Backtesting results for SAR, Swing and Positional trades

As I have been spending time these-days back-testing and scanning for setups. I would like to share some results which a SAR, Swing and positional trader might find useful :

1) Don't take the next 2-3 trades after the system gives a "big profit" trade.Implementing this idea will significantly increase your "average profit per trade".

2) Trade in stocks which are showing momentum like stocks with have given more than 80-100 percent return yearly or showing better relative performance or stocks at 52 week high. Opposite for short trades.

3) Trade a trend from only one particular direction i.e "buy only" or "short only". Preferably "buy only" in bull market and vice-versa.

If someone wants to make things more complicated or feels lazy about doing their own back testing, she/he can read Quantitative Strategies for Achieving Alpha, by Richard Tortoriello, the book is more oriented toward fundamentals than technicals of a stock :(

Good luck with your trading.

How to calculate Compound Annual Growth Rate - CAGR in Microsoft Excel?

What Does Compound Annual Growth Rate - CAGR Mean?

The CAGR is a smoothed rate of return because it calculates the growth of an investment as if it had grown at a constant rate on an annually compounded basis.

Investopedia explains Compound Annual Growth Rate

CAGR isn't the actual return in reality. It's an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.

CAGR is one of those terms best defined by example. Suppose you invested $10,000 in a portfolio on Jan 1, 2005. Let's say by Jan 1, 2006, your portfolio had grown to $13,000, then $14,000 by 2007, and finally ended up at $19,500 by 2008.
Your CAGR would be the ratio of your ending value to beginning value ($19,500 / $10,000 = 1.95) raised to the power of 1/3 (since 1/number of years = 1/3), then subtracting 1 from the resulting number:

1.95 raised to 1/3 power = 1.2493. (This could be written as 1.95^0.3333).
1.2493 - 1 = 0.2493
Another way of writing 0.2493 is 24.93%.

Thus, your CAGR for your three-year investment is equal to 24.93%, representing the smoothed annualized gain you earned over your investment time horizon.

Mathematically the CAGR formula is written as:

How to calculate Compound Annual Growth Rate - CAGR in Microsoft Excel?

In Microsoft Excel you can use the function of "Power" to calculate CAGR. I am uploading a Compound Annual Growth Rate - CAGR Calculator. You can download it free from here. You can edit the information  presented in the "grey cells" to calculate the rate of return on your investments.

Application of CAGR in finance.
1) To calculate the average returns of investment funds and money managers.
2) Comparing the historical returns of various financial instruments like stocks with precious metals or fixed income products.
3) Analyzing and forecasting the value of sales and costs to company based on the CAGR of past data.