Simple Strategy to trade Tesla

Sharpe Ratio of Strategy: 2.79

A simple strategy. The main components of the project are as follows:

Obtain daily stock price data for Tesla. Compute Stochastic RSI and Bollinger Bands indicators. Generate Long/Short signals with a holding period of 3 days based on the calculated indicators. Create visualizations to display the cumulative returns of the trading strategy.

List of Trades

The strategy formulation and the backtesting process involve the following criteria:

A LONG signal is generated if the Close Price exceeds the Upper Bollinger Band AND the Stoch RSI K line is higher than the Stoch RSI D line. A SHORT signal is generated if the Close Price falls below the Upper Bollinger Band AND the Stoch RSI K line is lower than the Stoch RSI D line. The holding period for each signal is 3 days.

• If the (Close Price > Upper Bollinger Band) AND (Stoch RSI K line > Stoch RSI D line) we get a LONG signal.

• If the (Close Price < Upper Bollinger Band) AND (Stoch RSI K line < Stoch RSI D line) we get a SHORT signal.