I backtested DeGRAM's Gold Ideas 77 Times

30 thg 7, 2021

Introduction
Break of structure is a popular trading strategy.
It is trade along the current direction of structure but cut loss or even reverse when break of structure.
@salehifx_trader and arashhabibpooor et. al. said they feel disappointed when they receive the trend reverse signal with huge loss.
It is possible the price may pull back or temporarily leave the bound of structure.
Therefore, blindly following the structure may be not profitable in some time.
In this case, I backtest DeGRAM 's Gold ideas from Apr13 to Jul28, 2021.
Jul29 is the day of closing all positions.
Note this day is the day Fed updated currency policy.

Test Method 1
If DeGRAM said long, close all short positions and open a new long position.
If DeGRAM said short, close all long positions and open a new short position.
Jul29 is the day of closing all positions.
There are 15 data, representing trading in 15 different time stamps of a day. The earliest one is 03:00 and the latest one is 17:00. The time zone is utc+3.

Test Method 2
If DeGRAM said long, close all short positions.
If DeGRAM said long and there are no long positions, open a long position.
If DeGRAM said short, close all long positions.
If DeGRAM said short and there are no short positions, open a short position.
Jul29 is the day of closing all positions.
There are 15 data, representing trading in 15 different time stamps of a day. The earliest one is 03:00 and the latest one is 17:00. The time zone is utc+3.

Result
I compute the numbers with opening price and did not include bid-ask spread, commission and overnight fee.
Method 1 :
03:00 -> -2907.47
04:00 -> -2850.79
05:00 -> -2974.58
06:00 -> -3025.25
07:00 -> -2964.79
08:00 -> -2992.37
09:00 -> -3106.63
10:00 -> -3103.31
11:00 -> -3145.71
12:00 -> -3300.93
13:00 -> -3301.49
14:00 -> -3212.76
15:00 -> -3377.93
16:00 -> -3832.02
17:00 -> -3760.32
average -> -3190.43
Method 2 :
03:00 -> -160.82
04:00 -> -152.48
05:00 -> -162.21
06:00 -> -171.85
07:00 -> -164.90
08:00 -> -163.99
09:00 -> -173.51
10:00 -> -150.52
11:00 -> -174.82
12:00 -> -174.53
13:00 -> -185.05
14:00 -> -180.83
15:00 -> -195.08
16:00 -> -269.06
17:00 -> -289.69
average -> -184.63

Conclusion and Suggestions
* Trading break of structure solely may be too late.
* Repeatly buy and sell in range can lead to more profit.
* We can improve gold trading by predicting the action of Fed.
* Gold is long term bullish unless governments want zero or negative inflation, so we can consider other instruments better than short gold.