The algorithm has calculated that the following was done by the Super Trend indicator signals during 111 days of trading 1 contract:
- 2,452 sell trades were executed and the total result of sells was USD 54,570 (USD 41,084 with consideration of fees);
- 2,453 buy trades were executed and the total result of buys was USD 60,200 (USD 46,708.5 with consideration of fees);
- the average result per trade was USD +230.
Both buys and sells bring profit. Why did the result improve? It is due to the fact that Renko charts process market data in a different way. The more pronounced a market trend, the more frequently candles appear in the Renko chart and more rarely new ‘bricks’ appear in a flat, which can reduce a number of false signals.
However, there are 2 nuances.
Look at August 8 (a ‘wide’ volatile day in the chart). It was the Flash Crash in the gold market. The price rushed down with acceleration, as a snowball, under conditions of low liquidity on Monday morning, when only the Asian markets had opened. It took place in the context of the negative US unemployment news, which was published on Friday. Trading robots and closing of longs by stop losses also added to that.
The algorithm calculated that day as if trades were immediately executed at those prices, which were topical at the moment of the ‘i+1’ candle opening. However, in actual practice, there would have been terrible slippages and if, in theory, this day shows a profitable performance, in reality the result could be negative.
It has to do with how ‘brick’ openings are built when the ‘bricks’ change their color. If a ‘brick’ in the Renko chart changes color, its opening is built on the previous candle closing and, since our algorithm calculates effectiveness by the opening prices (immediately after a signal has been received), it brings some uncertainty into the result.
How strong is this uncertainty? Judge by yourself.
If we add the algorithm to the Renko chart (12) for the Bitcoin market on the Bybit exchange (Scale = 25, since the price step on cryptocurrency exchanges is very small), we will get a suspiciously optimistic result: