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sr2 · 07-12-2004, 06:33

Hi all

Hope you are having plenty of success in your trading.

I am a newbie to trading and would like to share my system with you and hopefully get lots of feedback. Basically I tested this on paper using Metatrader as I am not proficient enough to code Metatrader to back test automatically, so if anyone can help with that I would greatly appreciate it.

The system is very simple, which I think for a newbie is a good option. There are a few issues with the system such as drawdown and timescale as you will see, but having said that the profits can be quite good and you do not have to sit at the PC all day long.

The system is basically using 4 hour charts with 10ema and 40ema crossover with Parabolic SAR (0.02, 0.2).

1) Wait for fast MA to cross slow MA
2) Wait for PSAR to touch or crossover the slowMA from below for a buy or above for a sell (hope thats clear)
3) If the fast MA is less than 100pips (still experimenting with this) away from the slow MA you have a trade signal

(see attached image)

I use a stop loss of between 50 and 100 depending on the volatility of the currency pair. I start moving my trailing stop up as the profit goes over a 100. But like any kind of trading I use my own judgement too. The nice thing is you do not need to watch the trades all day long. You can just put them in and leave them if you like, using a stop loss of 50 and a take profit of 100-150 and check every 4 hours if there are any new trades.

Manual backtesting has produced the following results (from January 2004 up to and including July 2004). Unfortunately due to personal circumstances I was unable to continue testing and would ideally like to complete the study using Metatrader. Also as this was manual backtesting there maybe some errors:

GBPUSD
======
4 trades
4 winners
0 losers

Total pips: 1416

AUDUSD
======
7 traders
5 winners
2 losers

Total pips: 852

EURUSD
======
8 trades
6 winners
2 losers

Total pips: 674

USDJPY
======
10 trades
6 winners
4 losers

Total pips: 1145

USDCAD
======
10 trades
6 winners
4 losers

Total pips: 747

GBPCHF (needs more testing)
======
6 trades
3 winners
3 losers

Total pips: 3199

EURGBP
======
11 trades
2 winners
9 losers

Total pips: -224

Total trades: 56 trades
Total Winners: 32 winners
Total losers: 24 losers

Total pips: 7809

As you can see there are not that many trades in the year which I think is quite good as it means you can do other things instead of having to sit at the PC all day long. This is a longer term trading system.

Any comments, suggestions or queries are welcome.

Thanks for reading and apologies for the really long post.

ps. please note as I mentioned in a later post in this thread. The MAs are exponential MAs not weighted as stated above.

07-12-2004, 06:33	#1
sr2 level 3 Join Date: Jun 2004 Posts: 164 Downloads: 0 Uploads: 0 Rep Power: 0	Yet another newbie system! (YANS) Hi all Hope you are having plenty of success in your trading. I am a newbie to trading and would like to share my system with you and hopefully get lots of feedback. Basically I tested this on paper using Metatrader as I am not proficient enough to code Metatrader to back test automatically, so if anyone can help with that I would greatly appreciate it. The system is very simple, which I think for a newbie is a good option. There are a few issues with the system such as drawdown and timescale as you will see, but having said that the profits can be quite good and you do not have to sit at the PC all day long. The system is basically using 4 hour charts with 10ema and 40ema crossover with Parabolic SAR (0.02, 0.2). 1) Wait for fast MA to cross slow MA 2) Wait for PSAR to touch or crossover the slowMA from below for a buy or above for a sell (hope thats clear) 3) If the fast MA is less than 100pips (still experimenting with this) away from the slow MA you have a trade signal (see attached image) I use a stop loss of between 50 and 100 depending on the volatility of the currency pair. I start moving my trailing stop up as the profit goes over a 100. But like any kind of trading I use my own judgement too. The nice thing is you do not need to watch the trades all day long. You can just put them in and leave them if you like, using a stop loss of 50 and a take profit of 100-150 and check every 4 hours if there are any new trades. Manual backtesting has produced the following results (from January 2004 up to and including July 2004). Unfortunately due to personal circumstances I was unable to continue testing and would ideally like to complete the study using Metatrader. Also as this was manual backtesting there maybe some errors: GBPUSD ====== 4 trades 4 winners 0 losers Total pips: 1416 AUDUSD ====== 7 traders 5 winners 2 losers Total pips: 852 EURUSD ====== 8 trades 6 winners 2 losers Total pips: 674 USDJPY ====== 10 trades 6 winners 4 losers Total pips: 1145 USDCAD ====== 10 trades 6 winners 4 losers Total pips: 747 GBPCHF (needs more testing) ====== 6 trades 3 winners 3 losers Total pips: 3199 EURGBP ====== 11 trades 2 winners 9 losers Total pips: -224 Total trades: 56 trades Total Winners: 32 winners Total losers: 24 losers Total pips: 7809 As you can see there are not that many trades in the year which I think is quite good as it means you can do other things instead of having to sit at the PC all day long. This is a longer term trading system. Any comments, suggestions or queries are welcome. Thanks for reading and apologies for the really long post. ps. please note as I mentioned in a later post in this thread. The MAs are exponential MAs not weighted as stated above. Attached Thumbnails Last edited by sr2 : 14-04-2005 at 13:56.