Backtesting Trading Strategies – Forex & Currencies 28% in 7 Months
The following charts represent various back tests which use the signal data from the I Know First currency prediction table. Tests were made from July 1st 2014 to Feb 1st 2014.
Complete Data Set (Top 4 Signals – No leverage)
The below table represents a back test of all 23 currency pairs. The test buys or short sells the 4 strongest signals every day using US market opening and closing prices according to the moving average swing strategy. Using no leverage the return of this portfolio was 28.38%; the biggest gainer was the USD/RUB which alone had a return of 32.40%.
Complete Data Set (Top 1 Signal – No leverage)
This test is a bit more of a theoretical test. Here we simply invest all of the equity into the strogest signal on a daily basis. The data set is complete, meaning that all of the equity could be invested in a relatively dangerous exotic currency pair. The test is done in order to show the clear relationship between the I Know First signal and the market – and had a staggering 6 months return of 64%.
G10 Currencies Only (Top 4 Signals – No leverage)
This example represents a bit more of a realistic market trading. Because it trades only G10 currencies the costs (spreads) are much lower. When using just the G10 currencies the 7 months return goes down from 28.38% to 11.29%; however, with a relatively low leverage of 10, the return would have been 170% in 7 months – making it a strong investment strategy to any private or institutional investor.
G10 Currencies Only (Binary Options)
Although the algorithm was never designed for binary options trading, the very high currency hit ratio makes an interesting day trading option. The chart below represents how often the I Know First algorithm forecast the direction of movement correctly – regardless of how much the currency moved. As can be seen, from September 2014 to Feb 2015 the direction hit ratio was 64.72%.
|From July||From September|
*Most binary traders are profitable at around 56%.