The "simple forex system"

[fxfree]

I read about a system called the "simple forex system"
It is so simple but looks like it works really well.

You use a 1hr. 30mim,or a 15mim. chart.
You set your ema`s at 10,25,and 50.
very simply, when the 10 ema goes through the 25ema and continues through the 50ema you Buy/Sell in the direction the 10 is going (once it breaks through the 50 ema.)
You set a stop loss at 25 pips and a limit at 50 pips.(this way when you win you win twice as much as you lose when you lose) If over time it goes right just 50% of the time, you make money.
I was hoping someone could help me with something.
I don`t know how to use the programs that people use for backtesting .

I manually checked back for the maximum time my charting package would allow on 6 pairs and got quite good results.
(My 1hr only allows 30 days and my 15min allows 10 days.)
I was wondering if anyone has done a longer backtest on this simple system or could run one and let me know what the results are.
Really I know it sounds too simple but I was amazed at the results I got with my manual tes

 

[thepoliteone]

If you get MetaTrader and check out the forums for it, there's several pre-written 'Expert Advisors' available for it that have MA Crossover strategies - you could then tweak the values.

http://www.forex-tsd.com/ might be a good place to start.

TPO.

 

[fxfree]

thanks for the tip thepoliteone ,I will go there now...

 

[Jack o'Clubs]

You set your ema`s at 10,25,and 50.
very simply, when the 10 ema goes through the 25ema and continues through the 50ema you Buy/Sell in the direction the 10 is going (once it breaks through the 50 ema.)

Hi,

Can I ask what the point of the 25EMA is then - it seems you're just trading the 10/50 crossovers? Or does the 25EMA also have to break through?

Also, it intuitively seems to me that this would be more successful on a 1hr period than it would a 15min, since you're looking for reasonable sized moves.

 

[fxfree]

Hi,

Can I ask what the point of the 25EMA is then - it seems you're just trading the 10/50 crossovers? Or does the 25EMA also have to break through?

Also, it intuitively seems to me that this would be more successful on a 1hr period than it would a 15min, since you're looking for reasonable sized moves.

Your right I don`t know why the 25 ema is there.
When I back tested manually the 15 min chart made a lot more pips.

 

[rols]

I read about a system called the "simple forex system"
It is so simple but looks like it works really well.

You use a 1hr. 30mim,or a 15mim. chart.
You set your ema`s at 10,25,and 50.
very simply, when the 10 ema goes through the 25ema and continues through the 50ema you Buy/Sell in the direction the 10 is going (once it breaks through the 50 ema.)
You set a stop loss at 25 pips and a limit at 50 pips.(this way when you win you win twice as much as you lose when you lose) If over time it goes right just 50% of the time, you make money.
I was hoping someone could help me with something.
I don`t know how to use the programs that people use for backtesting .

I manually checked back for the maximum time my charting package would allow on 6 pairs and got quite good results.
(My 1hr only allows 30 days and my 15min allows 10 days.)
I was wondering if anyone has done a longer backtest on this simple system or could run one and let me know what the results are.
Really I know it sounds too simple but I was amazed at the results I got with my manual tes

There's the rub. It 'looks as if it works really well'. 30 days backtesting is the chocco teapot again - useless. There are guys out there and here I suspect (and myself to a certain extent) that have backtested tick data going back to the stone age!

I suggest it's not yet time to risk your hard earned sheckles on it in the FX jungle?

If only success was this simple. I'd knock it up in VB and watch the money come a-rollin' in.
Seriously. I thought moving average crossovers were good once until they didn't work!
Save yourself some time and money and park up at the Traderpedia for a few days.

All the best to you and your trading.....

 

[Charlton]

Keep it under your hat !!

I read about a system called the "simple forex system"
It is so simple but looks like it works really well.

You use a 1hr. 30mim,or a 15mim. chart.
You set your ema`s at 10,25,and 50.
very simply, when the 10 ema goes through the 25ema and continues through the 50ema you Buy/Sell in the direction the 10 is going (once it breaks through the 50 ema.)
You set a stop loss at 25 pips and a limit at 50 pips.(this way when you win you win twice as much as you lose when you lose) If over time it goes right just 50% of the time, you make money.
I was hoping someone could help me with something.
I don`t know how to use the programs that people use for backtesting .

I manually checked back for the maximum time my charting package would allow on 6 pairs and got quite good results.
(My 1hr only allows 30 days and my 15min allows 10 days.)
I was wondering if anyone has done a longer backtest on this simple system or could run one and let me know what the results are.
Really I know it sounds too simple but I was amazed at the results I got with my manual tes

fxfree
I wholeheartedly agree with Rols.

The indicator you describe is one of the most basic within technical analysis. You will probably find it on page 3 of the book (pages 1 and 2 being devoted to simple moving averages and weighted moving averages). EMA is not specific to forex, but can be applied to most instruments.

The reason it "appears" to work is because that is the intrinsic nature of averages. Before you use any indicator (and many on this site do not) you should fully understand how it is calculated, how it relates to underlying price and volume (if applicable ) and what it is telling you about the actions and intentions of the market makers.

The reason it appears to work then is that a shorter EMA (10 periods) reflects more accurately the current direction of the market, because it is looking at the last 10 periods, eliminating the effects of the earlier periods and adding a weighting factor to the most recent ones. When it shoots up/falls through longer period EMAs it indicates a change in the current trend compared to what is has been over 25 periods or 50 periods say.

However you need to understand its shortcomings:
- it is a lagging indicator, so it takes time to respond to the events that have already unfolded and it does not seek to make any predictions about the future
- it is a trending indicator so it does not work well at reversal points, sideways markets or noisy markets with whipsaws

Your calculations about stop losses, limits, % of correct results etc do not take into account spread and do not take into account the effect or a run of stop-losses being hit first, bearing in mind that trading on margin magnifies the effects.

Of course in truth it really is that easy, but we don't want anyone to find out, so please don't pass it on !!!!!!! :cheesy:

Charlton

 

[fxfree]

Thanks for the replies guys....Yes I know that moving averages by themselves would probably be too simple. I still wish I could test it with the 25pip -50pip thing over a longer period.Actually I have played around with other indicators like macd and rsi quite a bit but like most have not found anything that produces consistent results.
So I have a question.
This one is sidesteped all the time on these forums.
.Charlton and Rols you are senior members here on this board so you have been here for a while....
Do you have any system that gives you consistent results and do you make your living trading forex?
Please don`t take my question the wrong way I am only looking for affirmation that there is a way and it is possible. thanks

 

[nomibegood]

edited post