Free Forex Trend Following System

[Davidee]

Hello,

I've just started putting my Forex Systems up on the Internet. My site is for information and feedback only, nothing is for sale. Wondered what people think of this system, it's a long term trend following system. I tested it on the GBP/USD, EUR/USD, USD/JPY, USD/CHF and USD/CAD currencies pairs but had some great result on other currencies and random commodities like oil. Strange Currencies: A Free Mechanical Technical Trading System.

Any one wanna take a look and give me some comments/feed back. I don't mind hearing that my site and system(s) is/are crap if the criticism is constructive.

If I get a good response I'll post more systems.

Many thanks

 

[stevexyg]

Hi David,
A quality post for sure. This is good work, you have clearly set out your system, shown it back-tested on different pairs and given very clear breakdowns of results. The results themselves show this isn't crap you have here.

However one thing I'd raise is with the 120 day period there are only around 30 trades per decade? I can't see many traders willing to trade just 3times per year and potentially having a huge drawdown which may not be recouped for years.

With the 9 trades per year on a 30day period there is a lower return ratio which brings it too close to break-even. If this ratio could be brought closer to the 3:1 of the longer period with stop/loss or better exit strategy you would have a far more useable system.

Just my take on it, hope you get more feedback,
Steve

 

[Davidee]

Thanks Steve,

You would usually need a lot of money to trade a system like that and take lots of trades on different pairs and other markets. Oil seems to trade very well with it.

Still, I guess I could test it on hourly candles see what results that gives us?

 

[stevexyg]

Still, I guess I could test it on hourly candles see what results that gives us?

Yes that would be a great idea hopefully making this a more tradeable system for shorter term traders. Infact if it did work well with hourly candles perhaps it could work even down to 1M candles?! The really fantastic aspect of this sys is that as you said it keeps you out of a non-trending market and that is a huge starting advantage.

Steve

 

[drenpirk]

Please can you explain me :
"Close the long position if the price fails to close even higher in y number of days."

You look only on todays close or on closes for the whole period of y?

 

[Davidee]

Sure,

Let's take the system settings x=120, y=12 for example. You go long when the price closes higher than it has closed in 120 days and close the long position when it fail to make a new high for 12 consecutive days. If the trend remains in place, you should be getting a new high within 12 days.

Basically, a lack of continuing movement/momentum closes this trade rather than a reversal as is usually the case with these kind of systems.

 

[webline]

Link is not working or it is only me ?

 

[Davidee]

Here is the URL webline. www.myforexdot.org.uk/StrangeCurrenciesSystem.html Strange Currencies: A Free Mechanical Technical Trading System. I have few hours off this afternoon so I'm going to try a new system...

 

[drenpirk]

Sure,

Let's take the system settings x=120, y=12 for example. You go long when the price closes higher than it has closed in 120 days and close the long position when it fail to make a new high for 12 consecutive days. If the trend remains in place, you should be getting a new high within 12 days.

Basically, a lack of continuing movement/momentum closes this trade rather than a reversal as is usually the case with these kind of systems.

Thank you. So just for confirmation: I get in trade -> I wait 12 bars if there is a new high. This is right?
And after this first 12 bars? For example, if there is a new high on 8. bar after entry -> I wait till 20. bar for new high?

Thanks, David

 

[Davidee]

Yes, you understand it correctly.

And I believe the exit is the reason the number of winning trades is 50%+ when most trend following systems have a winning trade rate of around 40%. With this system you're exiting on lack of continuing movement rather than giving back some of your profits waiting for a 20 day low or whatever. Also, if there was a high on bar 8 and you didn't get a new high until say, bar 22, you'd exit on bar 20 then enter in again 2 days later.

If a trend is in place it usually doesn't take more than 12 days for a new high or low to be reached.

 

[drenpirk]

I just write it down to tradestation code like automate. If anyone interested, give here email.
I backtested it and now I need to make some optimalization on it. The best results are about 69 % winners and 3 trades a year.

 

[Davidee]

I just write it down to tradestation code like automate. If anyone interested, give here email.
I backtested it and now I need to make some optimalization on it. The best results are about 69 % winners and 3 trades a year.

I don't have trade station and just use MS Access SQL code which isn't as good as trade station for this sort of thing so I'd be very interested to hear your results, have you tested it on commodities by any chance. Oil I think it would work on well, and other things that trend well too.

 

[drenpirk]

results

Hi,
like I said its backtested. In the file you find results and my settings.

For results: Dont look at the annual return - it is calculated for 100000 USD your capital and 1 lot for trades. But as you know for 100000 USD you can buy bit more then 1 lot..

For settings: x_l and x_s are periods that I am checking for long and short trades after entry (if new high is reached in this period dont exit).

y_l and y_s are periods that I am checking after the first period (x_l and x_s) till the new high is not reached and position is closed.

The others are just settings for SL and PT. Not important, anyone can do this like he likes.

David

 

[Juanita99]

Here is the URL webline. Strange Currencies: A Free Mechanical Technical Trading System. Strange Currencies: A Free Mechanical Technical Trading System. I have few hours off this afternoon so I'm going to try a new system...

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[Davidee]

No probs, let me know how you get on with it please

 

[abbeyandriana]

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