Hi, I'm working on a simple day trading method and wanted some advice as to whether it is worth pursuing further based on the back testing results so far?
I mostly swing trade stocks and commodities in the medium to long term, but nexusfi.com (formerly BMT) has inspired me to see if I can apply myself to some day trading as well. So I've been working on a simple rules based method to trade the S&P 500 Index that uses 60 minute bars, that only produces 2 to 3 trades a week on average, which is an ok pace for me as I work from home, and don't want to be staring at the charts constantly.
All trades are during the US trading session only, and have to be closed at the end of each day. So I don't have any overnight risk.
The initial sample size covers the last 5 months on the SPX, but I intend to go back a few years if anyone thinks it's worthwhile from the initial sample results.
Points Gain = 134.2
Fees = 20.4
Total Points Gain = 113.8
Median Gain per trade = 2.09
Average Gain per trade = 4.38
Below is the equity curve, which looks reasonable to me, but I'd like to smooth it out a bit and try to reduce the risk reward ratio a bit which is basically 1:1 at the moment to closer to 1:2, so that every winning trade covers 2 losing trades on average.
My entry point is 0.1 above the high of my signal bar, so I only enter if the next bar makes a new high and the stop loss position is the previous two bar low.
Is there any other basic metrics I need to consider or do I need to do sharpe ratio etc?
I'd really appreciate any feedback
Cheers
isatrader
Here's a screen shot of the individual trades so far.