Backtesting Popular Trading Strategies from Youtube #5
Bollinger Band + RSI Trading Strategy
👋 Hello and welcome to another issue of the “Backtesting Popular Youtube Strategies” series. 👋
For the newcomers, I have developed my own Backtester in Python, using the backtraderpackage and I use it to test popular and complex trading strategies from YouTube. That way you can receive real and transparent results and not some handpicked situations which support the presented idea.
If you are new you can check some of my previously backtested strategies:
Todays’ strategy
Our strategy for today is fairly simple. I took it from the YouTube channel TradingLab, you can check the video here.
The conditions for the signals are the following:
- For Long: The price should be below the lower Bolinger band and the RSI should be in the oversold area (below 30).
- For Short: The price should be above the upper Bolinger band and the RSI should be in the overbought area (above 70).
The period for the Bollinger Bands is 30 and the period for the RSI is 13.
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Backtesting
As per the video, I will test the strategy on the daily timeframe of Tesla(NASDAQ:TSLA). I download the daily Tesla prices for the last 3 years and run the backtest.
In the video, he is promoting the Mean-Reversion theory, so I set the exit condition to be only when the price crosses the middle band.
Let’s see the results.
The strategy was off to a good start. It initially did pretty well, but then it experienced a huge drop. Since then it was only downwards.
Well, that’s all from me for this one folks, we didn’t make money, but we learnt something!
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I would love to hear your thoughts in the comments.
Also if you have any suggestions or any ideas you want me to test, do share them, and I will do my best to cover them in an article!
Cheers, and see you at the next one!
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