About this template
This bot is based on Trading 5 Talents you tube video
(aug2,2023): https://www.youtube.com/watch?v=CkpnyKQrw_w using a simple long strategy on SPY.
For the back testing the main differences is I took his original parameters and did a binary search one variable at at time in the back tester.
His original parameters were:
45 DTE
40 delta
PT = 25%
Exit 20 DTE
After several iterations (2-3 hrs) I settled on:
90 DTE
60 delta
PT = 60%
Exit 10 DTE
for the back test to start with.
In the bot I changed the PT to 75% with 50/20% trailing. Either should work there are pluses and minuses to either setup I was just going for max profit overall with respect to the back test. The bot has trend checking so the bot would never achieve the back test. The reason for the trend checking is to avoid big losses/wipe outs.
Here are the two back tests: https://app.optionalpha.com/backtester/compare/U2496348169100500532170860,U2496348169100660503799062
If compared head to head the draw down and cap at risk are much higher in A(mine) but again I am relying on the bot to not enter when the trend is not in favor. Also I added in the Long PUT entry for the down trend. I also added a trend reversal monitor.
The goal of these extra bot automation is to have a more stable upward trend chart with much smaller draw downs. Since the 90DTE back-test averages 250% per year it is well worth sitting many entries out to avoid the bad trending times. For sure the profit will suffer but you will avoid wipe outs as per the video discussed. It is just setup as 1 contract per trade with 10k allocation up to 10 open positions. At 60 delta one position is in the 1500-2600$ range per position. In the back tester it was really detrimental to Profit if you go below 50 delta. If you have to go for smaller positions keep the 60 delta and go to the 45 DTE instead and that will lower it a bit but also lower the profit potential just not as bad as the delta does. This is all hypothetical of course. Always paper test first!!
V1 - watch the video to understand this bot better.