Tesla (TSLA) Signals-Daily

The trading signals for Tesla (TSLA) were for their reward/risk, longevity and parameter sensitivity characteristics. Backtests don't always generate reliable signals which can be counted on moving forward but many traders find value in knowing what buy and sell signals would have worked well in the past.

Returns for the Tesla (TSLA) signals

For the 528 day (2.1 year) period from Aug 24 2016 to Sep 27 2018, these signals for Tesla (TSLA) traded both long and short would have yielded $104,289 in profits from a $10,000 initial investment, an annualized return of 220.5%. Traded long only (no short selling) the signals would have returned $33,530, an annualized return of 102.0%. 54.8% of time was spent holding stock long. The return would have been $3,606 (an annualized return of 15.9%) if you had bought and held the stock for the same period.

Signals and Trades

Not all signals are acted upon and signals are often reinforced in this type of strategy. If you are long in the security, buy signals are not acted on, for example. Similarly if you are short you must ignore sell signals. There were 194 buy signals and 205 sell signals for this particular TSLA strategy. These led to 77 round trip long trades of which 42 were profitable, and 77 short trades of which 34 were profitable. This is a daily strategy--daily OHLC data is used to derive all signals and there is at most one buy and sell signal and one trade per day.

Drawdown and Reward/Risk

Drawdown (the worst case loss for an single entry and exit into the strategy) was 16% for long-short and 16% for long only. This compares to 35% for buy-hold. The reward/risk for the trading long and short was 10.38 compared to 0.40 for buy-hold, a factor of 25.9 improvement. If traded long only, the reward/risk was 4.92. We use drawdown plus 5% as our risk metric, and annualized return as the reward metric.

The backtests assume a commission per trade of $7.