Simple trading strategies - impossible?

[Hook N. Sinker]

Some people might prefer to buy low sell high. Let's see what happens:

FNM stock, 31.67 years daily price data, buy when price decreases 10 %, sell when price rallys 10 %, initial capital $ 100000, risk $ 10000 on each trade.

Number of trades 119
Total profit $ 350566
Greatest draw down is 0.4970 (49.70 %)
Cumulative Annual Growth Rate (CAGR) is 10.99 per cent.

I do not trade buy low sell high. I think it is too risky.

 

[taowave]

I dont think your examples a are a Buy Low sell high issue,it is more the way you are managing the trades.They are radically different,and in case 2 you have set a 10% profit target with no stops.

The second approach needs a stop,otherwise you are comparing apples to oranges.By that I mean it has open ended risk on the downside.

It looks to me the first system employ a 10% trailing stop coupled with a 10% hard stop??

Care to run the second system with a stop???

And lets run it on 100 stocks ore more.Perhaps the financials??

p.s. when you buy if price is up 10%,what are you referencing?A lowest low over x days??

Quote from Hook N. Sinker:

Some people might prefer to buy low sell high. Let's see what happens:

FNM stock, 31.67 years daily price data, buy when price decreases 10 %, sell when price rallys 10 %, initial capital $ 100000, risk $ 10000 on each trade.

Number of trades 119
Total profit $ 350566
Greatest draw down is 0.4970 (49.70 %)
Cumulative Annual Growth Rate (CAGR) is 10.99 per cent.

I do not trade buy low sell high. I think it is too risky.