Results – IDMM – ETFs Post Reversal

The Post Reversal strategy requires that during the previous trading session there is an Intra-Day Reversal. This rule often overrides all other rules. Our research shows there are not many back-to-back intra-day reversals.

Results

A look at the results shows us that there is a very good Win Rate. The Win/Loss ratio is certainly something to work with. When you look at the results of this strategy, you realize that it is a very powerful approach. There are however, not very many trades. There were 1.3 trades per week on average.

Improving the Results

A few ways to improve these results would most likely to enter on a pullback. You can also size the position according to the percent win rate. Adding a stop-loss and profit target would also be beneficial.

Something to Think About

What patterns typical occur after an intra-day reversal? Could we determine what type of pattern may occur based on the data that we are given?

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.