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85-day-high/low strategy

Updated: Jun 5

Buying when price has gone up for a while can be hard, but it's actually a good idea. I stumbled by accident on a strategy where you go long on the DAX40 index whenever the index makes a new 85 day high and exits that trade whenever the index makes a new 85 day low.


So the conditions here are super simple.

  1. Enter a long trade when DAX40 makes a new 85 day high

  2. Exit that long trade when DAX40 makes a new 85 day low


By adding 85 day donchian channels to the chart you can see how such a strategy acts. It will go long when the trend is bullish and exit the trade when the trend is bearish, and catch the movement inbetween:

This is a trend following strategy with quite good results in the last 40 years of DAX40.


Detailed results (1982- until today)

  • 72.73% winrate

  • 15899 points gained

  • 2653 points max drawdown

  • 4.79 gain/loss-ratio



The ProRealTime™ code

defparam CUMULATEORDERS = false

upperBand = Highest[85]
lowerBand = Lowest[85]

IF Close = upperBand THEN
BUY 1 SHARES AT MARKET
ENDIF

IF Close = lowerBand THEN
SELL AT MARKET
ENDIF

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