85-day-high/low strategy

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