Random Coin-Flip Entries with ATR-Based Exits

Summary

This example uses a random binary result to choose a long or short trade on a selected weekday. It sizes entries inversely to average true range and places a take-profit and stop level one ATR from the trade’s reference price, creating a nominal one-to-one reward-to-risk setup. The script also allows the user to select a test year and ATR period.

The author reports testing the idea on 28 major currency pairs across 2018, 2019, and 2020, with a win rate near one half and an eight percent standard deviation. The document presents this as a simple benchmark for comparing indicator strategies, not as a validated source of trading edge. It gives no detailed strategy report, transaction-cost assumptions, or explanation of how the reported dispersion is calculated. The code’s plotted arrows use day of month while trade conditions use day of week, so the visual markers may not match the strategy entries.

Key ideas

• Trade direction is selected randomly on a chosen weekday.
• Position quantity is scaled inversely to average true range.
• The strategy sets stop and target distances to one ATR for a nominal one-to-one ratio.
• The author reports results from testing 28 major currency pairs over three calendar years.
• The random-entry setup can serve as a baseline, while the reported results omit key testing details.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.