Moving Average Based Intraday Options Strategy with 50% return and 6% draw-down

Last week I was thinking about an intraday options strategy that’s based on moving average of underlying stock. And as a fun experiment, I have done this using simple excel spreadsheet and extracted information from some online portals. Result of this effort seemed to be encouraging.

As per backtesting results, overall profits in the last 4 years has been around 4 lakhs which translates to 1 lakh per year. And if we consider our standard slippage and brokerages, it turns out to be 50,000/- to 60,000/- profit which is 50% to 60% profit approximately. And what I observed the best in this strategy is its drawdown, which is just around 6%. This is very impressive because if you trade with 1 Lakh capital, you will most likely lose not more than 6000/- at any given time and that gives us a lot of confidence to trade.

I recoded the entire analysis to share it with you, as always. Here’s the link if you are interested 🙂