Nostalgia for infinity4 (Patreon)

Intro

Hi  there, and welcome to this blog series where I test a trading  algorithm that I found on the internet, like github, youtube or a  website or show you one of my own profitable trading strategys. I also  show you how these will perform under a controlled backtesting  environment so that you know what you can expect from it.

In this blogpost I am going to retest an updated version of the  Nostalgia for Infinity trading algorithm. And just like me the  developers of this strategy do not sit still and are always developing.   So let's find out how the Nostalgia for infinty X version 4 will  compare to its former version.

Dear Sefa thank you for tipping me off about this strategy!

This algorithmic strategy can be freely downloaded from Github from this location: https://github.com/iterativv/NostalgiaForInfinity

It is maintained by Iterativ and has gathered 58 contributors in the  mean time. You you can understand that a lot of time and effort has been  put into the development of this algo.

Installation and configuration

The  repository can be cloned to your own environment and the Readme  contains instructions on how to set up your system so that you can use  the code.

General reccomendations for usage are:

• A pairlist of 40 to 80 pairs
• 6 to 8 open trades at the same time
• And the usage of USDT or BUSD as stable coin

There are also some other consederations for the usage of specific or trades and you can read it all on the Github site.

Finally there is a donation section, so if you like their code, use  it and have some profits with it, then give donate of your earned wealth  to these addresses.

The strategy code (algorithm)

I  consider code like in the NFIX4 file, with all its different  parameters, buy signals, sell signals, remarks and exceptions a 'black  box algorithm'.

Without an extensive study on the code and all it's settings it is  unclear what exactly makes it profitable and where it's edge is. Since  there are also a lot of contributors, I assume that this knowledge is  also dispersed among these people.

In my previous on the NFIX strategy I gave an overview of the  sections and some of it's inner workings. But I will not do this in this  video but will only give you an impression of how it performs on my  setup.

Personally I like trading strategies that are reasonably simple and  effective so that I can quickly find out where it's weaknesses are so I  can mitigate them. But sometimes you find a strategy that is complex and  intriguing at the same time and get curious how it's performance is and  if it has potential to make you money from the market. Like this one.

So let's find out if this is the case

Backtest results

If you follow my  channel longer, you might already now I always test under the same  circumstances. Always the same 50 pairs, same backtest timerange and  over multiple timeframes. This way I can compare the performance of  different strategies with each other.

With this strategy it is not different. However, the only difference  here is that the strategy only works on the 5 minute timeframe, so I  could not test if this algo works better on other timeframes. And  therefore only the 5 minute timeframe results will be shown next.

So, the results of the backtest of this strategy are as follows:

As you can see, this strategy has 53% profits over a timerange of  around 5 years trading. The winrate is 99%, which is on itself truly  admirable. The algo's drawdown is only 14%.

But if you compare this results of the former NFIX algorithm (which I  the recently retested), then you can see that the newest version of  this algorithm has no improvement in its performance.

The older version which I saved had a much higher endbalance, profit  factor, pairs ratio and an even lower drawdown. The Calmar and Sharpe  ratio also have higher ratio's.

The new version does have a much higher winrate and Sortino ratio however.

Which ratio to use for your own decision making is totally subjective and up to you here.

A little bit earlier I said that I consider this a black box  algorithm and the way it's edge is formed is not entirely clear.  Nonetheless the developers did have taken the time to extensively  created exit signals with exit reasons. So in a way you can see which  exit reason provides the most profits or losses. However you still have  to find out what mechanism exactly lies behind "sell profit u bear 1_1",  "sell long t_0" or "sell profit t_5_x" if you get my point.

Nowadays I can also take the endresult of the strategy and make an  overview of the way it builds up its profits over time. Here I show you a  chart of the way the strategy builds up it profits or losses. If you  compare this weekly performance of the NFIX, then you can also see that  this version has profits from the start of 2020 and a nice profit curve.

But the NFIX version 4 did still suffer some big negative weekly  results in the beginning of 2020 and only began to have a positive  balance after 2021 started.

Comparing the NFIX version 4 with the other Top strategies in the  Strategy League I tested, you can clearly see it underperforms. Which  sounds a little bit strange since it is a profitable strategy and its  endbalance is still better than letting your money on the bank with its  low interest rates.  Maybe I should better say that there are opportunity costs here.

And also comparing the performance of this strategy with the top 10  algorithms in the strategy league, you clearly can see that it's  performance lags behind on some important metrics. The win percentage  and profit factor are the only factors that are of of the highest, but  high winrates do not necessarily guarantee profitable strategies.

So if I add up all the scores of all the different factors on which I  can base the endscore for my Strategy League, and I compare this with  the top 10 best strategies, then this score adds up to an endscore of  267 points. Then it ends up just outside top 10 best strategies at  position 13. Which is not too bad, but still worse then the earlier NFIX  version I tested.

Again my results are based on my setup and I deviate from the setup  that is advised on the NFIX github site. So it might not be truly  representative and does not show the algorithms true potential.

But as always I suggest that you also test on your own setup with  your own pairs and trading broker and find out if this strategy is the  right one for you.

This is it for now and I would like to thank you for reading this post.

All the results, strategy, graphs charts and more are downloadable from this post.

Many thanks to you that support me.

Please leave a comment if you have one . Or a specific strategy that you want to be checked by me.

And I will see you in the next post.

Goodbye.