DDI to determine short-term market direction. This simulations places a trade in that direction.

Results

A look at the results shows a reasonable Win/Loss Ratio (1.21). As well as something to work with in regards to the Percent Profitable (55%).

Improving the Results

A stop-loss would likely improve the results drastically. Because we are attempting to take a trade in the longer-term direction, we need a way to control the risk in the event the market turns. Sizing a position properly would also improve the results. Adjusting the Entry to a pullback level would also likely improve the results.

In an additional study, we add an intra-day reversal filter to improve these results. To view this study, click here: IDMM-ETFs-DDIR Results (Coming Soon!)

During a brief career as a trader, Todd Hudson discovered that the analysis techniques used my most traders were inherently flawed. Oftentimes, the analysis resulted in guesswork. This often led to more questions than answers. After studying numerous methodologies and technical indicators, Todd decided to create a more scientific approach. This scientific approach would be based on risk management and historical patterns. This would allow traders to place trades using historical analysis of these patterns to determine future probable outcomes. The initial goal was to get a sense of the daily direction for intra-day trading.