Revive SR2 system, impressive and simple

[CajunJay]

A trader called SR2 has now disapeared from the forum, no doubt off to green pastures.

He showed us all his system just wondering if anyone is still intrested in continuing the process of testing etc.. I just how somebody can produce a expert to see historical results.

Below is the original post by SR2 himself





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.

[CajunJay]

can somebody please just add a reply just want to make sure this thread works.

Cant believe not one trader is slightly intrested

[khaldonm]

Hello
This look nice strategy with out many indicators

But there is no image attached to your post and i don't understand the touch of P....SAR


Thanks

[panco]

Looks good, must check it out further.

[CajunJay]

This is the link to the original thread all the information is in there.

Very promising system just wondering if anybody here can help with some back testing

http://www.moneytec.com/forums/f14/y...-system-12043/

[tradeigel]

Oh, yeah, just read the thread, sounds good... I know that strategy (one of the first I knew in FX - don't know where it came from though). However, I forgot about this strategy, thanks for reminding me. The results are pretty much awesome!

[CajunJay]

Tradeigel, have u ever tested the system?

[astro]

Don't wanna ruin your hopes, but the reason no one is interested in this system anymore is because like any other MA cross based system, it goes like this:
1. there has been a large trend for the last days.
2. all MA cross based systems result in nice profits.
3. threads regarding one or another systems are started everywhere on the web showing the great results.
4. many beginners are attracted like butterflies to the light and start to "fine tune"/"tweak"/backtest to suck as many pips as possible using the system, until:
5. THE TREND FADES! now the system starts to generate false signals and wipes out all the profits.
6. the beginners that once were attracted to this system will move to a "better" system (that works in ranging markets but will fail once the trend takes over...) causing the thread to disappear.

Just my two pips after observing these forums for over a year

Astro