Analysis of the Panda Hedging.
Table of Contents
Introduction.
For this analysis I will take the 2 tutorials, I made for this purpose. There will also be additional criteria that I did not put on the tutorials, because they are not important.
Analysis Criterion and Strategy test analysis.
I would like to emphasise that it is your responsibility to purchase the product, you will have 7 days to withdraw and be reimbursed. Gains and losses are not the author’s responsibility, all the criteria to avoid a bad decision are present, it’s up to you to be careful.
As explained in my tutorial, I will start by preparing my backtest on the Metatrader 5 software by downloading the demo.
To do my tests, I will use these parameters and I will do 3 tests over periods that seem to come back often. The trading systems will be tested over the entire market period, from 2010 to today and from 2015 to today. These time units come back regularly and I think it is good to compare certain criteria over several periods to avoid that the trading system is optimised for one period.
Test results
A colour code for the following will make it possible to differentiate these 3 periods.
You can find the 3 graphs and their 3 backtest reports below.
Opening the image in a new tab will allow you to zoom in on the image and see all the analyses that will follow.
2006
Colour code : #000000
2010.01.01 to 2023.01.02
Colour code : #0514FB
2015.01.01 to 2023.01.02
Colour code : #8000F9
Analysis criterion
During the test the curves do not present a martingale or grid type strategy. However a trading account is required for hedging.
There is no Martingale, but there is a Grid system. Positions have no Stop Loss or Take Profit, they are virtual.
There are several possible settings to manage the size of the positions.
Strategy test analysis
I’m going to use the strategy analysis tutorial to analyse where the strategy fits in the outcome criteria.
Average Win / Loss
You just need to have a ratio between the average win divide the average losers.
This reflects the risk of each position, in general one wishes to gain more than one has risk.
0.79 = 10.77$ / 13.49$
0.79 = 9.73$ / 12.28$
0.80 = 5.33$ / 6.64$
Conclusion Average
For all the periods, the Risk Reward ratio is less than 1. This means that each position risks more than you can gain.
Profit Factor
Profit Factor = 1.24
A ratio between 1.25 and 1.75 represents a mark of minimum security, but will not be able to support the various expenses over the years and transactions (brokers’ commission, platform fees, taxes, bank commission, data expenses Steps…)
Profit Factor = 1.24
A ratio between 1.25 and 1.75 represents a mark of minimum security, but will not be able to support the various expenses over the years and transactions (brokers’ commission, platform fees, taxes, bank commission, data expenses Steps…)
Profit Factor = 1.23
A ratio between 1.25 and 1.75 represents a mark of minimum security, but will not be able to support the various expenses over the years and transactions (brokers’ commission, platform fees, taxes, bank commission, data expenses Steps…)
Conclusion Profit Factor
For all periode, the profit factor is low and is in the improved category, after that it is to compensate for the commissions and the swap, except that the objective is not played at the few cents asked for lots of 0.01 see which means that the system can survive despite a profit factor lower than 2.
Recovery Factor
Recovery factor = 14.14 is more than 10, you can consider this system stable and use it with a bigger capital.
Recovery Factor = 14.01 is more than 10, you can consider this system stable and use it with a bigger capital.
Recovery Factor = 7.84 is better to update it, since its stability is questionable.
Conclusion Recovery Factor
For the period of 2006 and 2010 the EA has an excellent Recovery Factor. For the period of 2015 the Recovery Factor is good, it can be improved.
Sharpe Ratio
Sharpe Ratio = 1.66 this can mean that the risk pays off and that the portfolio/strategy can show results. Good..
Sharpe Ratio = 1.79 this can mean that the risk pays off and that the portfolio/strategy can show results. Good.
Sharpe Ratio = 1.51 this can mean that the risk pays off and that the portfolio/strategy can show results. Good.
Conclusion Sharpe Ratio
For all periods the sharpe ratio shows good risk management.
Conclusion
The EA uses a Grid system.
The Profit Factor needs to be improved and the Risk Reward is less than 1.
The author has a live signal.
Come and discuss the strategy on the community discord.