05 May A Ridiculous RSI Portfolio
A Ridiculous RSI Portfolio
May 5, 2023
In our last Newsletter, we did something moronic.
We used the RSI in a traditional way (buying in Oversold), and we went Long-Only on a Daily Forex instrument (the AUDJPY).
While it’s perfectly fine to only go Long in stocks (the market always goes up, after all), it’s not fine to go Long Only in Forex.
Fx doesn’t have a long-term bias, silly.
And yet it does.
The AUDJPY had a Profit Factor over 1.5 (which is very good).
But my silly, ridiculous system only made about 100% since 2003. ChatGPT can make that in five minutes.
What if we double down, though?
What if we added more charts and made a ridiculous portfolio?
Let’s find out.
First, we’ll use the same exact settings as we used on AUDJPY. This is also dumb because each instrument is very different and “relative strength” means completely different things to different pairs.
Then we’ll add pairs that I’ve heard of (nothing exotic).
So, if we keep it the same and add EURJPY, GBPUSD, GBPJPY, NZDUSD, USDCAD, USDJPY, what do we get?
Using Portfolio Tester to upload results into Portfolio Architect, here’s the Report using 1 lot each time from 2003-2023 on a sample $20k account:
A few takeaways.
One, the Profit Factor has remained high. There’s no getting around it, ridiculousness hypothetically makes money.
Two, the win rate is still quite high. That’s nice psychologically.
Three, using RSI this way opens the door to potentially big winning years and a portfolio keeps the losing years small.
Four, this probably could be improved quite a bit. We could adjust the RSI to each instrument. We could add stops. We could add time exits.
Or we could even add Short trades.
Nonetheless, trying ridiculous, outside-the-box things is okay.
Never be afraid to do your own thinking.
Talk to you soon.
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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.