In this Guide we want to share the Swing Model Backtesting February 2025 Results during the beginning of the earning season in February 2025. We are looking at the week of 02/03/2025 to 02/07/2025. Companies like Google, Palantir, Amazon, Uber and more reported that week.
We go over the full backtest during our Live here below:
Backtesting Assumptions
The backtest has the following assumptions:
- Data was taken from MenthorQ Swing Trading Model as of Sunday 02/02/2025. The levels from Sunday are calculated after market close on the previous Friday 01/31/2025.
- We then took the Bias given by the model weather Bullish or Bearish and we downloaded the various levels: Upper Band, Lower Band and Risk Trigger.
- We then trade at the Open of Monday 02/03/2025.
- The entry price is at the open and the exit price uses the next Friday close 02/07/2025.
We then create different baskets and for all those baskets we apply two strategies:
Strategy 1: Long / Short Stock
- Long / Short Underlying Stock. We trade the Stock at the open of Monday 02/03/2025.
- Entry: Going Long if the Swing Bias was Bullish and Going Short if the Bias was Bearish.
- Exit: We close the trade at the close of Friday 02/07/2025
Strategy 2: Selling Credit Spreads
The second type of strategy leverages the Swing Trading Levels and Bias to define our Credit Spreads. These are the assumptions:
- If Bias is Bearish we sell a Call Credit Spread using the Upper Band as the level for our Sold Call
- If Bias is Bullish we sell a Put Credit Spread using the Lower Bans as the Level for our Sold Put
- We define our success rate shows if at the close of Friday the options expire worthless (Out of the Money)
Here you can find the File with the Data and Results.
Stock Basket 1. Full Coverage 865 Stocks
The first backtest is by looking at the full coverage and trading 865 stocks. Here we can see the following results:
- Strategy 1. Win Rate of 65.78% on our Long / Short Strategy and a weekly performance of 2.39%.
- Strategy 2. Out of 865 companies our win rate for the week is 92.49%.
Stock Basket 2. Companies reporting Earnings: 22 Stocks
The second backtest is by looking only at the major companies that reported earnings (22 companies). Here we can see the following results:
- Strategy 1. Win Rate of 63.64% on our Long / Short Strategy and a weekly performance of 5.41%.
- Strategy 2. Out of 22 companies our win rate for the week is 81.82%.
Stock Basket 3. Major Indices
The third backtest is by looking only at the major indices (5 assets). Here we can see the following results:
- Strategy 1. Win Rate of 40% on our Long / Short Strategy and a weekly performance of -0.57%.
- Strategy 2. Out of 5 assets our win rate for the week is 100%.
